Data Center Cyber Claims Rank Second. The Larger Exposure Is Invisible.

Estimated reading time: 7 minutes

The number cyber underwriters need from Allianz Commercial’s new data center report sits on page 24. It is not fire.

Wilful acts, a category Allianz describes as “largely cyber crime related,” account for 19% of data center claims by number. Only water damage ranks higher, at 21%. Fire places third by frequency, at 14%.

Fire will take the headlines everywhere else. It drives 59% of claims value across the 221 claims Allianz analyzed, worth roughly €677m. That is the property story, and it is the correct one for property readers. The frequency table is the cyber story.

What Sits Inside The Wilful Acts Category

Allianz does not publish the split. The category holds crime and cybercrime together. Christian Kolbe, global head of construction claims, separately describes claims involving theft of materials from temporary storage, construction sites and transit. Physical theft and network intrusion share a bucket. The 19% is a ceiling on cyber frequency rather than a measurement of it.

The report also gives no time period for the 221 claims. That gap matters more than it first appears. A dataset reaching back a decade would tilt toward physical theft during earlier construction phases. A recent dataset would tilt toward the current build boom, and toward construction-phase losses again. Both readings move the cyber share, and neither can be tested from what Allianz published. The period and the split are both worth requesting.

Water Damage Leads Data Center Insurance Claims

Water tops the frequency table at 21%. It ranks only fifth by severity, which marks it as an attritional driver rather than a catastrophe driver.

The public argument about data centers and water concerns consumption. US facilities used around 80bn liters in 2025. That figure is projected to pass 167bn by 2030. Communities and regulators are focused on water going in.

The claims argument runs the other way. Allianz attributes leaks mainly to cooling and fire suppression systems. The water that damages a data center is largely water the building brought inside on purpose. The old rule about water and electricity still holds. Liquid cooling now brings the two closer together than any previous generation of facility.

Fire suppression carries its own version of the problem. “Aspirating smoke detectors (designed for microscopic particle detection)” can trigger false alarms from dust, condensation, or construction debris. The result is an accidental gas dump. Contamination and humidity from a mistaken discharge can shorten server life and cause hardware failure. The system meant to protect the asset damages it instead.

How Data Center Accumulation Risk Builds Across Layers

Stefan Zink, global property industry lead for telecoms and data, sets out the structure. Accumulation arises when multiple insured interests converge in one physical or operational space. Operators, tenants, live construction, and supporting utilities all sit on the same site. The risk builds in layers.

“With a hyperscaler, accumulation risk arises when multiple insured interests converge in one physical or operational space. You have the operators, multiple tenants, ongoing construction, and supporting utilities, all concentrated in one location. This risk builds across layers,” said Zink.

Allianz maps a ladder to match. Traditional facilities are manageable and well understood. Edge sites carry less redundancy and localized risk. Colocation brings higher aggregation and interdependency. Hyperscale campuses get labeled critical infrastructure with systemic exposures.

One caution on how to read this. The claims analysis counts losses by cause and by line of business. It does not count how many single events triggered several policies at once. The accumulation argument comes from Allianz underwriters and case studies, not from the loss set. Treat it as informed judgment rather than as a finding.

The Building Management System Problem

Allianz makes the sharpest point of the report in a single sidebar. Shared infrastructure means an attack on building management systems or servers can harm many tenants at once. The liability claims that follow run across all of them.

That describes cyber acting as an accumulation mechanism rather than as one peril among several. One intrusion. Many claimants. No physical damage required. At a facility built to serve dozens of tenants, the claim count scales with the tenant list.

What The Claims Data Cannot See

Allianz analyzed a property, construction, and financial lines book. It counts cyber where cyber caused the loss.

Most cyber exposure to data centers works differently. A fire, a chiller failure, a power surge, or a flood hits the facility. The operator claims on property and business interruption. Tenants and their downstream customers then claim contingent business interruption and system failure on cyber policies held elsewhere, with other carriers, in other books.

None of that appears in the 221 claims. Different insureds, different lines, different insurers. The dataset structurally cannot see it.

Kolbe comes closest to naming the gap. He says, “Data center operators can pay significant contractual penalties arising from downtime, which might not be covered by traditional property insurance.” Service level agreement credits compound it. Allianz notes those credits become a significant expense when one outage affects many customers simultaneously.

Precedent exists. British Airways’ 2017 outage cost an estimated £80m and produced litigation against facilities manager CBRE. A court ordered OVHcloud to pay €250,000 to customers after its 2021 Strasbourg fire, finding the company had failed to deliver promised backup.

What Underwriters Should Take From Data Center Cyber Claims

The market is already building for the exposure Allianz describes. AIG launched a parametric cloud outage product on August 13, one day after this report appeared. It runs on Parametrix monitoring with a two-hour waiting period and no retention afterward. The instrument pays on downtime rather than damage.

Correlation is the underlying problem. This publication reported Silent Push research this month arguing that shared cloud dependency converts isolated claims into correlated ones across an entire book. Allianz reaches the same place from the property side. Parametrix put the CrowdStrike outage at $5.4bn for US Fortune 500 companies alone, which is the shape of a correlated event.

Volume alone is not the argument. More facilities produce more claims, and no underwriter needs telling. The rate argument carries more weight. Each new campus concentrates more value than the last. Lithium-ion cells now sit inside server racks rather than separate rooms. Multi-story designs let smoke travel through risers and vents. Prototypical turbines and second-hand equipment go in under compressed schedules. Testing and commissioning, which Allianz calls one of the highest-risk phases in the build, is running at record volume right now.

The risk profile is changing. The claim count is only the visible part. Munich Re flagged the same exposures this year across system failure, contingent business interruption, and data restoration.

FAQ – Data Center Cyber Claims

What share of data center claims involve cyber crime?

Allianz places wilful acts second by frequency at 19 percent, behind water damage at 21 percent. The category combines physical crime and cyber crime, and Allianz does not publish the split. Treat 19 percent as an upper bound on cyber frequency rather than a measurement.

Why does the missing time period matter?

Allianz gives no date range for the 221 claims analyzed. An older dataset would weight toward physical theft on construction sites. A recent one would weight toward the current build boom. Both change the cyber share, and readers cannot tell which applies.

What is data center accumulation risk?

It describes multiple insured interests sitting in one location. Operators, tenants, live construction and supporting utilities share a campus. One event can trigger property, construction, business interruption, liability, cyber and financial lines claims at the same time.

Why is water damage the most frequent cause of loss?

Leaks come mainly from cooling and fire suppression systems inside the building. Flooding also threatens basements and stored equipment. Water leads by frequency but ranks fifth by severity, making it an attritional driver rather than a catastrophe one.

Where does cyber insurance exposure sit that this data misses?

Allianz analyzed a property, construction and financial lines book. Contingent business interruption and system failure claims filed by tenants and downstream customers sit on cyber policies with other carriers. Those losses do not appear in the dataset at all.

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