International specialist insurer Hiscox is curious about the growth opportunity in data centres and has deployed some capacity, but remains thoughtful given the potential accumulation risk, according to Joanne Musselle, Group Chief Underwriting Officer (CUO).
Hiscox held an earnings call after reporting strong financial results for 2025, with Hiscox Re generating a profit before tax of $286.7 million, up 7% year over year, and an improved undiscounted combined ratio of 67.4%.
During the call, Musselle described data centres as a structural growth opportunity that underpins the digital economy.
“We’re curious, we’ve deployed some capacity in both our primary, in our London Market business, and in our reinsurance business. But at the moment, we’re thoughtful, because one of the significant areas that we need to get ahead around is accumulation,” said Musselle.
She continued, “And we’re also invested, at the same time, deploying a little bit of capacity, we’re also investing in building our own accumulation modelling so we’re really clear around where these accumulations lie, and we can actually manage them ourselves. So, yes, watching it, deploying some capacity, but also thoughtful in terms of accumulation.”
Brokers see data centres as a significant opportunity, with Marsh executives describing it as “the single biggest new business opportunity in 2026” during its Q4’25 earnings call. Lockton recently said the industry has been increasingly focused on risk engineering as data centres evolve into large, complex, multi-billion-dollar campuses. Meanwhile, Aon CEO Greg Case noted that demand in this area could generate more than $10 billion in new premium in 2026 alone.
Musselle also addressed product demand stemming from AI errors/hallucinations, stating that this is an emerging risk.
“There’s going to be some areas of risk that actually improve, because some of it is still driven by fat finger, and actually with AI, there is more consistency in terms of decision making. Maybe some of those errors and emissions actually improve. But there’s definitely new areas of risk, and we’re being really thoughtful about that,” she said.
“Certainly, from our point of view, we’re not going down the route of blanket exclusions. We’re being really thoughtful around the risks that they present, understanding those risks then, indeed, accommodating those risks, either pricing for them or providing affirmative coverage. A good example would be in our UK portfolio and our technology, we were one of the first to confirm affirmative AI coverage within that policy.”
Musselle stated that the other area that Hiscox thinks about is not just risk, but the opportunity.
She noted, “There’s a lot of people, there’s a lot of investment in AI and data centres, that’s attached to this digital world that all need insurance, and we’re really well placed to be able to provide insurance for the consultant who happens to be in that AI world. So, we’re also thinking about it from an opportunity point of view. How do we understand the risk? How do we develop our own products and services to help our customers with that risk? And, then also, how do we broaden our appetite to capture some of this more new economy in terms of their own insurance needs?”
During the call, Musselle also discussed the firm’s underwriting edge in reinsurance, stating that this is driven by a blend of external and internal data, as well as the use of technology in the underwriting process.
