Zurich Insurance Group says the rapid expansion of global data centre construction is pushing the limits of available insurance capacity and may require new financial instruments to spread risk more broadly.
Kelly Kinzer, the company’s global head of construction and surety, told Bloomberg that securitisation products – which would channel data centre risk to a wider base of investors – do not yet exist in any meaningful form.
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“I do anticipate with the number of these projects being built at those values, that those types of discussions are going to become more and more necessary,” she said.
The scale of individual projects has grown sharply.
Kinzer noted that the average value of a data centre within Zurich’s portfolio has climbed from $150m (€130.83m) five years ago to $3bn today.
That trajectory sits within a broader financing boom, with technology companies including Oracle, Meta and Alphabet contributing to global bond issuance exceeding $6.57tn in 2025, according to Bloomberg.
Zurich’s Future of Construction report, released this week, examines how private credit has reshaped both the financing and execution of data centre projects.
The report finds that private credit lenders tend to operate with tighter performance requirements and less tolerance for operational variation than conventional bank lenders – conditions that have rippled through to insurance arrangements.
One notable consequence has been the disappearance of loss limits, which previously capped the total exposure an insurer would face on a given project.
“We have seen more of a push towards the expectation that full limits are purchased on these projects, which has put the entire industry in a very challenging position,” Kinzer said.
“There simply is not enough insurance capacity in the marketplace today.”
Insurable exposures include weather-related physical damage, with the high replacement cost of graphics processing unit hardware elevating the value at risk.
Alternative capital providers are already entering the space: Euler ILS Partners is working alongside insurers to underwrite specialist policies, and Aon has reported interest from insurance-linked securities (ILS) investors seeking a foothold in the market.
ILS instruments, whose returns are linked to specified trigger events – most used in catastrophe bond structures – are being examined as a way to distribute data centre risk at a time when the commercial returns on AI infrastructure remain uncertain.
Crucially, investors in such instruments would bear exposure to physical asset damage only, with no connection to the underlying commercial performance of the facilities themselves.
