The rapid expansion of data centres in the Asia Pacific (APAC) region is presenting a complex array of risks, according to a new report by global insurance broker Howden. The report, titled “Insuring the data centre supercycle: Six critical areas of interconnected risk, from construction to conflict,” highlights the challenges posed by increased power demand, construction risks, and cyber threats as the sector grows.
Howden’s research reveals that the APAC region constructed approximately 66 million square feet of new data centre space in 2025, with construction volumes growing at a compound annual growth rate of 18% from 2016 to 2025. This expansion has concentrated risks at fewer, larger sites, increasing the potential for significant business disruptions.
The surge in data centre construction is straining power grids across the region, with power consumption increasing at a 47% annual growth rate over the same period. To address this, many new hyperscale campuses are being designed to generate their own power, altering the risk landscape for insurers.
Despite nearly universal redundancy in APAC data centres, outages remain a concern, often due to system failures unrelated to physical damage. This has led to the development of new insurance solutions, such as parametric cover, to address these challenges.
Zoe Zhang, Regional Director of Digital Infrastructure Practice at Howden, emphasised the importance of an integrated approach to risk management, stating, “Data centre operators and investors across the region may benefit from specialist advice and tailored risk transfer solutions to match the pace of this exponential growth.”
As the APAC data centre sector continues to expand, the need for comprehensive insurance coverage that addresses the unique risks of construction, operation, and cyber exposure becomes increasingly critical.
