A new report from First Street found that 79% of global data center capacity is exposed to elevated acute climate hazards, including flooding, wind events, and wildfires. The research examined 97 data center markets worldwide and concluded that climate risk is increasingly influencing infrastructure reliability, operating costs, insurance availability, financing conditions, and long-term asset values.
The findings arrive as insurers, reinsurers, and rating agencies identify data centers as a growing business opportunity. Recent industry assessments from S&P Global Ratings, Moody’s Ratings, and AM Best have pointed to increasing demand for specialized coverage as data center construction expands globally. First Street noted that capacity is expected to nearly double by 2030, placing more critical infrastructure in locations vulnerable to climate-related hazards.
For claims professionals, the report underscores the likelihood of more weather-related losses involving highly complex facilities. Data centers depend on uninterrupted power, cooling systems, and network connectivity. Damage from flooding, severe storms, wildfires, or extreme heat can trigger costly property claims, equipment breakdown losses, business interruption claims, and disputes over downtime-related damages.
The report also found that 54% of global data center capacity faces chronic climate stress from extreme heat and drought. These conditions can increase cooling costs, strain water resources, and reduce operational efficiency over time. Regional exposure varies considerably, with Asia-Pacific showing the highest concentration of climate-exposed capacity.
First Street identified several major growth markets, including Northern Virginia, Johor, and Marseille, among the world’s most climate-exposed data center hubs. The findings suggest that climate modeling and forward-looking risk assessment will play an increasingly important role in underwriting, valuation, and claims management as insurers adapt to changing environmental conditions.
For adjusters and risk professionals, the report highlights a growing need to understand both direct physical damage exposures and the secondary operational impacts that can result when critical digital infrastructure is disrupted by severe weather or long-term climate stress.
