As AI data center construction proliferates across the United States, Lloyd’s specialty insurer MS Amlin found that many of these projects are particularly exposed to costly natural disaster risks. According to their analysis, 56% of the 670 U.S. data center projects that are either under construction or in the planning phase are located in states that are highly exposed to hurricanes, severe convective storms, earthquakes or winter storms, all of which can disrupt power networks and create business interruption risks for the data center and its downstream customers.
These at-risk projects represent nearly $800 billion in investment. Since data centers are typically insured through various business lines, facilities can unknowingly accumulate exposure across multiple policies.
“As AI investment accelerates, insurers must adopt more advanced ways to manage aggregation risk,” said Martin Burke, MS Amlin’s chief underwriting officer. “If the industry is slow to address this challenge, it could restrict the deployment of capital and roll out of AI infrastructure.”