The Irish Insurance Federation (IIF) has called on the Government to set up a national flood defence agency to help prevent high levels of damage to homes and ease the growth in property insurance claims

Mr Michael Kemp, IIF chief executive, said the insurance industry could not afford to deal with the financial consequences of floods if regular flood damage became inevitable in certain areas.

"The Government should now be looking at preventing property damage in high-risk areas," Mr Kemp said. "A national agency could spearhead a review of river and coastal defences in order to invest in practical improvements in flood blackspots."

A spokesman for the IIF said that, if flood damage changed from being a risk to an inevitability, it would no longer be commercially tenable to provide home insurance in flood-prone areas.

The onus is on local authority planners to zone responsibly and not designate flood-prone land for construction, according to the IIF.

Mr Kemp said property insurers had to deal with the financial consequences of extraordinary bad weather events in the Republic every year over the past five years. Last winter, two bouts of extreme weather were "ferocious in their intensity" from a property owner's point of view, he said.

A freeze on New Year's Eve led to 4,495 burst pipes and property insurance claims costing €30 million, while floods in February resulted in more than 2,900 claims costing the industry €37 million.

In 1997 a storm led to €84 worth of claims and Hurricane Charlie in August 1986 led to claims in the region of €47 million.