Managing Accumulation Risk in Data Centers

Managing Accumulation Risk in Data Centers
August 13, 2026 10 mins

Managing Accumulation Risk in Data Centers

Managing Data Center Accumulation Risk

Data centers today, driven by growth and scale, concentrate enough value for a single event to create a portfolio-level loss. Re/insurers and captives that understand and manage aggregation exposure will be better positioned to sustain capacity and support long-term sector growth.

Key Takeaways
  1. Rising total insured values across data center campuses within the same location or region are increasing the potential for multi-site, multi-policy losses, putting pressure on re/insurance capacity.
  2. Limited visibility of interconnected exposures creates a gap in how data center accumulation risk is quantified, priced and managed.
  3. Stronger accumulation risk management can improve underwriting confidence, support more resilient program structures and enable sustainable capital deployment.

Digital infrastructure is increasingly built at campus scale, driven by growing demand for computing capacity and AI-enabled workloads. High-value data centers are clustered in regional hubs, where shared infrastructure, contractors, equipment and supply chains create interdependencies across sites. Disruption at a single location can escalate quickly, triggering impacts across multiple facilities and policies.

While most data center projects remain below $2 billion in insured value, hyperscaler campuses planned over the next five years are increasing significantly in scale, with capital expenditure exceeding $20 billion before the addition of high-value equipment.1 Site selection is typically driven by access to land, water and power, reinforcing geographic clustering in key markets.

For re/insurers and captives, this introduces a portfolio-level accumulation concern alongside existing site-level underwriting challenges. The primary issue is not traditional probable maximum loss severity, but the aggregation of total insured values (TIV) within a single campus and across interconnected sites and policies. Expected losses generally remain low, but large concentrations of value create low-frequency, high-severity exposures where tail risk can be significant.

Quote icon

The accumulation of risk in data center construction and operation is significant, as it involves several different players: the construction company, owner, operator, space tenants, critical utility providers and financiers. Their responsibilities are interdependent and often overlapping.

Clemens Freitag
Construction & Infrastructure Industry Lead, Latin America

How Data Center Accumulation Risk is Evolving

Aggregation is now multi-dimensional, with interconnected exposures spanning physical assets, shared power, cooling and grid dependencies, digital systems, and natural and man-made catastrophe exposure.

Faced with this shift, re/insurers are asking:

  1. How exposed are we to accumulation risk in data center campuses and amid our other portfolio exposures?
  2. Do we have the visibility and tools to quantify, manage and price that risk before a single event triggers multi-policy, multi-insured losses?

The answers will directly influence insurance limits, retentions, pricing, coverage certainty and capital planning for every stakeholder.

“Increased scrutiny is coming, but organizations shouldn’t see it as a black cloud fast-approaching on the horizon,” says Brian Hearst, Aon’s Global Digital Infrastructure CAR/Builders Risk Leader. “Rather, reinsurers and insurers are asking important, reasonable questions to support sufficient capacity for future digital infrastructure projects.”

That's good news, emphasizes Molly Tully, Executive Managing Director for Aon’s Reinsurance Solutions, United States: “Capacity providers in the stack are eager to build a framework to understand accumulation risks.”

To respond effectively, reinsurers and captives need clearer visibility of portfolio-level risks, coupled with a more structured approach to how accumulation is created, segmented and governed.

2-5

While most current data centers rely on existing power infrastructure, Aon projects that on-site power generation will drive additional accumulation risk over the next two to five years.

Accumulation is shaped through program design, coverage structure and risk retention choices.

Why Accumulation Risk is Hard to See

Accumulation in data centers operates across both vertical and horizontal dimensions:

  1. Vertical: Multiple policies stack at a single campus, often across lines of business.
  2. Horizontal: Exposures impact multiple campuses, regions and portfolios simultaneously.

A third dimension is time. Exposure evolves as campuses move from construction into phased operations, creating periods where insured values and policy responses overlap and peak accumulation intensifies.

Re/insurers may recognize the scale of their aggregate exposure, but still lack a clear view of how risks intersect across portfolios and lines because:

  • High-value equipment, like chips and GPUs, has limited location transparency when insured under marine/specie or specialist policies.
  • Data is fragmented across property, cyber, construction, liability and environmental lines, reducing consistency.
  • Different insurers cover buildings, equipment, tenants, power generation and construction within the same site.

In some cases, a single insurer may provide cover across multiple project phases, from construction through to operations. “A new phase can then become harder to place with the same markets because they already have too much exposure at one location,” says Vincent Banton, Aon’s Head of Construction & Infrastructure, Asia Pacific.

Quote icon

Limited aggregation visibility can be challenging to solve because reinsurers and insurers don’t have control over the risks added to a treaty portfolio. Inconsistencies in how clients report or identify exposures and months-long lags in data gathering add even more hurdles.

Molly Tully
Executive Managing Director, Reinsurance Solutions, United States

Top Concerning Data Center Accumulation Scenarios for Re/insurers

  • 01
    Physical Loss

    A fire, explosion or cooling failure spreads rapidly across halls, with a root cause (e.g., equipment failure, installation defect, cyber trigger or power fault) that’s difficult to pinpoint.

  • 02
    Cross-Policy Clash

    One event triggers property, business interruption, cyber, marine/specie, environmental and liability policies, involving dozens of insurers.

  • 05
    Concentration Risk

    Losses comparable in size to those from a major nat cat, but concentrated across far fewer insureds, materially affect earnings for re/insurers.

How Accumulation Risk Reaches the Insurance Buyer

Challenges in mapping and mitigating aggregation risk can erode market confidence, with direct consequences for project insurability, financing and long-term viability, including:

  • Increased placement friction and reduced available limits for single risks or portfolios
  • Higher retentions and more restrictive terms
  • Increased scrutiny of site clustering, power dependency and asset values
  • Greater reliance on captives and structured risk financing
  • Patchwork of insurers and policies for the same campus, affecting claims coordination and coverage certainty

Organizations that share exposure data, engage earlier with carriers, and demonstrate disciplined risk and accumulation management will be better positioned as market expectations and capacity tighten.

Loss prevention becomes a key lever insureds can pull to help carriers justify capacity deployment for high-value sites.

How Industry Stakeholders are Responding to Accumulation Risk

  • Contractors, Owners and Operators

    Stakeholders are designing data centers to reduce interdependencies and contain loss events. This includes segmenting power, cooling and fire systems, diversifying power sources, phasing development and reducing reliance on shared infrastructure.

  • Regulators

    Regulators are increasingly treating large campuses as critical infrastructure, with greater scrutiny on resilience, concentration and geographic diversification. Focus is shifting from individual facilities to cluster-level exposure, with growing emphasis on visibility into aggregated values and interconnected risks.

  • Re/insurers

    Markets are developing program structures that support the full life cycle of a data center campus. Aon’s Data Center Lifecycle Insurance Program (DCLP) consolidates construction, cyber, cargo and operational cover into a single $5 billion program, explicitly managing risk from construction into operations.

    Insurers are working closely with digital infrastructure builders and developers to optimize site selection, engineering, building spacing, power and interdependencies to maximize resiliency and reduce the potential for loss.

Quote icon

Insureds and insurers in this industry are aligning to minimize costly downtime risk and maximize resiliency. This is a core feature that makes the space such a great opportunity for reinsurers and insurers.

Molly Tully
Executive Managing Director, Reinsurance Solutions, United States

5 Steps to Achieve Smart Data Center Accumulation Risk Management

  1. Establish portfolio-level visibility. Identify and tag digital infrastructure exposure consistently across lines of business. Track vertical and horizontal aggregation to understand how risk accumulates beyond individual sites.
  2. Apply complementary risk assessment approaches. Combine deterministic scenarios with probabilistic modeling to quantify potential loss at site, campus and regional levels. Integrate risk engineering insights to reflect build complexity and operating conditions.
  3. Prioritize the most valuable assets. Physical infrastructure and chips hold the most value and exposure — and offer the strongest return on risk management investment.
  4. Embed governance and structure. Create dedicated accumulation taskforces with clear ownership of the risk within underwriting and risk functions.
  5. Match risk with capital. Identify and determine the optimal gross to net strategy based on entity appetite, leveraging all sources of available traditional and alternative capital. For original insureds, captives can absorb and smooth volatility when backed by clear accumulation insight.

Putting these principles into practice requires a structured, end-to-end framework. At its core is a clear definition of risk ownership and governance.

“Managing accumulation risk effectively requires establishing an integrated, contractually binding risk and responsibility matrix from the outset of a project,” explains Morgana Multini, Aon’s Technology, Media and Communication Lead, Latin America. “The matrix should clearly define who owns each risk type, setting out required insurance cover and limits for each party. It must also explain how indemnities and subrogation will work, and how governance will be maintained through risk committees, SLA reviews, continuity testing and joint incident response.”

Aon advocates for early-stage risk advisory that strengthens resilience, supports sustainable design and addresses power and supply chain constraints. Combined with efficient capital deployment, this enables stakeholders to capture opportunity while managing risk.

Positioning the Market for Sustainable Digital Infrastructure Growth

Stakeholder coordination across reinsurance, insurance and alternative capital is critical to managing tail risk and supporting data center infrastructure as a sustainable asset class.

“Robust treaties and reinsurer support for carriers via treaty reinsurance will remain important,” says Banton. “Reinsurers can also provide facultative support to help carriers write additional capacity, but insurers need to be proactive in better managing and communicating these risk aggregations to equally improve reinsurance outcomes.”

The aim is to underpin development with durable capital before a defining loss event forces a market correction. Partner with us to unlock deeper accumulation insights, more confident underwriting and stronger resilience for your data center portfolios.

Understanding accumulation risk is the first critical step. Soon, insurers will have a new way to identify, quantify and benchmark digital infrastructure exposure across their portfolios. Watch this space.

Aon’s Thought Leaders

Daniel Raizman
Managing Director and Global Head of Client Engagement, Climate Risk Advisory

Molly Tully
Executive Managing Director, Reinsurance Solutions, United States

With contributions from Vincent Banton, Jon Chapman, Clemens Freitag, Brian Hearst and Morgana Multini.

1 Reliable by Design: The New Risk Playbook for Digital Infrastructure, Aon

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Aon Insights Series Asia

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series Pacific

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series UK

Expert Views on Today's Risk Capital and Human Capital Issues

Client Trends 2025

Better Decisions Across Interconnected Risk and People Issues.

Construction and Infrastructure

The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Global Risk Management Survey

Better Decisions Across Interconnected Risk and People Issues.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Impact Report 2025

Explore Aon's corporate sustainability impact and strategy.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Industry Insights

These industry-specific articles explore the top risks, their underlying drivers and the actions leaders are taking to build resilience.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Human Capital Quarterly Insights Briefs

Read our collection of human capital articles that explore in depth hot topics for HR and risk professionals, including using data and analytics to measure total rewards programs, how HR and finance can better partner and the impact AI will have on the workforce.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Natural Resources and Energy Transition

The challenges in adopting renewable energy are changing with technological advancements, increasing market competition and numerous financial support mechanisms. Learn how your organization can benefit from our renewables solutions. 

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Pay Transparency and Equity

Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.

Property Risk Management

Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Transaction Solutions Global Claims Study

Better Decisions Across Interconnected Risk and People Issues.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
  • Global Insurance Market Overview

    Article 28 mins

    Q2 2026: Global Insurance Market Overview

    Abundant capacity, strong competition and record levels of industry capital continued to support favorable market conditions in Q2, while insurers increasingly leveraged AI and advanced analytics to aid underwriting decisions and differentiate between risks.

View All
Subscribe CTA Banner