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Capacity not keeping up with data-center growth - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Capacity not keeping up with data-center growth by Claire Wilkinson Michael LaRocca, chief commercial officer at Swiss Re Corporate Solutions, speaks on data centers at Rimsworld on Tuesday. Cyber Risks , Emerging Risks , Technology May 5, 2026 PHILADELPHIA – Explosive growth in data center construction is outpacing the insurance industry’s ability to provide capacity, raising concerns about risk concentration and available limits, a senior executive said Tuesday at the Risk & Insurance Management Society’s Riskworld conference. Demand for data center infrastructure is scaling rapidly, driven by artificial intelligence, cloud computing and digital connectivity, but insurance capacity “is not infinite,” said Michael LaRocca, commercial officer at Swiss Re Corporate Solutions. “The demand and scale is exponentially growing, and the capacity cannot,” he said. U.S. construction of data centers is now outpacing all sectors except residential, while hyperscalers are expected to spend about $600 billion on infrastructure in 2026, Mr. LaRocca said. Globally, the sector is projected to grow about 14% annually through 2030, with insurance premiums rising to about $24 billion from $10.6 billion today. Meanwhile, insured values are surging. Individual facilities that once required $2 billion in limits now demand $20 billion for infrastructure alone, with total exposure potentially doubling when technology assets are included, he said. Lenders typically require coverage up to full project value, adding pressure on available limits, he said. “That is the challenge that we’re seeing right now,” Mr. LaRocca said. The rapid buildout is creating concentration risk as major hubs for data centers cluster in Phoenix, Virginia, Dallas and Northern California, increasing the potential for multiple losses from a single event. Some of these regions face exposure to secondary perils such as hail and tornadoes, adding to underwriting concerns, he said. “Insurance is optimal when you have a great spread of risk,” he said. “When you don’t have a great spread of risk, you have a concern.” Insurers have responded by tightening underwriting and devoting significant resources to assessing exposures and managing accumulation risk. Structured solutions, including parametric products and captive insurer participation, are being explored to supplement traditional coverage, he said. Third-party capital, such as insurance-linked securities and catastrophe bonds, has yet to meaningfully enter the market but is expected to play a role over time. “There are hard constraints on capacity,” Mr. LaRocca said. “Capital usually finds risk,” he said, “but it might take a bit more time in this case.” Related News Investigations key as employers navigate rising psych comp claims May 5, 2026 Reinsurance capital rises, yet profitability falls: Gallagher Re May 5, 2026 Lawsuit abuse is the new personal tax May 5, 2026 Court upholds denial of medical pot reimbursement for psych injury May 5, 2026 Digital asset risks require policy changes to ensure coverage May 5, 2026 Anthony appointed president of Ryan Specialty unit May 5, 2026 Companies urged to treat workforce stress as an enterprise exposure May 5, 2026 Risk managers turn increasingly to captives, alternative cover May 5, 2026 Qatar Insurance’s premiums climb May 5, 2026 Facebook-f X-twitter Linkedin-in Business Insurance is a singular, authoritative news and information source for executives focused upon risk management, risk transfer and risk financing. 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