The region’s data centre pipeline reached a record 26.5 gigawatts in the first half.
Asia’s data centre expansion is increasing demand for power infrastructure and insurance, raising the question of whether the growth will eventually reverse a 5% decline in regional insurance rates.
“AI and data centre growth are making reliable power a strategic asset across Asia,” Lyo Foo, head of Power, Natural Resources Asia at Willis Towers Watson Plc, said in a September report.
Asia’s data centre development pipeline reached a record 26.5 gigawatts in the first half of 2026, with Southeast Asia accounting for about half of capacity under construction, according to Willis.
The expansion is increasing investment in power generation, grids, energy storage, and on-site power systems as operators seek reliable electricity for big data centres.
Foo said the concentration of power demand also means insurers must consider how problems with electricity generation, grids, cooling, water, cyber systems, and supply chains could combine to interrupt data centre operations.
Yet greater demand for power infrastructure has not tightened the region’s insurance market.
Asia’s power insurance market remained highly competitive in the first half as strong insurer profits and ample reinsurance capacity encouraged companies to compete for business, Willis said.
International and regional insurers continued to offer capacity, whilst increased participation by Middle Eastern insurers added competition.
The trend reflects falling insurance rates across Asia. Overall commercial insurance rates in Asia fell 5% in the second quarter, matching the decline in each of the previous four quarters, according to Marsh LLC.
Global insurance rates fell 6% in the quarter, marking an eighth straight quarterly decline.
“The outlook for the second half of 2026 remains positive,” Foo said. “Asia’s power insurance market remains exceptionally competitive.”
Insurers seeking to maintain premium income and gain market share are helping shape the prices and terms companies receive when renewing coverage, he added.
The question is whether rapid investment in data centres and the power infrastructure supporting them will eventually absorb enough insurance capacity to change that balance.
Questions to ponder:
- Can data centre growth eventually push Asia’s power insurance rates higher?
- Will additional insurance capacity keep rates falling despite greater demand?
- How will increasingly connected power and data centre risks change how insurers price coverage?