The global data centre construction boom is outpacing the insurance industry's ability to cover it. Zurich Insurance Group has warned that average project values in its portfolio have climbed from $150 million to $3 billion in five years, that loss limits have been stripped from policies under lender pressure, and that no adequate mechanism yet exists to distribute the resulting risk across a broad enough pool of capital.
Kelly Kinzer (pictured), Zurich's global head of construction and surety, told Bloomberg the shift has created a structural problem for the entire industry. "We have seen more of a push towards the expectation that full limits are purchased on these projects, which has put the entire industry in a very challenging position," she said. "There simply is not enough insurance capacity in the marketplace today."
Zurich's Future of Construction report identifies private credit lenders as a key driver of the change. Unlike conventional bank lenders, private credit providers operate with tighter performance requirements and less tolerance for operational variation, and those conditions have fed directly into insurance arrangements. The practical result has been the removal of loss limits that previously capped total insurer exposure on a single project. According to S&P Global, total insurable values for a single data centre can now reach $30 billion per location, compared with $10 billion for some of the world's largest bridges — a comparison that illustrates how rapidly the concentration of value at individual sites has grown.
Zurich's April 2026 report Data Center Risks Right Now found that AI-driven demand is producing larger, denser projects where construction and early operational phases increasingly overlap, compounding exposures across weather, fire, equipment, labour and power simultaneously rather than sequentially. High GPU hardware costs mean that a single equipment loss event can generate claims that would previously have been associated only with major natural catastrophes.
The strain is being felt across every major data centre market. Globally, spending on data centre infrastructure is forecast to exceed $7 trillion by 2030, with AI capacity build-out accelerating demand across multiple countries and regulatory environments. Governments in the US, Europe, the Middle East and Asia-Pacific are designating data centre development as a strategic national priority, streamlining planning consent and compressing the time available for underwriters to assess new risks at precisely the moment those risks are growing most rapidly.
The regulatory environment adds further complexity. In the US, the EU AI Act is introducing tiered compliance obligations for AI systems hosted in data centres. Across multiple jurisdictions, operators face mandatory incident reporting requirements, escalating compliance costs and potential financial penalties for serious breaches. For insurers, this dynamic cuts both ways: higher operational costs and compliance complexity translate into more intricate risk profiles, while mandatory reporting frameworks will over time generate the incident data the market currently lacks to price these risks with confidence.
Rachel Turk, Lloyd's chief of market performance, has warned that if the industry cannot quickly provide solutions that meet the needs of major technology firms, those risks will migrate into captives or mutual structures. "This represents a significant lost opportunity for the traditional market," she said.
S&P Global Ratings estimated in April 2026 that data centre insurance represents $10 billion in new premiums for 2026 alone, dwarfing the approximately $5 billion generated annually across the entire global aviation industry. Cumulative global insurance premiums associated with data centres are estimated at $134 billion between 2026 and 2030, according to Artemis, citing a broker at Aon.
Several major brokers and underwriters have moved quickly to build dedicated capacity. Aon expanded its Data Centre Lifecycle Insurance Program to $3.5 billion in April 2026, its second capacity increase that year, extending the programme beyond construction-phase cover to existing operational sites. Marsh's Nimbus facility, launched in 2025, has expanded to $2.7 billion. The Fidelis Partnership has launched a consortium focused solely on the construction phase, while FM has secured up to $5 billion in capacity for its FM Intellium clients through a dedicated reinsurance arrangement. The speed of these moves reflects both the scale of the opportunity and the urgency of the capacity gap.
With traditional capacity stretched, the industry is beginning to look at alternative risk transfer. Kinzer acknowledged that securitisation products capable of channelling data centre risk to a wider investor base do not yet exist in meaningful form, though she said those conversations were becoming "more and more necessary." Euler ILS Partners is already working alongside insurers to underwrite specialist policies, and Aon has reported growing interest from ILS investors. The instrument's appeal is structural: ILS investors would bear exposure to physical asset damage only, with no connection to the commercial performance of the underlying facilities, making it a cleaner risk transfer than many emerging asset classes.
Whether the market can build that infrastructure fast enough is the central question. For underwriters, the window to establish technical expertise, accumulation frameworks and capital partnerships in data centre risk is open now — and may not stay open long.
