The explosive growth in artificial intelligence data centres is challenging insurance companies worldwide.
Private capital is flooding into these projects, which rely on advanced technology and complex funding. Swiss Re Institute predicts that premiums for data centre coverage could more than double to $24.2 billion by 2030.
McKinsey forecasts global spending on this infrastructure at $7 trillion by 2030. This exceeds what hyperscalers like Google and Amazon can fund alone. Tech giants now turn to private equity, credit and debt for these massive builds. Preqin reports private deals often surpassed $10 billion last year. A standout was the $40 billion purchase of Aligned Data Centers by Nvidia, Microsoft, BlackRock and Elon Musk’s xAI.
This investment wave has tested major insurers over the past four to five years. Tom Harper, data centre leader at broker Gallagher, told CNBC it has been a “real stress test.”
He explained, “When you put $10 to $20 billion plus in a single location, it creates capacity issues in the marketplace. The marketplace has always had an appetite for these risks because they are such high-quality builds. They’ve got cutting-edge technology, they’re AA plus plus construction locations, but the capacity, the ability to provide the insurance capacity at these locations, has been tough.”
In 2023 insuring a $20 billion campus was nearly impossible at fair rates. Now such discussions happen weekly.
Quinn Emanuel partner Rajat Rana described the spending to CNBC as “the largest peacetime investment project in human history, which is financed largely off balance sheet.” He added, “We’re talking about trillions of dollars, and almost going back to the same cycle where there’s almost no transparency about the financing structures, the scale is astronomical.” The boom spurs power and chip advances, balancing risks and rewards for insurers.
Specialist policies merge property and tech coverage. High-value sites in hazard zones complicate diversification. GPU lifespans of seven years mismatch buildings’ decades-long lives, dubbed the “GPU debt treadmill.”
CoreWeave’s recent $8.5 billion GPU loan highlights this. Marsh expanded its Nimbus facility to $2.7 billion. “Private credit can meaningfully complement banks and can support non-hyperscale contracted offtakes,” said Marsh’s Alex Wolfson.
Lenders now structure deals cautiously as disputes over leases emerge. Insurers innovate to manage these evolving demands.