AI developers turn to insurers for data-centre capital, FT editor says

Artificial intelligence developers are increasingly turning to insurers to fund data centres and chip plants, Antoine Gara of the Financial Times said on a webinar about the changing insurance industry. Royal Gazette Bermuda Re reported his remarks.

Gara, the FT's US private equity and deals editor, described "a lot of innovation to come up with structures to raise investment-grade debt and attract insurance money", adding that this "has been key to unlocking trillions of dollars". The distinction matters: the innovation sits in the structuring, not in any single instrument the panel named.

The underwriting picture is less settled. Greg Crawford, managing editor of P&C Specialist, said some insurers are still working out what they are covering on AI data centres: "Is it business insurance or the development of it?"

Crawford pointed to Arbol, a New York-based specialty managing general agency that has just launched parametric coverage for delays in data centre construction. "I have not seen anything like that before," he said.

He described commercial insurance as broadly softening, with prices largely declining and plenty of capacity in both primary and reinsurance. Cyber and data-centre coverage runs the other way: demand is high, capacity thinner, and cyber prices keep rising.

Crawford said many insurers are tremendously profitable. Chubb reported third-quarter net income of $2.84 billion and earnings per share of $7.30, up 4.4 per cent on the same period a year earlier, according to the report. Some metrics missed expectations, Crawford said, but earnings per share "pretty much blew the Street out of the water".

Chubb chief executive Evan Greenberg used the prior day's earnings call to warn about "naive capital" hungry for returns, Crawford said. He said many executives share the worry that some firms will take more naive risks: "That could spoil the party for everyone."