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.
According to Howden’s new report, in the US, a significant number of major data centre hubs are located in areas highly exposed to extreme weather, while on a global scale, more digital infrastructure is being developed in areas affected by armed conflict.
“In the US, a significant number of major data centre hubs are located in areas highly exposed to extreme weather, while globally more digital infrastructure is being developed in areas affected by armed conflict. In addition, the fast pace of development is contributing to a sharp rise in legal disputes globally,” Howden said.
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