The rapid construction of increasingly large and complex data centers, coupled with increased investment in artificial intelligence (AI) infrastructure, energy systems, and semiconductor manufacturing, is driving a surge in insurance demand.
According to Swiss Re’s Sigma 2026 report, AI hyperscaler capital spending is expected to reach $750 billion in 2026, and AI-related investments accounted for nearly 40% of US GDP growth in the first three quarters of 2025.
A global investment boom in AI infrastructure is reshaping commercial risk pools. Data center reinsurance is complex throughout construction and includes physical perils, dependence on subcontractors, delays and operational phases.
Building a new AI data center can cost more than $20 billion before the equipment is installed, and lenders are increasingly requiring very large insurance limits before financing the project.
Swiss Re explained that modern AI data centers are larger and more complex in design than traditional builds. Built as a campus with dense and interdependent systems, risks are concentrated within a single site.
Once GPUs, tenants, and services are established, value and operational complexity skyrockets, and continuous availability becomes paramount, with business interruption, loss of rent, and service disruption becoming significant risks, analysts say.
These capital-intensive projects require advanced cooling, high-voltage power supplies, backup infrastructure, sophisticated hardware, and robust security software.
Insurance for these large projects is covered by billions of dollars in financing, creating demand for very high insurance limits for single data center locations.
Financial institutions require limits that cover the full cost of construction, even if the expected maximum loss scenario is much lower.
The report highlights that the reinsurance industry is currently only able to support a fraction of this limit at competitive rates for traditional construction risk insurance.
“This unprecedented wave of data center investment will in most cases require insurance throughout the project lifecycle. We estimate that demand could total up to $90 billion by 2030 in terms of insurance premiums. These are insurance premiums. If you think about the capital, the capacity associated with this demand, the capital needed to support these projects is about $200 billion, $300 billion, $400 billion.” Mr. Gonzalez, Chief Executive Officer of Swiss Re Corporate Solutions, said:
Data centers are increasingly being built in locations prone to natural disasters. Approximately 40% of U.S. data center capacity could be located in very high to very high tornado risk zones, and more than a quarter could face increased damage from large hail, according to the report.
This vulnerability occurs at a time when insured losses from natural catastrophes have increased by an average of 5-7% per year in real terms over a long period of time.
Commenting on the report, Mr. Gonzalez emphasized that building resilience to emerging risks requires a holistic view of prevention, insurance, and risk finance.
To overcome these challenges, Swiss Re’s risk engineering team developed a 3W model that focuses on watts, water, and latency, Gonzalez explained.
When it comes to wattage, Swiss Re tries to estimate the energy needed, how it is generated and its long-term sustainability. It is also important to assess the availability of local water supplies to cool many of these data centers.
Additionally, it is important to address both construction and repair delays. Although building the physical shell of a data center is relatively simple, its components are highly globalized, making supply chain risk a significant vulnerability.
“Three things are important. Risk engineering is becoming increasingly important to have the ability to assess how these are structured. The second is alternative risk transfer. So for these kinds of very large risks, traditional insurance solutions are not necessarily sufficient,” Gonzalez concluded.
“And when you think about parametric solutions, for example cat bonds, captive management is also very important because a lot of the companies behind these projects have captives. And the last one is credit and guarantees, because you have to think about financing, construction and the operational risks associated with that.”
This boom extends beyond AI as the world enters a broader capital investment cycle across data centers, energy infrastructure, and advanced manufacturing.
According to Swiss Re, this change is creating new insurable risks and increasing demand across real estate, engineering, cyber, liability and business interruption insurance.
