Marsh Stratus

Marsh is launching a $10 billion property insurance exchange named Stratus to bring alternative sources of insurance and reinsurance capital into the digital infrastructure risk transfer sector. The exchange will offer access to up to $10 billion in property insurance capacity on a single-placement basis, targeted at the complex operational risks of digital infrastructure projects, including data centers and related critical support systems.

Introduction to Stratus

Stratus is designed as an insurance exchange where capacity providers can evaluate risks and express their appetite for underwriting them. Marsh has already lined up 30 traditional and alternative capital provider participants to evaluate each risk individually through Stratus, to identify the most appropriate support for each placement. This more structured trading environment enables providers to better assess, quantify, and diversify risk and address aggregation concerns, which arise during the operational phase of digital infrastructure projects.

Market Context

The global data centre insurance market is projected to grow from around $11 billion to more than $24 billion by 2030, according to insurer Allianz Commercial. With numerous senior industry leaders commenting that capacity may be insufficient to support all the data centre builds expected to come online over the next few years, the insurance-linked securities market is seen as a viable source of incremental reinsurance capacity to support this. For more information on the data centre risk transfer opportunity for ILS, visit our stats page and review our standings on the topic.

Stratus Features

Stratus will make use of Marsh’s advanced data and analytics and advisory services, so the broker can help its clients to efficiently source customized property insurance coverage for the unique needs of these large facilities, as their digital infrastructure assets move towards operation. As large digital infrastructure projects shift from construction to operation, the associated risks become larger and more complex, driven by multi-billion-dollar campuses, self-generating power systems, and emerging technologies used in processing units and critical equipment. Joe Macejak, US Property Digital Infrastructure Leader, Marsh Risk, explained that by combining Marsh’s engineering data and analytics, risk consulting capabilities, and access to the global (re)insurance and capital markets, Stratus is designed to improve the quality and efficiency of operational digital infrastructure property placements and help clients secure the protection they need to support growth at scale. For more information on related topics, check our injuries page and explore our squad page.

Future Plans

Stratus is designed to work alongside Marsh’s Nimbus facility for data center risks, with the two able to be utilized separately or together to support capacity needs of projects. The plan for Stratus is to start with digital infrastructure property risks first, but then evolve the exchange to also support other line of business capacity needs, such as inland marine, cyber, and casualty, Marsh said. As the exchange develops, it will be interesting to see how it impacts the fixtures of the digital infrastructure risk transfer market.