Reinsurers cite rising risk concentration from massive data center projects
What happened
Reinsurers are increasingly concerned about the concentration of risk across multiple lines of coverage associated with large data center projects. Brian Flasinski, CEO of Gallagher Re North America, noted that these projects involve complex, interconnected exposures across the globe, including cyber liability, property, artificial intelligence liability, and business interruption exposures. Will Garland of Marsh Re also stated that geographical concentration is a growing concern as project size increases.
Why it matters
The scale of the largest data center projects, which are often in the tens of billions of dollars, is prompting reinsurers to apply extra scrutiny to aggregation risk. Kerri Hamm of Munich Re U.S. suggested that project sponsors, such as leading internet and cloud providers, should be included in the risk-transfer equation.
Who's involved
- Arthur J. Gallagher & Co.Arthur J. Gallagher & Co. operates Gallagher Re North America, where Brian Flasinski is CEO.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Arthur J. Gallagher & Co.Speculative
Project sponsors, such as leading internet and cloud providers, might face changes in insurance costs or risk transfer requirements.
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The entities involved
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Arthur J. Gallagher & Co.
insurance brokerage and risk management services company
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Philadelphia
largest city in Pennsylvania, United States