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Aging overhead power and telecom lines raise billion-dollar liability risks

Allianz Commercial cited cases including a Texas wildfire that caused more than $1 billion in damage and a New Zealand tower collapse that left about 88,000 connections without power for up to three days.

Reported · Written up by our desk · Property Insurance

Overhead power and telecommunications lines can fail with consequences that exceed the value of the assets themselves, Allianz Commercial said, highlighting growing liability and business interruption exposure tied to aging infrastructure.

In Texas, Allianz Commercial pointed to the February 2024 Smokehouse Creek Fire, which began when a decayed utility pole broke and power lines fell onto dry grass. The blaze became the largest wildfire in the state’s history, burning more than a million acres and causing over $1 billion in damage.

The insurer also cited other stressors such as theft and vandalism. In South Africa, targeting pylons, transformers and substations cost the national utility more than 221 million rand, about $12 million, in the 11 months to February 2025, Allianz Commercial said.

Allianz Commercial added that climate pressures are increasing infrastructure strain, with equipment facing heavier snow loads, higher summer temperatures and winds concentrated into short, violent episodes. It noted a New Zealand transmission tower collapse on June 20, 2024, after a maintenance error, where the grid operator Transpower faced regulatory criticism and paid NZ$1 million into a resilience fund, while the regional economic impact was estimated at NZ$37.5 million to NZ$80 million, with power cut to about 88,000 connections, roughly 180,000 residents and 20,000 businesses for up to three days.

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