FM boosts data centre cover with USD $5bn capacity

Commercial property insurer FM has increased the insurance capacity available to customers of its FM Intellium unit, with limits of up to USD $5 billion for data centre and related power generation risks.

The company said the higher limit applies to its global FM Intellium clients and reflects demand from the data centre market. FM positioned the move as a response to growth in digital infrastructure and the associated risk profile for large facilities and campuses.

FM launched FM Intellium last year. The unit focuses on companies linked to technology-driven infrastructure, including data centres and energy assets connected to the sector.

Higher limits

FM said it can now provide capacity of up to USD $5 billion for the industry. The insurer described the increased capacity as the largest currently serving the data centre sector.

The company linked the change to its engineering-led approach and its history as a mutual insurer. FM said it has nearly 200 years of experience working with large industrial and commercial businesses.

FM also set out the scale of its existing data centre portfolio. It said it has insured data centres for more than 25 years. It said it currently protects about 1,100 data centres. It put the insurable value represented by those sites at about USD $250 billion.

The data centre insurance market has faced rising scrutiny in recent years. Operators have expanded footprint and density. Many facilities also carry concentrated exposures from equipment, cooling systems, fire protection, and the continuity requirements of customers. The sector also depends on stable power supply and backup generation.

FM linked the FM Intellium offering to the growth of artificial intelligence and cloud computing. It also referenced the power generation needs associated with those technologies.

Leadership

FM appointed Christopher Dempsey as Senior Vice President, FM Intellium in October. He leads the unit and works on the needs of existing and future data centre clients, according to the company.

FM identified risk engineering as a central element in its approach for the segment. It said its engineering expertise underpins the larger line size it now offers.

Malcolm Roberts, Chairman and Chief Executive Officer of FM, said: "For almost two centuries, FM has partnered with clients in growing industries to help them navigate emerging risks and prevent losses before they happen."

Roberts said: "Through our unique engineering- and research-led approach to protecting our clients-combined with our innovative solutions and substantial capacity-FM is again leading the way by supporting the data center industry as it grows."

FM placed the announcement in the context of continuing build-out of digital infrastructure. Operators, suppliers and their financiers have sought larger insurance limits for individual sites and multi-site programmes. Several projects have also moved towards larger campuses with substantial replacement values.

Demand for capacity has increased alongside that expansion, particularly for property damage and business interruption cover. Insurers have also examined their aggregate exposures where multiple large sites sit in the same region and share common hazard profiles.

Data centre demand

Dempsey linked the increased capacity to the market outlook for data centres and associated infrastructure.

"We are proud to bring this significant increase in capacity to support our data center clients," said Christopher Dempsey, Senior Vice President, FM Intellium, FM.

"We believe demand for digital infrastructure will only increase as AI and cloud computing continue to grow, and insurers must keep pace to ensure this critical industry remains resilient and operational for the communities and businesses it serves," said Dempsey.

FM said it will continue to work with data centre clients internationally as they expand facilities and review risk mitigation measures alongside insurance purchasing.