As the rapid expansion of digital infrastructure and artificial intelligence-driven demands reshape the technology landscape, Willis, a WTW-owned insurance brokerage, urges data center owners, developers, builders, operators and investors to rethink traditional insurance strategies.
The company warned that many organizations may currently be receiving more capacity than their actual exposure because the risks are not fully understood or quantified.
The industry is focused on securing large insurance towers amid rapidly growing demand driven by digital infrastructure and artificial intelligence.
Willis said the global market has the ability to provide up to $15 billion in insurance capacity for large-scale data center risks if needed.
However, the more important question, brokers point out, is how much capacity is actually needed based on a thorough assessment of risks across the entire digital infrastructure lifecycle.
The risk profile of digital infrastructure can vary significantly based on site selection, power infrastructure, construction methods, operational resiliency, supply chain dependencies, climatic factors and cyber vulnerabilities.
Clearer risk analysis can help all stakeholders make more informed decisions about insurance requirements, capital allocation and resiliency planning.
To help organizations align coverage with real risks, Willis highlights its eight-point digital infrastructure risk framework. The approach focuses on using risk analysis to refine coverage, cut unnecessary costs and provide greater clarity to lenders and investors.
Willis also noted that by assessing natural hazard and climate risks early in the development life cycle, data center owners and developers can incorporate resiliency measures into asset designs from day one, including flood protection, enhanced wind resistance, enhanced seismic design, heat and drought adaptation measures, wildfire mitigation features, blast resistance and other site-specific controls.
Cost-benefit analysis can help organizations evaluate these resilience investments, support capital allocation, and demonstrate a stronger risk profile to insurers, lenders, and investors.
“Buying more insurance does not always mean getting better cover,” said Alastair Swift, director and chief executive of Willis Global Specialties. “When risks are modeled, understood and mitigated correctly, clients can build more efficient and resilient insurance programs that reflect their actual risks. This is particularly important when lenders and equity partners expect strong protection; a more targeted approach often delivers greater value.”
Willis encourages clients to move from capacity-led purchases to risk- and data-led decisions by quantifying risks in design, construction and operations, simulating realistic loss scenarios rather than market conventions, and by embedding resiliency in designs early in development.
The broker also recommends assessing infrastructure dependencies such as energy, water, cooling and continuity and using verifiable data to support discussions with insurers, lenders and investors.
“As the global digital infrastructure industry continues to grow in size, clients need to have a clearer understanding of what they want to insure and why,” said Jackie Bolig, head of North American placement and brokerage solutions at Willis. “The goal should be to purchase the right amount of insurance, supported by evidence, analysis and a solid understanding of risk, rather than simply seeking the maximum available capacity.”
