On Wednesday, 21 August, parts of Gauteng experienced a nine-hour power outage due to planned maintenance by Eskom. The maintenance was conducted on the distribution network, resulting in electricity supply disruption in Soweto. Customers in Mapetla, Molap, Moroka, and Rockville were affected by the outage. This is not the first time residents in Gauteng have experienced planned electricity interruptions, and it certainly won’t be the last.

According to Eskom, the interruption of electricity was necessary to perform essential maintenance on their distribution power lines. While this may be true, it highlights the importance of being prepared for power outages and the negative consequences they can have on individuals and businesses.

Power outages can result in significant financial losses for businesses, especially those that rely heavily on electricity to operate. For example, a restaurant that experiences a power outage may have to throw away all the food in their fridge and freezer, resulting in a loss of revenue. Similarly, a manufacturing plant that experiences a power outage may have to shut down production, resulting in a loss of income and potential damage to equipment.

Individuals are also affected by power outages, especially those who rely on electricity for medical equipment or have young children or elderly family members who require electricity for heating or cooling. Power outages can also result in food spoilage, property damage, and inconvenience.

So, what can be done to mitigate the negative consequences of power outages? One solution is parametric insurance. Parametric insurance is a type of insurance that pays out when a specific event occurs, such as a power outage. Unlike traditional insurance, which requires proof of loss, parametric insurance pays out automatically when a pre-defined trigger event occurs.

For example, a business could purchase parametric insurance that pays out when there is a power outage lasting longer than a certain amount of time. The payout could be used to cover the costs of lost revenue, spoiled food, and other expenses related to the power outage.

At Riskwolf, we specialize in helping insurers build and operate parametric insurance at scale. Using unique real-time data and dynamic risk modeling, we enable insurers to turn real-time data into insurance. Our parametric insurance solutions are simple, reliable, and fast, providing peace of mind to individuals and businesses alike.

In conclusion, power outages are a reality that individuals and businesses must prepare for. While traditional insurance may provide some coverage, parametric insurance is a more effective solution for mitigating the negative consequences of power outages. With Riskwolf, insurance executives can develop parametric insurance solutions that provide peace of mind to their customers. Contact us today to learn more about how we can help you turn real-time data into insurance.

Source: The South African