All big local insurers pull grid failure cover as 'unprecedented' load shedding spooks reinsurers

Almost all South Africa's big short-term insurers have pulled, or plan to remove, grid failure cover from their policies this year.

This comes as the "unprecedented levels of load shedding" in the country have prompted global reinsurers to pressure local insurers to reduce their exposure to business interruption claims arising from the failure of public utilities and public telecommunications, says Santam.

It began with Old Mutual Insure last year. The insurer told News24 that it introduced a "grid failure exclusion" in July 2022 to new policyholders, and from 1 November 2022 when existing customers renewed their contracts.