Allianz Report: AI Data Centres Now Trigger Multi-Line Claims, Challenging Standard Insurance Models

Allianz Report Maps the Multi-Line Risk of AI Data Centre Claims

The global race to build AI infrastructure is creating an insurance challenge like nothing the market has seen in decades, according to a new report from Allianz Commercial. Annual investment in data centres is expected to nearly double from US$500 billion in 2024 to more than US$1 trillion as soon as 2027. The global data centre insurance market, currently around US$11 billion, is projected to surge past US$24 billion by 2030, driven by rising insured values, fast capacity growth and mounting operational complexity.

The report, which analyses claims across the industry, reveals that fire is the dominant driver of loss severity, accounting for well over half of around €700 million (US$800 million) in examined losses. Natural catastrophe events come next, followed by deliberate acts and power failures, while water damage leads in claims frequency. Business interruption is the primary severity driver across all lines, underlining how crippling even short periods of downtime can be when a facility runs mission‑critical AI workloads.

What makes modern data centres uniquely difficult to underwrite is not the size of any one risk but the speed with which a single event can cascade. A fire in a hyperscale campus, or a power disturbance during commissioning, can trigger simultaneous claims under property, construction, business interruption, cyber, liability and supply chain policies. Allianz’s analysis points to specific losses in the US$50 million to US$100 million range arising from external cooling system damage, hot‑works fire and delayed start‑up caused by power problems.

Christian Kolbe, global head of construction claims at Allianz Commercial, said the central underwriting question has shifted from property value to value concentration. “The key question is not only the value of the building, but the concentration of value and dependency inside and around it,” he said. The report urges brokers to manage the construction‑to‑operational handover as a specific, dated checkpoint, not a general area of concern, and to map exactly where building, equipment and power infrastructure sit across a client’s insurance programme.

Why Insurers and Brokers Must Rethink Coverage as Data Centre Complexity Rises

The Real Cost of Fire and Downtime in AI Facilities

Fire’s dominance in loss severity is a stark reminder that even advanced data centres remain physically vulnerable. With potential campus construction costs exceeding US$20 billion and high‑performance computing equipment adding substantial insured value, a single blaze can quickly produce a nine‑figure claim. Combined with business interruption—often the costliest line—the financial impact moves well beyond what standard property policies were designed to handle, especially when multiple tenants and contractors share the same physical and operational space.

Where Existing Insurance Structures Leave Gaps

The Swiss Re Institute, in a parallel July publication, highlighted that large data centres are frequently presented to insurers through separate programmes covering buildings, equipment and power plants independently. This fragmentation makes it extremely difficult for carriers to track overall exposure. A single loss event can therefore hit several programmes at once, and gaps can appear because limits, triggers and indemnity periods were never designed to be read together. The Allianz report echoes this, noting that power disturbances during commissioning have already caused significant losses, yet cyber and liability cover may not be active during that phase—leaving a costly blind spot.

How Aon and Marsh Are Building Integrated Solutions

In response to these structural challenges, Aon expanded its Data Centre Lifecycle Insurance Programme to US$5 billion in July, spanning construction, operations, business interruption, cyber and liability. Marsh’s Nimbus facility, backed by Lloyd’s and company market insurers, offers up to €1 billion in construction all‑risks cover and up to €350 million for delay in start‑up for UK and European projects. These moves signal that the market is moving toward integrated, multi‑line solutions, but adoption is not yet uniform—brokers who continue to stitch together separate placements risk leaving clients materially exposed.

The Environmental Pinch Point That Could Stall Projects

Around 79% of global data centre capacity already sits in areas with heightened natural catastrophe exposure, and 54% faces chronic heat and drought stress. In the UK, the government has admitted planning errors in approving a hyperscale facility at Iver, Buckinghamshire, pending a full environmental review. As development expands beyond mature hubs in Germany, the UK and Ireland into newer markets like Spain, Finland and Denmark, insurers face less well-understood risk environments—precisely where claims surprises tend to multiply. For underwriters, climate‑aware site selection is no longer a nice‑to‑have; it is becoming a prerequisite for insurability.

Practical Steps to Bridge the Coverage Gaps in AI Data Centre Risk

• At renewal, request your client’s complete data centre insurance programme structure. Map exactly where the building, equipment and power infrastructure sit—whether under one combined placement or separate policies—and confirm that limits, triggers and indemnity periods are consistent across all. This directly addresses the Swiss Re finding that fragmented programmes can leave a client exposed in a single multi‑line event.
• Treat the construction‑to‑operational handover as a specific, dated checkpoint. Confirm the precise date the construction all‑risks policy ends and the operational property and business interruption programme begins, and verify there is no coverage lapse or overlap dispute. Allianz’s own claims data shows that power disturbances during commissioning are a distinct high‑severity loss driver, so this handover is where risk concentrates.
• Check whether cyber and liability cover are active during the testing and commissioning phase, not only from the point a facility is declared fully operational. Several of the largest losses in the Allianz analysis originated in that very phase, and standard wordings often leave it uncovered.
• For any UK or European project, assess the environmental and planning risk profile using the Iver precedent. With the government ordering a full review of a previously approved hyperscale site, projects in areas with heightened flood, heat or regulatory scrutiny could face delays or additional conditions that affect insurability and coverage terms.