Ageing infrastructure

Collapsing bridges, leaking pipes and bumpy roads: infrastructure in the western industrialised countries is certainly not getting any younger. A new series in Schadenspiegel offers an insight into the principal loss scenarios. Topics Online presents the main points from the article.


Many factors have contributed to the woeful state of today's infrastructure throughout the world. The mobility of goods and people is increasing. Roads and bridges are collapsing under the weight of more and more heavy vehicles. Our demand for energy and water is rising and placing an enormous strain on supply facilities. Grand achievements from the age of industrialisation such as water supply and sewage systems in major cities are starting to show their age. The same is also true of urban transport systems, which can no longer cope with today’s requirements. The problem is compounded by the growing number of natural catastrophes, which place a further burden on our infrastructure. In reality, all these problems could be solved. However, there is frequently not enough money available to do so or governments prefer to invest in projects that are popular with the voters. As the Americans rightly put it, infrastructure is not sexy.

Problems are everywhere

Western Europe fares best when it comes to infrastructure, where it is still relatively intact. This is primarily because the region has been densely populated for so long, population levels have remained fairly constant and state finances are still relatively healthy. But even here, roads, railways and airports are feeling the strain. Electricity networks frequently cannot cope with today's demands.

Things look a good deal worse in the USA with overtaxed roads and bridges, inadequate local public transport systems and problems with the water supply. For example, leaking pipes constantly allow large quantities of clean drinking water to trickle away unused, while effluent flows into the environment unfiltered.

The situation in newly industrialised and developing countries is even more dramatic. Eastern Europe is struggling to replace its old infrastructure, especially in rural regions. In India and China, it is above all the water supply that cannot keep pace with the booming population and continuing spread of industrialisation. The ailing infrastructure there not only jeopardises the economy, but is also threatening public health.

Impact on the insurance industry

Ageing infrastructure hits the insurance industry first and foremost in the property sector: fire, water and storm losses are becoming more frequent and have more serious consequences as buildings collapse, leading to business interruptions. However, liability scenarios can also ensue. When ageing buildings, pipes and cables result in third-party losses, it is often found that the loss has not only been caused by wear and tear, but also that some of the parties responsible have neglected their duties, either through faulty construction, defects in the products used, poor maintenance, failure to give employees proper instructions or non-compliance with safety regulations. Errors during rescue and salvage operations can also give rise to liability on the part of those involved.