Willis, the insurance brokerage company owned by WTW, has launched a specialized, forward-looking risk management model designed to deal with the increasingly complex data center environment.
The unveiling comes as the industry moves away from viewing data centers as stand-alone assets and begins to view them as “critical, interconnected digital infrastructure that underpins global technology strategies, AI adoption and economic growth,” the broker explained.
Willis developed this model using partnerships with five of the world’s 10 largest property owners and developers, as well as many of the top data center construction companies.
“Willis is responding to a fundamental shift in the industry’s risk profile that is increasingly systemic, interconnected and difficult to address through traditional insurance solutions alone,” the company said.
The explosive growth of artificial intelligence is driving a surge in global demand for data center capacity, significantly expanding risk exposure beyond just tangible insurable assets.
While the data center industry is expected to generate approximately $10 billion in premiums this year, operators are grappling with a complex and interrelated set of challenges.
These challenges include climate fluctuations, power and water constraints, cyber threats, geopolitics, supply chain disruptions and operational resilience.
George Haitsch, North America technology, media and telecommunications (TMT) industry leader at Willis, commented: “At Willis, we believe deeply in the strength of our expertise and operate with conviction. Data centers have become an important part of the global supply chain, and as this evolves, they face an increasing number of complex and comprehensive risks.
“A ‘one-size-fits-all’ approach is no longer a viable option. Our industry must move from single products to customizable frameworks that embed risk mitigation from the earliest stages of development – and that’s exactly what Willis is doing.”
Willis’ new data center risk management model was developed as an integrated eight-point digital infrastructure risk framework.
It is designed to address the full range of risks faced by data center owners, operators and investors throughout the project lifecycle, from development and construction to steady-state operations.
The framework takes a holistic view, considering current and emerging risks, particularly those that are systemic, difficult to model, or are still developing.
Willis said the new eight-point framework will reduce operational disruption, optimize balance sheet protection, drive sustainable growth and enhance business resilience, and leverage strong cyber and data risk management to safeguard customer trust and reputation.
The framework will also help strengthen corporate integrity and global growth, improve operational resilience, cost efficiency and competitive advantage, manage operational risks to enable smooth business transformation, and enhance long-term competitiveness and resilience through proactive management of emerging and strategic risks.
Bill Creedon, chairman of Willis Global Construction, said: “Data centers are at the heart of the modern economy. From the construction phase to long-term operations, we are working with some of the world’s largest data center developers, owners, contractors and hyperscalers to see first-hand how the industry’s unprecedented growth rate is making risks more systemic, more interconnected and more material.
“These risks extend far beyond technology and require a fundamentally different approach – one that looks at the entire data center life cycle, not just the placement of insured capacity.”
Willis pointed out that energy security is also the most serious risk facing data centers, as power demand puts pressure on the global power grid.
Willis addresses this problem by drawing on deep expertise in conventional, renewable and nuclear energy, including advising on the potential use of small modular reactors to power data centres.
“Willis works closely with Willis’ construction, natural resources, other related industry and brokerage specialties, and risk analysis groups to provide clients with nuclear power insights during the initial construction and operational phases,” Willis said.
