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Reinsurers stay cautious on data center accumulation risk, Fitch warns

Fitch says accumulation risk is the key challenge as trillions of dollars are expected to flow into data centers in coming years, stretching insurance capacity.

Reported · Written up by our desk · Reinsurance

Fitch Ratings’ Manuel Arrivé, head of EMEA reinsurance ratings, said the rapid expansion of data centers and other digital infrastructure creates a mix of opportunity and significant risk for reinsurers, driven largely by exposure and accumulation concerns.

Arrivé said accumulation risk is the main challenge reinsurers face, characterizing it as new and untested for the industry and noting that reinsurers generally take a cautious approach while weighing risks and benefits against their risk appetite.

He pointed to the scale of expected investment, saying trillions of dollars are anticipated to be invested in data centers in the coming years, which could open growth for insurance and reinsurance capacity even as that capacity is stretched.

Arrivé added that reinsurers are likely to participate alongside other capital sources, including captives, catastrophe bonds, and sidecars, and said the sector will continue to watch for broader economic implications and potential second-order losses into 2027 and beyond.

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