Data centre risk transfer news

As the collateralized reinsurance sidecar market continues to expand, and momentum builds around the data centre build-out, Jarad Madea, Chief Executive Officer of Howden Capital Markets & Advisory (HCMA) told Artemis that those are key areas where HCMA sees future opportunities as the industry begins to head into 2027.

Arbol, the technology-led underwriter of parametric risk transfer, climate, and weather re/insurance business, has designed a parametric product that aims to transfer the risk of government-imposed moratoriums on data center construction projects.

The full report is now available to download from Artemis’ 2026 Monte Carlo Rendezvous Executive Roundtable. The event featured leading insurance-linked securities and reinsurance market experts discussing investor sentiment, market conditions, pricing discipline and emerging opportunities across the catastrophe bond and ILS landscape.

A new joint analysis published by Swiss Re Institute and LSE has highlighted how artificial intelligence (AI) and supply chains are opening new pathways to systemic stress as risks become increasingly interconnected, which is driving a need for expanded capacity and leading them to highlight ILS as a crucial capital source.

With AI-driven infrastructure growth creating high levels of demand for catastrophe capacity within the re/insurance industry, Michael Stahel of LGT ILS Partners, has called out how alternative capital providers are well positioned to complement the needs that are being imposed onto traditional insurers and reinsurers amongst this build out.

Insurance-linked securities such as catastrophe bonds are seen as a complementary mechanism to help provide the necessary capital to transfer and fund the risks of large infrastructure projects in Asia, according to Lim Cheng Khai of the Monetary Authority of Singapore (MAS).

As cyber, data centres and artificial intelligence (AI) generate new material cumulations of risk, matching ILS capital to these emerging exposures requires the right fund structures to unlock investor capacity without compromising core portfolio value, Leadenhall Capital Partners CEO Luca Albertini highlighted to Artemis.

Urs Baertschi, Chief Executive Officer (CEO) of Property & Casualty (P&C) Reinsurance at Swiss Re emphasised that within today’s increasingly interconnected world, the reinsurer is supporting clients by creating risk awareness, risk prevention, and risk transfer.

As billions of dollars continue to flow into new infrastructure such as AI data centres, the re/insurance industry will be forced to rethink traditional approaches to risk modeling, according to Arbol’s Sid Jha, who emphasises that data-driven solutions will play a critical role in managing climate volatility and boosting resilience.

The global data centre build-out is creating unprecedented risk concentrations in natural disaster zones, and pushing traditional insurance capacity to its limits. Howden sees this as a prime opportunity for the capital markets, as catastrophe peak risk remains the foundations of the insurance-linked securities (ILS) asset class.