Kenny a Canute figure on flood premiums
Meeting insurers will change nothing for homeowners denied flood cover
Kevin Thompson, chief executive of Insurance Ireland, leaving Government Buildings following a meeting with Taoiseach Enda Kenny, Tánaiste Joan Burton and various Ministers. Photograph: Eric Luke
When it comes to holding important-sounding meetings with the financial services sector when it lets consumers down, this Government has rarely been found wanting.
But when it comes to bringing companies to heel and getting results its track record is a whole lot less impressive.
So it has proved again. Executives from five insurance companies – Aviva, AIG, FBD, Allianz and RSA – trooped into Government Buildings yesterday to meet Taoiseach Enda Kenny, Tánaiste Joan Burton and a phalanx of their Ministers. The meeting was called to discuss the flooding catastrophe which has played havoc with the lives of thousands of people living close to – or on – flood plains and the problems many thousands more have getting flood insurance.
Just short of farcical
Sure enough, the bold children of the insurance industry have promised to think about what they have done. But will they do anything different in the future? No. And can the Taoiseach make them do anything differently? No.
Put simply, the State cannot interfere in the workings of the insurance sector just as it could not interfere in the banking sector when the financial institutions refused to budge on the lowering of standard variable-rate mortgages for hundreds of thousands of beleaguered homeowners after the lenders were called into Government Buildings for “meetings” with Kenny.
Neither the Ministers in attendance nor the insurance executives will be overly concerned at the outcome. After all, the purpose of the meeting was less about doing anything effective than it was about being seen to do something. With an election just weeks away Kenny, Burton and their handlers are acutely aware they are vulnerable to charges of fiddling while Ireland flooded.
The reality is little can be done to repair the damage done in recent weeks to homes along the Shannon or in Gort, Enniscorthy or Bandon. And little can be done to make sure the damage is not repeated, at least in the short term.
But that reality does not suit the purposes of the Government. So it has created the false impression that it is taking on the insurance companies.
As well as urging chief executives to reflect on the cover being offered to households in flood-affected areas, Kenny also asked for the industry view on non-permanent defences, which are the only engineering solution possible in some towns. And he has given them until the end of next week to get back to him.
But in a statement after the meeting, Insurance Ireland made it clear nothing had changed. It said an “unfortunate economic reality is that it is commercially untenable and unsustainable for insurers to provide flood cover in areas of repeated flooding. To do this would undermine the ability of insurers to fulfil their obligations to meet the claims of other policyholders in future and also to meet increasingly strict capital requirements imposed by regulators.”
That is their bottom line. All the meetings in the world will not change that fact.