As demand for data centre insurance surges, Gordon Longley, global head of speciality, McGill and Partners says the London market is once again proving its capacity for bold, innovative broking and underwriting, and terrorism cover is emerging as the thread that holds it all together.

As insurers wrestle with the challenge of sustaining premium growth amid softening rates, the sudden and substantial demand for data centre insurance has emerged as a timely opportunity. Yet the complexity of these risks is frequently underestimated and it is precisely in that complexity that both the challenge and the opportunity lie.

The term ‘data centre’ is deceptively simple for what are, in reality, highly complex, multi-class exposures spanning construction, cargo, operational property and beyond. There is no single insurance product that can adequately respond to every stage of a data centre’s lifecycle. Each exposure demands a tailored solution, specialist expertise and careful coordination across classes.

There is, however, one notable exception. Unlike other lines, terrorism coverage has the unique ability to sit across multiple phases of a data centre’s life, from build-out to steady-state operations, providing a single, coherent layer of protection. In a risk profile defined by fragmentation, terrorism cover offers rare continuity.

The London market has long been the global centre for underwriting innovation. When other markets hesitate, London tends to act. This instinct was evident in the immediate aftermath of the September 11th attacks, when viable terrorism coverage was developed at speed in response to an urgent global need. That spirit of responding quickly in the face of immediate adversity has continued, and more recently demonstrated again through the creation of specialist war risk facilities in response to the conflict in Ukraine –  structures that have since been renewed and sustained as the need has persisted. These are not isolated moments. They reflect a culture of client-led problem-solving that continues to define London at its best.

Today, that same approach is being applied to data centres. The London terrorism market has moved quickly to deliver meaningful, scalable capacity for this sector. At McGill and Partners we recently secured $2 billion of terrorism limit for a data centre client, following the terms of the All-Risks Property policy. Importantly, the structure attracted strong underwriting appetite, with capacity available well beyond the required limit.

We have also structured deals for US Data Centre clients which utilise their existing captive vehicles to access cover for certified terrorism limits in excess of $5 billion.

A key driver of this appetite is the non-accumulating nature of data centre terrorism exposures, unlike property catastrophe risks. For underwriters managing aggregate exposure, that profile is inherently attractive.

Delivering effective solutions for complex data centre risks requires genuine collaboration across disciplines – not siloed placements. Bringing together specialists across a variety of classes of business, including property, construction, cargo, credit and terrorism, makes it possible to structure coherent programmes that reflect the full risk profile though out the life of a data centre asset. That kind of cross-class coordination, where expertise is shared in genuine pursuit of client outcomes, is essential when dealing with risks of this scale and complexity.

The global data centre sector continues to expand at pace, driven by demand for cloud infrastructure, AI computing and digital connectivity. As these assets develop and become more critical, their insurance requirements will become more sophisticated — and, admittedly, more challenging.

As with the war risk structures developed since 2022 for Ukraine, the London market’s willingness to engage with difficult risks at scale is once again evident in the wake of conflict in the Middle East. The capacity exists. For clients with data centre exposures seeking certainty of cover, the London market –  which has proved its adaptability and expertise time and again –  remains open for business.