Allianz Identifies Rising Data Centre Buildout Risks for Global Infrastructure Insurers

Artificial intelligence is fueling one of the largest infrastructure investment cycles in recent history, according to a new report from Allianz Commercial. The rapid expansion of data centers is creating new construction, operational, climate, and insurance risks. Annual investments in data centers are projected to double by 2027, reaching over US$1tn.

The US and China are expected to lead new global capacity additions through 2030, but other countries like Germany, the UK, Ireland, Spain, Finland, and Denmark are also becoming more involved. In Asia Pacific, excluding China, installed capacity is projected to grow from 9GW to over 28GW by 2030, with Malaysia expected to grow more than tenfold.

Data centers are evolving from simple storage assets to mission-critical infrastructure, requiring consideration of resilience factors such as access to power, supply chains, construction controls, climate-aware site selection, and insurance programs. Comprehensive insurance cover is now a prerequisite for financing many large-scale AI infrastructure projects.

The global data center insurance market is expected to double by 2030, reaching more than US$24bn. Fire is the leading cause of loss severity in data center claims, followed by natural catastrophes and willful acts. Water damage is the most frequent cause of claims. Effective risk mitigation must begin early in the data center lifecycle, with resilience designed from the earliest planning stages.