No Water Increases Basic Property Risks

When I read the newspaper or hear a news report on a news channel, I always consider it through my prism of interest – be it geopolitical, global economic, or risk analysis.

An example is the following article which was recently reported by BBC. The lack of water supplies in countries like Mexico is not unusual. In fact, when analyzing the risk to property in Mexico, regardless of its location, oftentimes I am told that a property has a sprinkler system to protect against fire. Unfortunately, when further analysis is done, you discover that there is no reliable water sources, therefore the sprinkler system pipes are filled only with air.

The article concerns me because it points to an increase risk to a basic peril of fire in insurance policies, and risk analysts should be mindful of this increase of exposure.

Water cut off in Mexican capital

Mexico City officials have shut down a main pipeline providing fresh water to millions of residents because reserves have fallen to record low levels.

The closure, due to last 36 hours, will affect five million people, or a quarter of the city's population.

Unusually low rainfall last year and major leakage are blamed for leaving reservoirs less than half full.

Hundreds of water trucks have been deployed in the areas worst affected by the cuts.

The local government says it will carry out emergency repairs to the water supply network.

More than 50% of the water carried by the pipeline leaks out before it reaches its destination.

This is the third time the capital has faced such a drastic form of water rationing this year, the BBC's Stephen Gibbs in Mexico City reports.

It has been deliberately timed to coincide with Easter weekend, when many residents, or at least those who can afford to, leave the city, our correspondent says.

Mexico City was once a floating city, built on a spectacular chain of volcanic lakes, and flooding used to be its main environmental threat.

But since the lakes were finally drained in the 1960s, the city has been struggling with its water supply, our correspondent says.