Willis has recently introduced an innovative digital infrastructure framework that classifies data centers as a standalone systemic insurance class. The company emphasizes the changing risk profile of data centers, attributing it to their increasing role in cloud and AI operations. This new approach signifies a departure from traditional single-line property placements, as Willis recognizes the interconnected nature of modern data center facilities. These facilities now function as a cohesive infrastructure with dependencies on power, networks, and supply chains, transcending geopolitical boundaries. Losses in this context are often correlated, necessitating a comprehensive insurance policy that considers multiple factors simultaneously.
Willis has secured over $3 billion in insurance capacity for hyperscale developments, projecting the data center segment to contribute around $10 billion in premium by 2026. This substantial growth underscores the expanding market and the need for a reevaluation of capital allocation within the sector. George Haitsch, North America technology, media, and telecoms industry leader at Willis, highlights the critical role of data centers as essential supply chain components. The evolving exposures and complexities in the sector require a structured insurance framework that integrates risk mitigation from the early stages of design and construction.
The firm’s approach aims to shift away from treating data centers as high-limit property accounts and instead manage them as cross-class infrastructure portfolios. By considering various risks such as property damage, construction risks, cybersecurity events, political influences, and operational interruptions holistically, Willis’ framework provides comprehensive coverage throughout a facility’s lifecycle. Energy security emerges as a central concern, especially with AI-driven campuses consuming more power, increasing the risk of business interruption due to grid failures affecting multiple sites simultaneously.
With approximately 1,100 insured data centers valued at around $250 billion, Willis recognizes the significant potential losses from business interruptions and breaches of service level agreements. The market for data center business interruption insurance has seen substantial growth, with global premiums estimated at $3.9 billion in 2024 and projected to double by 2033. The increasing economic reliance on uninterrupted data center operations underscores the importance of this insurance segment.
Willis’ innovative framework reflects the evolving perception of data centers as core digital infrastructure rather than specialized commercial properties. This reclassification has far-reaching implications for underwriting and risk accumulation in AI-focused economies, highlighting the dynamic nature of the sector’s risk landscape.
