AI data center boom is 'maxing out' P&C insurers, AIG CEO says

(Bloomberg) --American International Group Inc. Chief Executive Officer Eric Andersen said that while the artificial intelligence buildout presents a "great opportunity" for the insurance industry, it's also pushing property and casualty providers to their limits.

AI data centers "need everything from project finance all the way through to operations," he told Bloomberg TV on Tuesday. "That's construction, that's cyber, that's property, that's liability."

AIG has a competitive advantage because it offers products in all of these areas, he said. "But it is absolutely maxing out the P&C insurance industry in terms of the limits that are required," Andersen added.

Skyrocketing demand for insurance coverage tied to data center construction is creating a growth opportunity for the industry, according to S&P Global Ratings. AIG is involved in several parts of the construction process and also provides insurance to power providers, Andersen said.

The insurer reported second-quarter results last week that surpassed Wall Street expectations, about two months after Andersen took over as CEO. Andersen joined AIG from global insurance broker Aon Plc, where he was most recently president.

The new CEO inherited a strong business after his predecessor Peter Zaffino oversaw a dramatic turnaround, pruning its portfolio and reversing years of large underwriting losses.

AIG is also taking a close look at using artificial intelligence to streamline company operations, focusing on its underwriting business and the claim reviewing process. 

Shares of AIG were down 9.3% year-to-date through Monday, while the KBW Insurance Index was up 8.9%.