Insurance
Home›Insurance›Property Insurance›Fire drives most data center losses as AI build-out ac…
Fire drives most data center losses as AI build-out accelerates
Allianz Commercial estimates data center investment could rise from about $500.0 billion in 2024 to more than $1.0 trillion by 2027, while fire accounts for well over 50% of analyzed losses.
The artificial intelligence data center build-out is creating a growing insurance challenge, with Allianz Commercial saying the industry is still calibrating its response as claims mount across North America.
In its analysis of data center claims data, Allianz Commercial found that fire is the dominant severity driver, accounting for well over 50% of around €700.0 million, or about $800.0 million, in analyzed losses. Natural catastrophe activity ranked second, followed by deliberate acts that include crime and cyber incidents, along with power failure, the firm said.
Allianz Commercial also pointed to where the risk is concentrating and how interconnected it can be. It said water damage is the most frequent cause of claims by volume, while business interruption is the primary driver of severity by line of insurance, with natural catastrophe exposure rising as construction extends beyond established hubs.
The report projects the global data center insurance market to grow from about $11.0 billion today to more than $24.0 billion by 2030, and says the US and China are expected to represent about 62.0% of new global capacity additions through 2030. It added that in 2026, 64.0% of US data center capacity under construction will be outside traditional markets such as Northern Virginia, amid higher tornado, hail, and convective storm exposure, and cited a US skilled labor shortage of about 439,000 workers and about 349,000 additional workers needed in 2026.