Zurich says AI data centers need new insurance to unlock financing

AI data centers are getting so large that Zurich Insurance Group said the old playbook no longer works. The average project in its portfolio has jumped from about $150 million five years ago to $3 billion today, and some lenders are already stepping back because they do not see enough insurance behind the financing.

That is reshaping product design as much as capacity. Zurich said its property and casualty gross written premiums rose 8% on a like-for-like basis to $15.6 billion in the first quarter of 2026, with commercial insurance up 9%, while its $10 billion Global Specialty Business grew 7%. The company said its U.S. construction business increased volume by 21%, and that its construction and surety portfolios are positioned to benefit from long-term investment in data centers and infrastructure. Zurich also widened its data-center offering beyond the United States to Brazil, Germany, Italy, the Nordics and Spain.

Zurich’s own analysis frames the problem as a “risk confidence” issue, not just a shortage of capital. The insurer said data-center campuses have become $30-plus billion hyperscale builds, cited Goldman Sachs Research’s view that global data-center power demand could rise 50% by 2027 and as much as 165% by decade-end, and said the financing chain is already fraying when insurance terms do not match the scale of the asset. Zurich’s message is blunt: if a project cannot be insured, it will not be financed.

For carriers, that pushes underwriting deep into engineering data and accumulation management. A data-center policy can no longer be priced mainly from square footage and construction class. It has to absorb site-level detail on power density, cooling, grid dependence, wildfire, wind and storm exposure, plus how much risk the sponsor keeps through captives or balance-sheet retentions. That is the software challenge too: core systems, underwriting workbenches and analytics platforms must handle layered placements, partial limits, reinsurance attachments and capital-markets structures without losing sight of the same campus across multiple carriers and jurisdictions.

Swiss Re’s March research sharpened the accumulation picture. It said construction costs for a single site can reach $20 billion before technology installation, more than a quarter of U.S. data-center capacity may face at least three large-hail days a year, and more than 40% could sit in significant-to-very-high tornado-day zones. Swiss Re also projected data-center premiums could rise to $24.2 billion by 2030 from $10.6 billion. S&P Global Ratings has already pegged the 2026 market near $10 billion in premiums, larger than the roughly $5 billion global aviation market. Against that backdrop, Kelly Kinzer said securitization products may become necessary because “there simply is not enough insurance capacity in the marketplace today.”