The Silent Exposure Behind Overhead Power And Telecom Lines

Overhead power and telecommunications lines crisscross the globe largely unnoticed until they fail, and when they do, the fallout can dwarf the value of the asset itself, according to an article by Allianz Commercial.

The insurer points to the February 2024 Smokehouse Creek Fire in the Texas Panhandle, sparked when a decayed utility pole broke and dropped power lines onto dry grass, as an example of the stakes involved. The blaze became the largest wildfire in state history, burning more than a million acres and causing over a billion dollars in damage.

In South Africa, theft and vandalism targeting pylons, transformers and substations cost the national utility more than 221 million rand ($12 million) in the 11 months to February 2025, Allianz Commercial said.

Oliver Lauxmann, global practice group leader in Allianz Commercial’s chief underwriting office for liability, calls this infrastructure blind spot “silent exposure.”

“Poles are invisible until the moment they fail,” Lauxmann said. “But this is not niche exposure. These lines cross geographies, industries and ownership structures, so a single failure rarely stays local.”

Three Ways Infrastructure Fails

Poles and lines fail in one of three ways, according to Allianz Commercial:

• Material degradation: Wood decay is among the most persistent problems, as chemical preservatives break down over time and moisture trapped at or below ground level promotes fungal decay that can hollow out a pole while it still looks sound above ground.
• Shifting or excessive loads: Shared attachments compound the problem. Where utilities lease pole space to telecoms and cable operators, common in Asia Pacific, the UK and the U.S., each new attachment adds weight, and every bolt or bracket breaches the preservative treatment, exposing untreated wood to decay.
• Deliberate damage: In March 2024, arsonists set fire to a high-voltage pylon near Grünheide, outside Berlin, cutting power to surrounding villages and halting production at Tesla’s Gigafactory for more than a week; a left-wing extremist group claimed responsibility. Lauxmann said such attacks demonstrate how damage to one part of a grid can ripple across a wider network of connected infrastructure.

Weather is another source of strain. José Luis Pallarés, senior risk consultant for liability at Allianz Commercial, said infrastructure must now cope with heavier snow loads, higher summer temperatures and winds concentrated into short, violent episodes. “Infrastructure designed for the climate of 30 years ago is now being asked to perform in conditions it was never built for,” Pallarés said.

Downstream Damage

When infrastructure fails, the costs often land hardest on parties that never owned or maintained it, the article said. After a transmission tower collapsed in New Zealand on June 20, 2024, following a maintenance error in which a contractor’s crew removed too many nuts securing its legs, grid operator Transpower faced regulatory criticism and paid into a NZ$1 million resilience ($590,000) fund.

But those costs were dwarfed by the estimated NZ$37.5 million to NZ$80 million ($21 million to $45 million) economic hit to the region, where the collapse cut power to about 88,000 connections, roughly 180,000 residents and 20,000 businesses, for up to three days. None of the affected businesses owned or maintained the tower, and they are now pursuing a class action to recover losses, according to Allianz Commercial.

Allianz Commercial said managing these risks is made more challenging when asset data on location, ownership, age, material and inspection history is often scattered across departments, systems and companies, particularly where ownership has changed hands over time. “You cannot manage a risk you cannot locate,” Pallarés said.

Read the full article here. &