Asia-Pacific insurers are facing growing challenges in assessing and pricing emerging risks, as the expansion of AI infrastructure creates exposures that increasingly extend beyond traditional insurance categories, S&P Global Ratings has warned.
Data centres are a particular concern, with their reliance on interconnected power systems, contractors and technology infrastructure making it harder to determine how losses could spread across multiple assets and insurance policies.
In an October 8 briefing following its Asia-Pacific Insurance Virtual Conference, S&P said insurers were under pressure to make underwriting decisions more quickly, despite limited historical data and growing uncertainty over how emerging risks interact.
"Data centres may initially look like a property risk, but many are becoming power and infrastructure risk in their own right," said Matthew Jackson, president of Asia-Pacific at Liberty International Insurance.
"Exposure is no longer limited to one building, but across multiple facilities and contractors. Portfolios may be accumulating more correlated risk than current modeling reflects."
S&P estimates that data centres could generate US$10 billion in new global insurance premiums in 2026. However, the scale of individual projects is already testing conventional insurance arrangements. Its earlier analysis of hyperscale data centres estimated that some campuses could carry insurable values of US$20 billion to US$30 billion, requiring multiple insurers and reinsurers to share the exposure.
The challenges extend beyond project size. Data centres depend on continuous electricity, cooling and network connectivity, meaning disruptions to supporting infrastructure can interrupt operations without necessarily causing physical damage.
Research published by HDI Global in August identified potential weaknesses in data centre construction standards and risk assessments, particularly where facilities are treated as conventional commercial buildings despite their dependence on critical infrastructure.
Such dependencies complicate business interruption coverage and risk accumulation assessments, especially when a single incident could affect several facilities or trigger claims across different policies. S&P warned that similar challenges arise from cyber threats, climate change, geopolitical uncertainty and supply chain disruptions.
"The industry may still be underestimating how these individual emerging risks are slowly interacting and actually amplifying one another," said Philip Hough, chief underwriting officer at Peak Re.
The insurance market is beginning to respond to these challenges. In August, Marsh launched Stratus, an insurance exchange offering access to up to US$10 billion in property insurance capacity for global operational digital infrastructure exposures of US-domiciled companies. The exchange brings together 30 traditional and alternative capital providers.
"There is no shortage of growth opportunities for insurers, whether from cyber, data centre, or the longstanding natural catastrophe protection gap," said Wenwen Chen, credit analyst at S&P Global Ratings.
However, S&P warned that pursuing these opportunities would require insurers to maintain underwriting discipline and protect their capital positions amid volatile financial markets. While most Asia-Pacific insurers rated by the agency maintain very strong financial risk profiles, assessing increasingly complex exposures remains a challenge.
Technology investment could also influence which insurers are better equipped to manage these risks.
"Companies that carry substantial tech and process debts and just find the cost of this transformation difficult to absorb, might get marginalised," said Harpreet Bindra, CEO of HSBC Life Singapore.
