AI data centre risk is becoming a capital allocation problem. A board can approve a major campus and still have an incomplete answer to the first-loss question. The exposure does not sit in one place.
It may sit with the operating company, the captive, insurers, reinsurers, ILS investors, a parametric provider, lenders, contractors, tenants or shareholders.
Often, it sits with several of them, all at once.
Read full article here: https://lnkd.in/enDNy7W3

The project may have land, power, tenants, banks, advisers and a large insurance tower.
That still does not answer the capital questions:
– Who pays first?
– Who pays next?
– Who pays late?
– Who disputes?
– Who never pays?

For CFOs, this is where data centre insurance becomes a liquidity issue.

A large programme can still leave hard gaps:
– non-damage outage
– cooling failure
– delayed commissioning
– tenant service credits
– off-premises power failure
– claims timing
– basis risk
– captive capital strain

The useful board paper is a loss-layer paper to include:

Deductible. Retention. Captive. Primary. Excess. Reinsurance. Parametric. ILS. Uninsured exposure.

Each layer needs an owner.

I wrote this The Business of Resilience article on why data centre risk is becoming a layer-allocation problem, and why the first USD5bn question belongs in the board pack.

Read the full article:
https://lnkd.in/ed8mn8PD