Report looks at the root causes of power supply outages since 2001
- Published: Thursday, 06 October 2016 08:37
Marsh has issued a report which analyses insurance claims from power generation companies and identifies the root causes of power outages since 2001.
The report, ‘Global Loss Trends: Analysing the Causes of Power Generation Claims’ analyses Marsh and AIG’s claims data and provides a breakdown of the causes behind of some of largest and most complex post-millennium losses sustained by the global power industry.
Key findings from the report include:
- There has been little change in the frequency of losses and number of claims made by the global power sector since 2001, however these losses and their associated claims values have risen from the largest claim being US$13 million in 2001, to US$233 million in 2014.
- The majority of the 50 largest losses sustained between 2001-2014 are attributable to: machinery breakdown (36 percent), human error (31 percent), weather-related incidents (17 percent), and ageing infrastructure (5 percent).
- Cyber risk, including data breach and hacking, skills shortage and an ageing workforce, and an increase in demand for spare parts are most likely to have the potential for future harm or loss to the sector.
- By developing their understanding of their risk quality, power organizations have the opportunity to better identify and manage future risks, potentially preventing and mitigating future accidents and incidents.