The data centre industry is evolving into increasingly complex, high-energy-density facilities that concentrate risks within single sites, with underwriting success depending not only on capacity, but also on specialised technical assessment and disciplined accumulation management, according to a recent report by the Swiss Re Institute.
Swiss Re highlighted that data centres powering today’s AI infrastructure are growing rapidly in both scale and complexity, challenging the insurance industry’s ability to provide the coverage demanded by financing.
In the report, Swiss Re noted that demand for data centre insurance is rising, with global insurance premiums tied to data centres expected to increase to $24.2 billion by 2030, up from $10.6 billion. Re/insuring data centres at this scale is complex, both during construction and, in particular, during the operational phase.
“While construction risk is primarily about creating the asset (challenges include physical perils, subcontractor interdependencies, and delay), operational risk is about keeping a high-value, multi-tenant critical system continuously available. Once GPUs, tenants, and services are in place, both the value and operational complexity increase, making business interruption (BI), loss of rent, and service interruption critical. We also see emerging exposure drivers in rising insured value on catastrophe-exposed locations,” said Swiss Re Institute.
Water damage from cooling failures, vulnerabilities in power continuity, and new fire ignition sources are additional emerging contributors to data centre risk.
For these large, complex facilities with high concentrations of value, accumulation transparency is critical, as insured portfolios can unintentionally build significant concentrations.
Swiss Re noted that large data centres are sometimes presented to risk carriers through separate insurance programmes (e.g., building, equipment, and power plants), making capacity accumulation difficult to track. This can allow a single loss event to impact multiple insurance programmes.
Large data centres also concentrate numerous tenants and insured interests within a single physical footprint, often behind common critical systems such as power, cooling, and fire protection. This increases the likelihood of multiple concurrent claims arising from a single event.
Swiss Re emphasised that such facilities require sophisticated, multi-layered protection strategies.
“Insurers have deep experience with traditional data centres, but only a few large, next-generation facilities are fully operational yet, making empirical loss experience limited. In this environment, underwriting success depends not only on capacity, but on specialised technical assessment and disciplined accumulation management,” the reinsurer concluded.
