Central Bank of Ireland Flood Protection Gap report

Many of these properties are unable to secure flood insurance, leaving them vulnerable to significant uninsured losses. This gap not only exposes property owners to financial hardship, but also raises the potential for increased pressure on the government to provide financial support in the event of flooding. Furthermore, the lack of adequate coverage could have broader implications for the financial system, potentially affecting credit availability and overall financial stability.

Key Insights

• Insurance Accessibility: Approximately 5% of buildings have limited access to flood insurance, leaving many vulnerable to significant uninsured losses.
• Rising Costs: The annual cost of inland flooding is estimated at €101 million, with much higher losses expected during extreme events.
• Climate Change Impact: Climate change is expected to increase the frequency and severity of flooding, further escalating costs for both individuals and the state.
• Concentration of Risk: The flood protection gap is most pronounced in five counties: Dublin, Cork, Kildare, Clare, and Louth.
• Need for Collaboration: Effective flood risk management will require a coordinated effort between the government, insurers, and other stakeholders.

The report highlights that approximately 1 in 20 buildings in Ireland struggles to obtain flood insurance, leaving a substantial number of homeowners and businesses at risk. Annual inland flooding costs are estimated at €101 million, with the potential for much higher losses during severe flooding events. This analysis underscores the pressing need to address the flood protection gap, which could have significant economic and societal impacts.

While Ireland has so far managed flood risks through physical defences, insurance, and state financial support, the long-term viability of these strategies is uncertain. The Report highlights the growing concern that climate change will exacerbate flooding risks, leading to higher costs for both the state and individuals. As the Governor of the CBI recently remarked, “significant progress has already been made, but the clock is ticking, and the window of opportunity to take preventative action may be closing faster than we realise.” The report highlights the need for enhanced cooperation between key stakeholders, including the government, the insurance industry, and the financial sector, to effectively address the evolving flood risk challenges.

Without significant investment in flood resilience, Ireland's current strategies may not withstand the increasing risks posed by climate change. Proactive measures are essential to protect households and businesses from uninsured losses, safeguard economic stability, and ensure that Ireland is better prepared for future flooding events.