Allianz: Data center boom ushers in a new era of infrastructure risks and opportunities for insurers

SINGAPORE - 12 August 2026 - Allianz Commercial's latest report highlights the growing interconnectedness of data center construction, operational risks, and insurance within the rapidly expanding infrastructure sector. The AI-driven boom in data center development is projected to reach an unprecedented US$1 trillion by 2027, with the United States and China accounting for roughly 62% of new global capacity additions by 2030.

However, this surge in construction brings a host of new risks that insurers must address to underwrite such large-scale projects successfully.

Thomas Lillelund, CEO of Allianz Commercial, emphasizes that data centers have transcended their role as mere real estate assets to become mission-critical infrastructure. The complexity of these facilities demands a focus on resilience, including access to power, reliable supply chains, robust construction controls, and climate-aware site selection. Additionally, comprehensive insurance coverage has become a prerequisite for financing many large-scale AI infrastructure projects.

The sector's primary constraints are now physical rather than financial, with competitive advantage increasingly determined by access to electricity, grid connections, permitting, specialized equipment, and skilled labor. In the United States alone, there is an estimated shortage of 439,000 skilled workers, while an additional 349,000 may be needed by 2026.

Furthermore, climate resilience is becoming a strategic consideration, as around 79% of global data center capacity is already located in areas exposed to heightened natural catastrophe risk, particularly in the Americas, Asia Pacific, and Europe.

Insurance is evolving alongside the sector, with the global data center insurance market projected to more than double by 2030, reaching over US$24 billion. The increase in insured values is accompanied by growing operational complexity, leading to the necessity of integrated solutions spanning construction, engineering, property, business interruption, cyber, and liability risks.

Fire remains the leading driver of loss severity, accounting for over 50% of data center-related losses, followed by natural catastrophes and willful acts, including cyber incidents.

Allianz Commercial's analysis of insurance industry data center-related claims reveals that water damage is the most frequent cause of claims, followed by business interruption. The risk profile of data centers is evolving as facilities become larger, more complex, and increasingly interdependent. A single event, such as damage to external cooling systems or power disturbances, can result in losses ranging from US$50 million to US$100 million in hyperscale facilities.

To effectively mitigate these risks, insurers must consider the entire risk picture, including power, cooling, batteries, fiber routes, testing, commissioning, and business continuity planning, from the earliest planning stages.