Banks Turn to Insurers for AI Loans

Banks providing loans to artificial intelligence data centers have begun transferring their risks to insurance companies in the face of rising borrowing demand. In some projects, 20 to 50 percent of the risk is transferred to insurers, while premiums paid are reported to reach up to 70 percent of the loan income for which protection is provided. This move by banks reflects the risk management need arising from the rapid growth of loans for artificial intelligence infrastructure. Insurance companies are easing banks' balance sheet capacity by assuming a portion of the credit risk. Experts draw attention to the high ratio of premiums to loan income, emphasizing that this cost could be reflected in loan pricing and may put pressure on banks' profitability. On the other hand, it is stated that risk transfer can help preserve banks' appetite for new lending. While financing for artificial intelligence data centers is expected to increase in the coming period, the role of the insurance sector in this area is projected to expand. This cooperation between banks and insurance companies is seen as a search for a new balance in the financing of technology investments. Not investment advice.