'Radical shift’ in data sharing needed for sustainable flood insurance in Ireland
The key to sustainable flood insurance is improved data sharing between Government, insurers and other sectors that hold data about flood risks, suggests a new report by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science in collaboration with the Environmental Research Institute at University College Cork. The research is funded by Ireland’s Environmental Protection Agency (EPA) Research Programme 2014-2020.
The analysis by Swenja Surminski, Senior Research Fellow at the Grantham Research Institute, concludes that better data sharing may help to address problems of unaffordable or unavailable flood insurance, which are currently experienced by some homeowners and businesses in Ireland. But the report warns against “short-term, stop-gap efforts” to prop up the existing insurance system, likening such attempts to treating the symptom without treating the cause – increasing flood risk. Only a “significant increase in efforts to address the underlying risks and to minimise future risks” will secure affordable, available and sustainable insurance for the future.
The report ‘Fit for the future? The reform of flood insurance in Ireland: resolving the data controversy and supporting climate change adaptation’ points out that the current discussions about the Flood Insurance Bill and the upcoming consultation about the National Adaptation Framework, expected in June 2017, provide a chance to propose a “radical shift” away from the current approach to flood risk data, and towards greater transparency about flood risk for Government, insurers, businesses, homeowners and other sectors that make decisions affecting future flood resilience.
The report calls for Ireland’s Government, insurers, utility companies, banks, property developers, and all other sectors that own data on flood risks, to collaborate on the creation of a publicly available platform where data can be shared and accessed. In addition to information on insurance protection in areas at risk and Government research data, other sectors can provide valuable information on flood risk, for example on the extent of protection measures for properties, and maintenance levels of drainage systems.
The proposed data hub could encourage insurers to set fair and transparent premiums which recognise risk reduction measures. It could also be used by Government to provide short-term relief to support homeowners and businesses currently struggling to secure affordable insurance, and to target flood protection measures at areas which are at most risk. The data-sharing platform should also be used by other sectors when making decisions, for example in planning where and how to build new properties or infrastructure to increase future resilience to flooding and address underlying flood risks.
The report suggests that Ireland could become a “front-runner” by committing to a broad data platform involving other sectors. Though data-sharing platforms between Government and private sector exist in other countries, none have yet included data owned by other sectors.
The Irish Government’s Office of Public Works is considering the development of a data portal for flood information and the Department of Finance recently suggested that greater data sharing is important for the future of flood insurance.
The current approach of insurers using data on flood risks is not transparent. The sector has been “accused of treating certain areas of the country that include insurable properties as uninsurable through its use of a ‘geocoding’ approach”, according to the report. Geocoding assigns the same flood risk to all properties within large areas and allegedly does not recognise recent advances in flood protection. This results in some homeowners and businesses paying premiums which reflect a higher risk than they are exposed to, or being unable to obtain flood insurance at all. “Insurers have responded by arguing that lack of investment and ineffective planning restrictions mean that exclusions are necessary to reflect rising risk levels and to maintain flood insurance provision at affordable rates for those at lower risk,” states the report. The report published today highlights the need for a new approach to data sharing.
The report states: “It is becoming increasingly clear, in Ireland and elsewhere, that flood insurance is not fit for the future as risk levels change.” It continues: “There is a danger that discussions about flood insurance turn to short-term, stop-gap efforts, rather than moving towards a more sustainable flood insurance approach. This has been seen with the UK’s Flood Re, which fails to incentivise homeowners and government to reduce risk.”
The report concludes: “It is therefore essential to outline the advantages that such a data platform could bring to different stakeholders, including those currently struggling to obtain flood insurance, local authorities, investors, insurers and those tasked with managing current and future flood risk. At the very least, this data platform would remove any excuses of not taking action due to a lack of data. Hiding behind controversies about data or claiming ignorance of the risks may appear attractive at the moment, but it is not a sustainable strategy for any stakeholder.”
Dr Swenja Surminski will be speaking at a public seminar at University College Cork on Tuesday 9 May. To register to attend or to arrange an interview with Dr Surminski please contact Victoria Druce on +44 (0) 20 7107 5865 or email@example.com
NOTES FOR EDITORS
- Dr Swenja Surminski will be giving a public seminar at University College Cork on Tuesday 9 May. This is a free event open to the public organized by UCC Climate Lab at the Environmental Research Institute, University College Cork. Journalists are invited to attend, please register attendance with Victoria Druce, on +44 (0) 20 7107 5865 or firstname.lastname@example.org
- This paper is part of the Costing climate change impacts and adaptation in Ireland project (https://www.lse.ac.uk/granthaminstitute/research/costing-climate-change-impacts-and-adaptation-in-ireland/ ).
University College Cork (UCC) and the Grantham Research Institute at the London School of Economics and Political Science (LSE) have been commissioned by Ireland’s Environmental Protection Agency (EPA) to develop a framework for costing the impact of flood risk on the Irish economy and assessing the options for managing it, with a specific focus on local businesses and the insurance industry. The framework will assist the EPA to prioritise adaptation measures. It will identify costs for specific sectors and assist with the identification of financing sources for flood risk management i.e. the share of public, private and mixed funding. There will be a particular focus on the role (current and future) of the insurance industry.
- The EPA’s current Research Programme 2014–2020 is built around three pillars -Sustainability, Climate and Water. More information about the EPA Research Programme can be found by visiting the EPA Website where you can sign up for the quarterly Research Newsletter. This provides news and updates about research calls, events and publications that are of relevance to researchers and other interested parties. You can also follow EPA Research on Twitter @eparesearchnews for the very latest information and developments about the Research Programme and its projects.
- The Grantham Research Institute on Climate Change and the Environment (https://www.lse.ac.uk/grantham) was launched at the London School of Economics and Political Science in October 2008. It is funded by The Grantham Foundation for the Protection of the Environment (https://www.granthamfoundation.org/).
- The Environmental Research Institute (https://eri.ucc.ie) at University College Cork is an internationally recognised Institute for environmental, marine and energy research dedicated to the understanding and protection of our natural environment and to developing innovative technologies, tools and services to facilitate a transformation to a low carbon and resource efficient society. The Institute brings together over 300 environmental researchers from across science, engineering, business and humanities to address complex environmental challenges in a multi-disciplinary approach.