South Africa’s Infrastructure Crisis Is Rewriting the Underwriting Rulebook

A New Category of Risk Demands a New Category of Response

In February 2025, Eskom implemented Stage 6 load shedding without warning after multiple failures at the Majuba and Camden power stations. Although rolling blackouts in 2025 have been less frequent than the 2022–2023 peak, the underlying risk has not disappeared – it has mutated. Load shedding is no longer the only infrastructure threat. Gauteng’s water crisis has seen supply cuts lasting up to 86 hours. Municipal roads, stormwater drains, and fire hydrants are failing across multiple provinces.

The Claims Evidence

Santam, South Africa’s largest short-term insurer, reported a 60 per cent increase in power-surge claims in the first half of 2022 alone, with total surge-related claims reaching R609 million that year. Reinsurance costs have risen by up to 30 per cent, and those costs are being passed on to policyholders.

Why Traditional Underwriting Models Are Failing

Traditional property underwriting assumes a baseline level of functioning public infrastructure – reliable electricity, pressurised water, maintained roads, responsive emergency services. When that baseline collapses, every risk assumption shifts.

Four Practical Recommendations

First, unbundle infrastructure risk with explicit infrastructure-resilience endorsements. Second, develop parametric load-shedding products. Third, mandate infrastructure risk assessments in commercial surveys. Fourth, lobby for a public-private infrastructure risk pool.

Infrastructure failure is not a temporary inconvenience. It is a structural shift in the South African risk landscape, and the insurance industry’s response must be equally structural.