At a glance
Organisation: A joint venture between a global data centre developer and a major Japanese energy company
The challenge: Design a scalable insurance programme for a major data centre development with multiple facilities, significant earthquake exposure and stringent project-finance requirements.
Willis solution: A global insurance programme supported by seismic modelling, delay-in-start-up analysis, and advanced analytics which helped the company optimise its total cost of risk.
The impact: A lender-aligned insurance placement with 20% in cost savings compared with the company’s first development, and a repeatable insurance blueprint for future projects.
The data centre challenge
Data centres are the beating heart of the digital economy and powering businesses of tomorrow. With significant seismic exposure in Japan, data centres are built using advanced seismic isolation technology designed to withstand major earthquakes without interrupting operations. A major seismic event could disrupt construction or operations, damage buildings and critical equipment, delay completion and affect the company’s ability to meet commitments to customers and lenders.
To secure financing and advance its expansion plans in Japan, the company needed an insurance programme that can protect the data centre against significant earthquake exposure, met stringent lender’s insurance requirements and aligned with its global headquarters’ risk management standards. The programme also needed to optimise the total cost of risk and provide a scalable model for future facilities and long-term growth.
A tailored specialty and risk advisory solution
Willis delivered a technically robust and lender-compliant insurance structure that balanced seismic exposure, financing requirements and the company’s global risk management standards.
- Reduce operational disruption
A single, coordinated insurance programme is designed for the owner and participating contractors. This provided greater oversight and consistent protection across the development while reducing potential coverage gaps. Tailored to the risks of a large-scale data centre project, the programme included Construction All Risks (CAR) cover for physical loss or damage during construction, Third-Party Liability (TPL) cover for injury or property damage involving others, and Delay in Start-Up (DSU) cover for specified financial losses if insured damage delayed commercial operations. A structured contractor onboarding process also simplified administration and created a scalable insurance model for future facilities.
- Mitigate financial risks
To help the company understand the scale of potential earthquake losses, we evaluated the Probable Maximum Loss (PML) and Estimated Maximum Loss (EML) for the data centre. A Delay in Start-Up (DSU) scenario analysis is also conducted to test the financial impact of a severe event delaying completion and commercial operations. These insights gave the company and its lenders a clearer view of the project’s exposure, helping to set appropriate insurance limits and deductibles, strengthen financing discussions and support more informed risk-management decisions.
- Boost operational resilience, cost efficiency and competitive advantage
Output from the risk analysis demonstrated the data centre’s earthquake resilience and provide Japanese insurers with robust evidence of the project’s exposure and risk controls. This supported the company’s engagement with its lender’s insurance adviser on appropriate indemnity periods, limits and deductibles, while helping domestic insurers commit the local capacity required. Willis also coordinated the international reinsurance support to supplement that capacity, creating a competitive, lender-aligned placement that balanced earthquake protection with the client’s objective of optimising its total cost of risk.
This resulted in a 20% cost savings for the company compared with its first data centre development in Japan, an outcome that was particularly well received amid the continued rise in overall construction costs.
The project also delivered a repeatable insurance blueprint for future developments. This approach provides a consistent framework for risk analysis, lender engagement, market coordination and programme governance as the company expands its data centre sites in Japan.
By putting the company’s objectives at the centre of a specialised risk management strategy, Willis redefined how complex data centre risks could be managed across the project lifecycle. Combining local market insight, global specialty expertise and advanced analytics, the approach strengthened the protection of critical digital infrastructure, supported financing requirements and created a scalable foundation for the company’s continued growth of its data centre facilities in Japan.
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