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The global data centre insurance market is forecast to more than double to over USD $24 billion by 2030, as the rapid expansion of artificial intelligence infrastructure increases the value, complexity and concentration of risks faced by insurers, according to Allianz Commercial, the commercial insurance business of Allianz Group.
Allianz Commercial estimates that the market will increase from around USD $11 billion currently to more than USD $24 billion by 2030. The insurer says growth will be supported by expanding data centre capacity, higher insured values and increasingly complex operational risks. Construction costs for individual AI campuses can exceed USD $20 billion, while insured values rise further once high-performance computing equipment is installed.
The company says the insurance requirements of data centres are also broadening. Alongside traditional property insurance, demand is expected to increase for cover spanning construction, engineering, business interruption, cyber and liability. Allianz Commercial also points to opportunities for insurers in areas including energy resilience, operational continuity and technology risk.
“AI is turning the latest generation of data centers from a specialist real estate asset into mission-critical infrastructure,” commented Thomas Lillelund, CEO of Allianz Commercial. “The scale of investment is extraordinary and, as these centers evolve beyond traditional data storage to high-performance compute demands, success will increasingly depend on resilience: access to power, reliable supply chains, robust construction controls, as well as climate-aware site selection and insurance programs that reflect the true accumulation risk. Indeed, comprehensive insurance cover has become a prerequisite for financing many large-scale AI infrastructure projects.”
According to Allianz Commercial, the changing scale of data centres is also increasing the potential severity of insurance losses. Its analysis of industry claims data found that fire was responsible for well over half of around EUR €700 million (USD $800 million) in losses examined. Natural catastrophe events were the second-largest contributor to loss severity, followed by willful acts, including crime and cyber incidents, and power failure.
Water damage was the most common cause of claims in the data analysed by Allianz Commercial, followed by willful acts, fire and equipment breakdown. Business interruption was the largest contributor to claims severity by insurance line, reflecting the potential financial impact when critical facilities are unable to operate.
The concentration of infrastructure within individual sites can further increase insurers’ exposure. Allianz Commercial says hyperscale and colocation campuses can combine tenants, servers, construction activity, cooling systems, power infrastructure and other utilities within the same physical or operational environment. As a result, one incident can generate claims across several insurance lines, including property, construction, business interruption, liability, cyber and financial cover.
The insurer cites claims involving damage to external cooling systems, hot works-related fires and delays to start-up caused by power disturbances, with individual losses reaching between USD $50 million and USD $100 million.
Climate-related risks are another factor for insurers assessing data centre exposures. Allianz Commercial reports that around 79% of global data centre capacity is located in areas facing heightened natural catastrophe risks, while 54% is exposed to chronic heat and drought stress.
“For insurers, the key question is not only the value of the building, but the concentration of value and dependency inside and around it. Power, cooling, batteries, fibre routes, testing and commissioning, and business continuity planning are all part of the same risk picture. Effective risk mitigation must begin early and continue throughout the data centre lifecycle. Resilience must be designed in from the earliest planning stage,” added Christian Kolbe, Global Head of Construction Claims at Allianz Commercial.
The insurance growth outlook comes against a backdrop of substantial investment in data centre infrastructure. Allianz Commercial says annual investment is expected to increase from around USD $500 billion in 2024 to more than USD $1 trillion as early as 2027. The US and China are expected to account for around 62% of global capacity additions through 2030, while investment is also expanding across Europe and Asia Pacific.
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