Summary
- Fire accounts for well over half the severity of around €700m in analysed data-centre losses.
- Water damage is the most frequent cause of claims, while business interruption dominates severity by insurance line.
- Larger campuses concentrate power, cooling, IT equipment, construction, and operational dependencies into increasingly expensive failure scenarios.
Fire accounts for well over half the severity of around €700m in analysed data-centre insurance losses, while water damage is the sector’s most frequent claim cause, according to Allianz Commercial.
Allianz Commercial said its analysis of industry claims shows natural catastrophes rank second for loss severity after fire, followed by wilful acts — including crime and cyber incidents — and power failure.
By frequency, water damage leads, followed by wilful acts, fire, and equipment breakdown. Business interruption is the primary driver of claims severity when losses are considered by line of insurance.
The figures underline the increasingly interconnected risk inside large data-centre campuses. A modern facility brings together high-voltage power systems, batteries, cooling equipment, generators, networking, servers, and multiple construction and maintenance activities, often while neighbouring halls remain operational.
An incident that begins in one part of the physical plant can therefore propagate through several layers of financial exposure. Allianz said claims involving external cooling-system damage, hot-works fires, and delayed start-up following power disturbances have each reached between $50m and $100m in hyperscale environments.
That concentration is increasing with AI infrastructure. Higher rack densities raise power and cooling requirements, while individual campuses are becoming larger and more expensive. Allianz said construction costs for a single AI campus can exceed $20bn before the full value of high-performance computing equipment is considered.
The insurer expects the global data-centre insurance market to grow from around $11bn today to more than $24bn by 2030. Cover is expanding beyond conventional property insurance towards construction, engineering, business interruption, cyber, liability, energy resilience, operational continuity, and technology risks.
Europe is directly exposed to that shift. Allianz identifies Germany, the UK, and Ireland as major existing markets, while Spain, Finland, and Denmark are expanding more rapidly as developers look for favourable power and permitting conditions.
Site choice does not remove environmental exposure. Allianz estimates that around 79% of global data-centre capacity is already in locations subject to heightened natural-catastrophe risk, while 54% faces chronic heat and drought stress. Marseille is cited among fast-growing markets with notable climate exposure.
The mechanical design consequences are important. Cooling systems that carry substantial volumes of water close to expensive electrical and IT equipment can introduce their own failure modes. Liquid cooling also adds more fluid circuits into high-density environments, increasing the importance of leak detection, isolation, commissioning, maintenance, and clear responsibility between equipment and facility suppliers.
Fire risk is similarly distributed across more than the server hall. Battery systems, generators, switchgear, construction hot works, cable routes, and electrical faults all need to be addressed through compartmentation, detection, suppression, operating procedures, and maintenance.
Power failures can be equally expensive without causing visible physical destruction. A disturbance during commissioning can delay handover, while an interruption at an operating campus can create business-interruption exposure across several tenants and services.
As campuses increase in scale, insurers are therefore looking not only at replacement value but at dependencies between systems. A cooling failure can restrict compute even where the electrical system is intact. A substation problem can remove several halls at once. A commissioning error can delay revenue across a major new phase.
That pushes resilience decisions earlier into design and procurement. The cost of redundancy, physical separation, testing, monitoring, and maintainability has to be weighed against an increasingly concentrated loss exposure — particularly where one campus contains billions of dollars of compute and supports workloads with little tolerance for downtime.
