Data centre construction in London has more than doubled over two years, but the insurance structures covering those assets have not kept pace with the concentration of risk they now carry, according to new analysis from Howden.
London delivered 193 megawatts of new data centre supply in 2025, a record, with a further 180 megawatts forecast for 2026. The UK remains the largest data centre market in Europe, with London accounting for more than 80% of national supply. That scale brings with it insured values the London market was not designed to absorb site by site.
Howden's Insuring the Data Centre Supercycle report maps the risk landscape across six interconnected segments: construction, natural catastrophe, power supply, outage, cyber and geopolitical conflict, and liability. The analysis draws on Howden's proprietary data from the world's leading data centre database alongside public records. Its central finding is that data centre risk is unlike most commercial property risk, because a single event can simultaneously trigger claims across property, liability, cyber and business interruption lines. Those lines are routinely placed in separate programmes.
The structural problem the report identifies most clearly is concurrency. Large hyperscale campuses are built in phases, meaning fully operational, revenue-generating facilities frequently sit alongside active construction on the same site.
Between 2020 and 2025, roughly 58% of all data centre capacity built since 1990 was delivered - more than half the modern industry's construction history compressed into six years, according to Howden's analysis of 451 Research by S&P Global data. The pace of that buildout means brokers are managing construction all-risks (CAR) placements and operational property programmes at the same locations simultaneously.
The problem is where one ends and the other begins. Brokers should confirm the exact handover date at which a CAR policy ends and the operational property and business interruption programme begins, and verify there is no coverage lapse or overlap dispute at that boundary - since power disturbances during commissioning are a distinct, high-severity loss driver, according to Allianz Commercial's claims data. At sites where construction is ongoing next to live operations, that boundary is not a single date but a rolling condition that shifts as new phases come online.
Howden notes a second pressure: insured values at single hyperscale sites can reach $20 billion to $50 billion, concentrations large enough that underwriters are pricing against maximum probable loss rather than total insured value.
Zurich's global head of construction and surety, Kelly Kinzer, has warned that at the largest end of the scale there is simply not enough capacity in the market to insure these projects to full value, and investors, including Blackstone, were reported in March to have passed on data centre debt opportunities because of insufficient insurance.
The conflict and cyber coverage gap in the Howden report has a specific event behind it. In March, Iranian Shahed drones struck two Amazon Web Services data centres in the United Arab Emirates, with a third facility in Bahrain also hit. Multiple availability zones failed simultaneously, defeating standard redundancy assumptions. The strikes were confirmed as the first known deliberate wartime targeting of commercial data centres. Howden frames them as a consequence of a structural trend rather than an isolated incident.
Data centre capacity within 10 to 15 kilometres of active global conflict zones in 2025 alone equalled around 60% of the total accumulated over the preceding five years, and was four times the volume recorded in the five years before that, according to Howden's analysis of Uppsala Conflict Data Program records. That proximity creates an exposure that sits uncomfortably across standard policy lines: property war exclusions typically remove physical damage cover, while cyber policies typically exclude physical damage as a trigger. A conflict event that damages infrastructure and simultaneously causes widespread digital outage falls into the gap between the two.
Brokers placing data centre risks must address the collision between data centre growth and planning and environmental constraints, which is already reshaping how projects are approved and insured in Britain as illustrated by the government conceding a "serious logical error" in approving a hyperscale facility at Iver, Buckinghamshire.
"The opportunity for the insurance market is not simply to provide more capacity, but to use data, specialist advice and risk transfer to help clients identify these exposures early and build greater resilience as the sector expands," said Edward Howland Jackson, chief commercial officer of global specialty at Howden.
The third segment the report flags is liability, where the pattern is distinct from the conflict or construction risks. Major data centre lawsuits and arbitrations tripled globally between 2021 and the first half of 2026, according to Howden's review of court records, industry reporting, and NGO case trackers. Planning, zoning, and environmental disputes account for 78% of that growth over the past three years.
More than 60 separate planning applications were made for data centre construction in England and Wales in 2025 alone, according to AXA XL, with proposed changes to the UK National Planning Policy Framework intended to streamline permitting. That is a sign that the friction between development scale and regulatory process is already being managed at policy level.
Noise and nuisance complaints, including allegations relating to cooling systems and diesel generators, have also become a primary driver of litigation. Of nine noise disputes tracked by Howden globally, only one has been resolved, and it ended in a data centre closure. That pattern suggests the liability tail on these assets extends well beyond construction completion and into community relations issues that insurers have limited historical loss data to price.
Howden estimates the combined premium opportunity across construction, natural catastrophe, power supply, outage, cyber, and liability risks at US$5 billion (£3.7 billion), or approximately 60% of annual US operational premiums by 2030, with international volume on top. For the London market, which writes data centre risks across construction, property, cyber, political violence and liability lines, the premium opportunity is not in doubt. The programme structures being placed today are the question, specifically, whether they are built to handle losses that arise when those risks converge at the same site simultaneously.
