Key facts
- Single hyperscale data center sites in Europe can carry insured values up to $50 billion.
- 58% of data center capacity built since 1990 was delivered between 2020 and 2025.
- 20 US locations account for about 80% of data center floor space hit by severe tornadoes and hailstorms in the past decade.
- Data centers in 20 high-risk US locations generate approximately $16 billion in annual revenue.
- 64% of US data center capacity under construction in 2026 is located outside traditional hubs.
- The March drone strikes on AWS data centers in the UAE and Bahrain exposed a structural coverage problem.
The global data center boom is creating complex insurance challenges as the rapid pace of construction and the concentration of high-value assets outstrip existing insurance programs, according to a new report by Howden. Single hyperscale data center sites in major European markets can now be insured for up to $50 billion, prompting underwriters to price coverage based on maximum probable loss rather than total insured value. This shift reflects the immense scale of individual facilities and the growing concentration of risk.
Howden's 'Insuring the Data Centre Supercycle' report highlights that between 2020 and 2025, approximately 58% of all data center capacity built since 1990 was delivered, compressing more than half of the industry's modern construction history into six years. This rapid buildout means brokers are managing construction all-risks (CAR) placements and operational property programs simultaneously at the same locations, creating potential coverage gaps or overlaps, particularly during commissioning phases.
The report also identifies a significant concentration of risk in specific geographic areas. In the US, 20 locations account for about 80% of data center floor space affected by severe tornadoes and hailstorms over the past decade. These high-risk areas, which generate around $16 billion in annual revenue from data centers, are often chosen for their access to power and space, pushing new projects into markets with elevated exposure to extreme weather. Furthermore, 64% of US data center capacity under construction for 2026 is located outside traditional hubs, moving into these secondary, weather-exposed markets.
Geopolitical conflict poses another growing threat. In March, Iranian Shahed drones struck two Amazon Web Services data centers in the UAE and a third facility in Bahrain. These strikes, confirmed as the first known deliberate wartime targeting of commercial data centers, exposed a structural coverage problem. The expansion of digital infrastructure into conflict-adjacent geographies is occurring faster than the insurance market has recalibrated for it, with data center footprints within 10 to 15 kilometers of active global conflict zones growing significantly in 2025.