The rapid construction of increasingly large and complex data centers, driven by growing investment in artificial intelligence (AI) infrastructure, energy systems and semiconductor manufacturing, has triggered a surge in insurance demand.
According to Swiss Re’s Sigma 2026 report, ultra-large-scale capital expenditures on artificial intelligence are expected to reach $750 billion in 2026, and artificial intelligence-related investments accounted for nearly 40% of U.S. GDP growth in the first three quarters of 2025.
A global investment boom in artificial intelligence infrastructure is reshaping business risk pools. Data center reinsurance/insurance is complex throughout the construction process—involving physical hazards, subcontractor dependencies, and delays and operational phases.
New AI data centers can cost more than $20 billion to build before the equipment is installed, and lenders are increasingly requiring very large insurance limits before financing projects.
Swiss Re explains that modern AI data centers are larger and more complex than traditional buildings. They are campuses with dense, interdependent systems that concentrate risk within a single site.
Analysts note that once GPUs, tenants and services are established, value and operational complexity explode, making continuous availability critical and elevating business disruption, rent loss and service disruption to significant risks.
These capital-intensive projects require advanced cooling, high-voltage power, backup infrastructure, advanced hardware and robust security software.
Insurance coverage for these large projects is driven by their multi-billion dollar financing, creating a need for very high insurance limits at individual data center locations.
Financing institutions require limits to cover the full cost of construction, even if the maximum possible loss scenario is much lower.
The report highlights that the reinsurance industry can currently only support a small proportion of traditional construction risk policies at competitive rates.
“Most of the time, the unprecedented wave of investment in data centers requires insurance throughout the life of the project. We estimate that from a premium perspective, the demand could total up to $90 billion by 2030. Those are premiums. If you take into account the capital and capacity associated with this demand, we are talking about $200, $300, $400 billion in capital required to support these projects,” said Gonzalez, CEO of Ivan Swiss Re Corporate Solutions.
Data centers are also increasingly being built in areas with a high risk of natural disasters. According to the report, approximately 40% of U.S. data center capacity may be located in severe to extremely high tornado risk areas, while more than a quarter of data centers may face significant hail risk.
This vulnerability comes at a time when insured losses from natural catastrophes have grown at an average annual rate of 5-7% in real terms over the long term.
Commenting on the report, González stressed that in order to build resilience against new risks, prevention, insurance and risk financing need to be considered comprehensively.
Gonzalez explained that to address these challenges, Swiss Re’s risk engineering team developed the 3W model, which focuses on watts, water and wait time.
When it comes to watts, Swiss Re tries to estimate the energy required, how it is generated and its long-term sustainability. It is also critical to assess the availability of water for cooling in many local data centers.
It is also important to address delays in construction and repairs. While the physical enclosure of a data center is relatively easy to build, its components are highly globalized, making supply chain risk a serious vulnerability.
Gonzalez concluded: “Three things are key and risk engineering is becoming increasingly important, being able to assess how these are constructed. The second is alternative risk transfer, so when it comes to very large risks like these, traditional insurance solutions are not always sufficient.
“When we think about parametric solutions, such as catastrophe bonds, many of the companies behind these projects have captives, so captive management is also very important. The last one is credit and guarantees because you need to consider the financing, construction and operational risks associated with that.”
This boom is not limited to artificial intelligence, as the world is entering a broader cycle of capital investment in data centers, energy infrastructure and advanced manufacturing.
Swiss Re said the shift is creating new pools of insurable risks and expanding demand for property, engineering, cyber, liability and business interruption insurance.
