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Insurance Trio Attack Flood Response

By Eoin English of the Irish Examiner - 01/08/12

Three former insurance insiders have launched a scathing attack on the industry over its treatment of flood victims.

The men, who run Owens McCarthy Ltd, Ireland's largest independent firm of loss assessors, described the country's insurance industry as "dysfunctional".

They claimed:

* The approach of certain companies to the management of claims in certain flood-stricken areas has left people "in the lurch and in fear", and is driving people towards the black economy;

* Insurance companies have "let their customers down" by not admitting liability quickly;

* Ethics have taken second place as more and more insurance companies put profits first;

* And some loss adjusters working for insurance companies are "being made drive a 'horse and cart' through the spirit of the Consumer Protection Code".

They said the Government must give more resources to the Financial Services Ombudsman to restore the balance in favour of the consumer.

"The insurance industry has hit a new low in its treatment of the victims of the latest flooding in Cork," said Owens McCarthy Ltd's business development director, Eamonn R Downey.

Mr Downey was backed by John O'Donoghue, Owens McCarthy Ltd's managing director, and Seamus O'Leary, the claims director.

They all worked as loss adjusters for insurance companies before joining Owens McCarthy Ltd.

They are now hired by householders and businesses to independently assess property damage and to handle their claims.

The firm is dealing with an estimated 30% of all claims arising out of the devastating flash floods which struck Blackpool, Ballyvolane, Glanmire, Douglas, and Clonakilty on Jun 28, which caused an estimated E90m worth of damage.

Mr Downey said that, from their experience of representing flood victims over the last month, they found that the insurance industry has created a culture where people are afraid to make a claim.

"And if you do, the companies' attitude is "we're going to make it as hard as we can to get paid". Vulnerable people are at the most disadvantage," he said.

Mr O'Donoghue also said insurance companies have inadequate complaints procedures. "They are using the ombudsman as a clearing house for complaints," he claimed.

"It can take 12 to 18 months to get a decision when the worst that can happen is they are told to pay out what they should have paid anyway".

The trio said the policing of the industry, which is the responsibility of the Central Bank, is improving, but is not yet where it should be.

However, a spokesman for the Insurance Industry Federation, Michael Horan, accused the trio of "mud-slinging".

"They are pushing their own agenda", he said. "Their criticisms are general. There are no specifics.

"Insurance companies are working hard to settle claims as quickly as possible, and they routinely make interim payments to tide people over".

Mr Horan said the federation provides a free insurance advice service to the public on 01 6761914.

Fine Gael TD Jerry Buttimer, who has accused some companies of "dragging their heels" in relation to claims payments, said the Oireachtas finance committee must hold the industry to account.

"There must be accountability and transparency. I want people who've paid insurance premiums to be treated properly and fairly".