Korea builds 18.4 GW AI hubs, insurers unsure
South Korea’s plan to add 18.4 GW of AI data centre capacity by 2035 is prompting insurers to rethink how they price and underwrite the new facilities, which differ markedly from traditional data centres.
Scale of the expansion and its financial weight
The government’s roadmap calls for an initial 8.4 GW of AI‑focused facilities by 2029, representing roughly KRW 550 trillion in investment. The full target of 18.4 GW could push total spending beyond KRW 1,000 trillion. Such figures are comparable to the construction costs of single megaprojects that sometimes exceed $20 billion.
These numbers are attracting attention from both local and global insurers. Swiss Re Institute projects that worldwide premiums for data centre coverage could more than double, rising from $10.6 billion to $24.2 billion by 2030. The growth reflects not only larger projects but also the higher value of equipment such as GPUs and the added complexity of liquid cooling and battery storage.
Insurers seek new guidelines
Domestic insurers are already moving to address the emerging risk profile. Samsung Fire & Marine Insurance is drafting AI data centre risk‑assessment guidelines with external experts, aiming for a release in the second half of 2026. Hyundai Marine & Fire Insurance and Hanwha General Insurance are also reviewing their market approaches.
In July, the Korea Fire Protection Association hosted a data centre risk‑management seminar attended by representatives from 11 non‑life insurers, including the three firms mentioned above. The session focused on underwriting challenges and claims handling for modern facilities.
For brokers, clearer underwriting standards could shift the timing of engineering assessments. Rather than waiting until a placement is nearly finalized, insurers may require specialist input at the submission stage to satisfy lender demands for full coverage.
One cautious observation: if insurers continue to rely on limited loss experience, the cost of coverage could rise faster than the market anticipates, potentially squeezing project margins and slowing the rollout of AI infrastructure.
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International capacity is also expanding. Aon increased its Data Centre Lifecycle Insurance Program to $5 billion in July, after an earlier boost to $3.5 billion. Marsh’s Nimbus facility now offers up to $2.7 billion in limits for major construction projects across several continents.
These programs bundle construction‑all‑risks, delay‑in‑start‑up, property damage, business interruption, cyber, and other exposures. Yet the overlapping nature of AI data centre assets—shared power, cooling, and fire‑protection systems—means a single incident can trigger multiple claims across different policies.
Swiss Re’s data highlight the shift in loss drivers. While fire events account for only about 11 % of data centre loss incidents, they represent 42 % of loss costs. Liquid‑related issues contribute nearly a quarter of costs, and power supply problems are behind 45 % of outages, according to the Uptime Institute.
These figures suggest that traditional risk models, which focus on frequency, may underestimate the financial impact of high‑severity events in AI‑centric facilities.
The market watches closely.
Overall, the combination of massive investment, novel technology, and limited claims history is changing the insurance environment in South Korea. Brokers and insurers alike must adapt quickly to ensure that coverage keeps pace with the country’s ambitious AI data centre ambitions.
