Data centers have become a material and long-lasting exposure for the credit, surety and political risk market, and reinsurers often cannot see who sits behind the risk, according to Willis Re.
In its October market view ahead of the January 1 renewals, the reinsurance broker called data centers “the exposure question of the decade”. Alphabet, Amazon, Meta and Microsoft have guided to more than $700 billion of combined capital spending in 2026. McKinsey puts global data center investment at around $6.7 trillion by 2030.
The hyperscalers themselves are among the strongest corporate credits in the world. The difficulty is how projects are financed. Many data centers are built through special-purpose vehicles (SPVs). The hyperscaler signs a lease with the SPV, and the SPV borrows to build. When a lender insures that loan, the obligor ceded to reinsurers is the SPV, and a reinsurer may not even know the risk is a data center.
Aggregation is the next problem. The same few hyperscaler names already sit among the largest buyer exposures in trade credit portfolios, and stand behind the leases on SPV-financed projects. A single project can create exposure across credit, surety, property, construction and cyber at once, so a reinsurer’s total exposure can be far larger than any one treaty suggests.
The second tier is weaker. S&P cut Oracle to BBB- in July, and CoreWeave’s credit default swaps traded at distressed levels in mid-October. Willis Re said project cancellations and delays are rising, though it was not aware of any defaults on data center loans to date.
Willis Re linked credit exposure to physical risk. Single campuses can cost more than $20 billion to build, against property limits in the low single-digit billions, and many sit in areas exposed to hail, tornado, hurricane and wildfire. A data center that cannot get property cover, power, water or chips on time may be delayed or abandoned, putting pressure on the contractors, sponsors and lenders behind it.
Capacity is abundant. Reinsurers hold record capital, property catastrophe pricing is softening, and new entrants keep arriving, though most follow rather than lead. Willis Re expects proportional ceding commissions to be broadly stable to modestly higher for clean portfolios. But it said the softening reflects capital supply rather than better loss experience, so programs with data center concentrations, severity losses, Brazilian exposure or stressed sovereigns should expect scrutiny.
In political risk, sovereign stress is rising. Senegal is restructuring after discovering more than $11 billion of misreported debt. Mozambique has been cut to CCC by S&P, and Iraqi oil revenue has fallen sharply amid the Gulf conflict. Berne Union members paid a record $11.1 billion of claims in 2025.
For cedents, the message is to look through their portfolios before reinsurers ask. Identifying the offtaker, sponsor and site behind each SPV, and mapping aggregation across lines, is likely to become a standard renewal requirement. With the AI build-out creating concentrations faster than data can track them, cedents who can show that work will have the advantage.
