The rapid global expansion of data centre infrastructure is reshaping the insurance landscape, driving both unprecedented demand for coverage and a sharp rise in associated risks. According to a recent report by Swiss Re, the sector’s accelerating growth is placing increasing pressure on insurers and reinsurers, who must balance rising exposure with limited capacity.
Data centres have become critical to the digital economy, underpinning cloud computing, artificial intelligence, financial services, and telecommunications. As demand for data storage and processing power surges, investment in large-scale facilities has intensified across North America, Europe, and Asia. However, this boom is accompanied by mounting financial and operational risks that are proving difficult for the insurance industry to absorb.
The report forecasts that global insurance premiums linked to data centres will rise dramatically from approximately $10.6 billion today to $24.2 billion by 2030. This more than twofold increase reflects not only the growing number of facilities but also the escalating value of assets concentrated within them.
A major challenge lies in the sheer scale of construction costs. Building a single hyperscale data centre can exceed $20 billion, prompting lenders and project financiers to demand comprehensive insurance coverage that matches the full value of these investments. Yet, Swiss Re cautions that the insurance and reinsurance markets are currently unable to provide such high limits at competitive premiums under traditional risk-transfer models. This gap between demand and supply is emerging as a key constraint for the sector.
The concentration of high-value assets in individual locations further amplifies exposure to physical risks. Natural catastrophes—including storms, floods, earthquakes, and wildfires—pose a persistent threat. In addition, technical vulnerabilities such as cooling system failures can result in water damage, while disruptions to power supply can halt operations and lead to substantial financial losses.
In the United States, where a significant proportion of global data centre capacity is located, the geographical distribution of facilities adds another layer of concern. The report estimates that more than 25% of U.S. data centre capacity is situated in regions with considerable exposure to hailstorms, while over 40% lies in areas prone to tornado activity. These environmental risks increase the likelihood of severe losses and complicate underwriting decisions.
Below is a summary of the key projections and risk factors outlined in the report:
| Indicator | Current Estimate | 2030 Projection |
|---|---|---|
| Global data centre insurance premiums | $10.6 billion | $24.2 billion |
| Typical cost per large data centre | Up to $20+ billion | Increasing further |
| Key physical risks | Natural disasters, power outages, cooling failures | Intensifying with scale |
| U.S. hail exposure | Over 25% of capacity | Persistent risk |
| U.S. tornado exposure | Over 40% of capacity | Persistent risk |
Industry experts suggest that addressing these challenges will require innovative insurance solutions, improved risk modelling, and greater collaboration between insurers, reinsurers, and technology firms. Without such adaptation, the widening gap between coverage demand and available capacity could hinder future investment in digital infrastructure.
As the digital economy continues to expand, the resilience and insurability of data centres will remain a critical concern for stakeholders worldwide.