More than half of planned US data center projects, representing nearly USD 800 billion in investment, are being developed in states highly exposed to natural catastrophes, with over USD 600 billion of that total concentrated in regions at elevated risk from severe convective storms, according to new research from specialty Lloyd's insurer MS Amlin.

The Scale of Exposure

MS Amlin's analysis examined more than 670 data center projects either under construction or in planned development across the United States. Of those, 320 facilities, roughly half the total, are situated in states classified as high risk for severe convective storms, a category encompassing tornadoes, large hail, and damaging winds.

The planned investment value associated with those 320 projects stands at USD 670 billion. The research found that existing data centers in high-risk severe convective storm states are currently valued at almost USD 20 billion.

That figure means future AI infrastructure planned for storm-exposed regions could represent nearly 40 times the value of facilities already in place, a gap that underscores the pace and concentration of new development.

Beyond storm risk, the broader picture across all major natural catastrophe categories is striking.

Some 27% of planned data centers, representing USD 440 billion in investment, are in states at high risk of winter storms, which can disrupt power networks and generate complex business interruption exposures.

Nearly a quarter of planned facilities, 21%, amounting to USD 340 billion, are in states at high risk of hurricanes. Data centers in high-risk earthquake states account for 3% of planned projects and USD 12 billion in value.

Why Development Is Heading South

The findings reflect a broader shift in where new hyperscale facilities are being built. According to MS Amlin, the development of new data center capacity is increasingly moving toward southern regions of the United States, where land availability and access to power are more favorable.

That geographic shift, while commercially rational, is placing an expanding share of digital infrastructure in areas with historically higher exposure to severe weather events.

Severe convective storms have become one of the most significant drivers of insured losses in the United States.

Last year, such events generated USD 52 billion in insured losses in the US alone, making the country the costliest region globally for this particular peril.

Swiss Re data cited in the MS Amlin research shows that insured losses from severe convective storms have grown at approximately 8% per year since 2008.

Aggregation Risk and the Insurance Challenge

For the insurance industry, the concentration of data center investment in hazard-prone regions raises a specific and technically complex problem: aggregation risk.

Data centers are typically insured across multiple lines of business simultaneously, including property, cyber, and credit and political risk coverage.

Without careful oversight, MS Amlin warns, insurers can unknowingly accumulate exposure to the same facility or cluster of facilities through separate policies across different business lines.

Martin Burke, MS Amlin's Chief Underwriting Officer, described the situation as presenting both commercial opportunity and material risk.

"These numbers highlight both the opportunity and the risk. Hundreds of billions of dollars of new digital infrastructure are being directed towards regions at higher risk of potentially destructive severe convective storms. When assets of this scale cluster in hazard-prone regions, the potential loss severity from a single storm event can rise very quickly.

This is a growth opportunity for the specialty insurance market, but the risks must be properly managed and understood," Burke said.

Burke also flagged the broader systemic implications of the industry's response. "As AI investment accelerates, insurers must adopt more advanced ways to manage aggregation risk. If the industry is slow to address this challenge, it could restrict the deployment of capital and roll out of AI infrastructure," he said.

MS Amlin's Proprietary Database Response

To manage its own exposure, MS Amlin has developed a proprietary aggregation monitoring database designed to track data center exposures across its underwriting portfolios and lines of business.

The insurer describes the tool as an industry-leading system capable of capturing risk not only from clusters of data center facilities but also from the supporting infrastructure tied to those facilities, including power generation assets.

Burke outlined the practical function of the database: "Our proprietary database of hundreds of US data center projects lets us capture the risk not just from tightly clustered facilities but also from supporting infrastructure like power generation.

This provides a far more accurate picture of overall exposure. This visibility allows us to deploy capacity responsibly to support the sector's growth while maintaining underwriting discipline."

The insurer said the ability to monitor aggregation risk is becoming increasingly important as data center insurance continues to grow as a class of business, with the acceleration of artificial intelligence investment adding further urgency to the challenge of understanding and managing large, geographically concentrated digital asset exposures.