As rapid expansion in digital infrastructure and AI-driven demand reshapes the technology landscape, insurance broker Willis, a WTW business, urges data center owners, developers, builders, operators and investors to rethink traditional insurance strategies.
The firm warns that many organisations may currently be securing capacity beyond their actual exposure due to risks not being fully understood or quantified.
Amid rapid growth in digital infrastructure and AI-driven demand, the sector has focused heavily on securing larger insurance towers.
According to Willis, global markets are capable of delivering up to US$15 billion in insurance capacity for large-scale data center risks if needed.
However, the more important question is how much capacity is actually required based on a thorough evaluation of exposures across the digital infrastructure lifecycle, the broker notes.
Digital infrastructure risk profiles can vary significantly based on site selection, power infrastructure, construction methodology, operational resilience, supply-chain dependencies, climate factors and cyber vulnerabilities.
Sharper risk analysis can help all stakeholders make more informed decisions about insurance requirements, capital allocation and resilience planning.
To help organisations align coverage with true exposure, Willis highlights its eight-point digital infrastructure risk framework. The approach focuses on using risk analysis to refine coverage, cut unnecessary costs, and provide greater clarity to lenders and investors.
Willis also notes that by assessing natural hazards and climate risk early in the development lifecycle, data center owners and developers can incorporate resilience measures into asset design from day one, including flood protection, enhanced wind resistance, seismic design enhancements, heat and drought adaptation measures, wildfire mitigation features, blast resistance and other location-specific controls.
Cost-benefit analysis can help organisations evaluate these resilience investments, support capital allocation and demonstrate a stronger risk profile to insurers, lenders and investors.
“Buying more insurance is not always the same as being better protected,” said Alastair Swift, Willis’ Head of Willis Global Specialties & CEO. “When risks are properly modelled, understood and mitigated, clients can build more efficient, resilient insurance programs that reflect their actual exposures. This is especially important where lenders and equity partners expect robust protection; a more tailored approach can often deliver greater value.”
Willis encourages clients to move from capacity-led buying to risk and data-led decision making by quantifying exposures across design, construction and operations, modelling realistic loss scenarios instead of market conventions, and by embedding resilience by design early in development.
The broker also advises to assess infrastructure dependencies like energy, water, cooling and continuity, as well as to use verifiable data to support discussions with insurers, lenders and investors.
“As the global digital infrastructure sector scales, clients need a clearer understanding of what they are trying to insure and why,” said Jackie Bolig, Head of Placement and Broking Solutions for North America at Willis. “The goal should be to buy the right amount of insurance, supported by evidence, analytics and a thorough understanding of risk, not simply seeking the largest capacity available.”
