The surge in construction and operation of artificial intelligence data centers is straining the property and casualty (P&C) insurance market, according to American International Group Inc. CEO Eric Andersen. The scale and complexity of these facilities demand comprehensive coverage—from project financing to cyber, property, and liability insurance—placing unprecedented pressure on insurers’ underwriting limits.
Andersen highlighted that AI data centers require a broad spectrum of insurance products, covering everything from the construction phase through ongoing operations. This multifaceted demand is pushing the P&C insurance industry close to its maximum capacity. AIG, which offers specialized products across all these insurance sectors, is engaged throughout the entire data center lifecycle, including providing coverage for power suppliers.
The increasing demand for insurance tied to the burgeoning AI infrastructure sector represents a notable growth avenue, as noted by S&P Global Ratings. Despite the challenges, AIG has reported financial results exceeding expectations shortly after Andersen’s appointment as CEO. Andersen, formerly president of global broker Aon Plc, took the helm following his predecessor’s strategic overhaul that reversed years of underwriting losses and streamlined the company’s portfolio.
Beyond traditional insurance products, AIG is actively exploring artificial intelligence applications to enhance internal operations, particularly in areas like underwriting and claims review. This initiative reflects the insurer’s efforts to integrate digital tools to improve efficiency and risk assessment as the AI sector continues to evolve.
Since Andersen’s appointment, AIG shares have declined year-to-date, contrasting with gains in the broader KBW Insurance Index, underscoring market uncertainties despite operational progress. The ongoing AI data center boom continues to reshape risks and opportunities in the insurance industry, highlighting the critical role of tailored P&C coverage in supporting this high-tech infrastructure expansion.