During the thick of the recession many expected that credit insurers would have a hard time staying afloat with the sudden increase in reinsurance premiums that were an after effect from the recession. In fact, during the 2009 renewal season many brokers saw major credit insurers try to lessen their own risks by choosing to pass through Lloyds of London or other similar markets. Even today Lloyds is still feeling the after effects of this change as their increases were much higher than they expected and even though the company almost found itself bankrupt during the nineties, they are now pulling ahead stronger than ever.
In fact, the company seems to be more than stable as it continues to increase its hold on other regions of the world moving a few years ago into new regions such as Brazil. This move was significant given the fact that Brazil is thought to be one of the top growing economies in the world right now and is actually a very low risk area when compared to other areas such as the hurricane epicentre that is known as the Gulf of Mexico. In other words, there is not a great deal of threat to Brazil both in terms of political unrest and natural disasters.
Lloyds also expanded into China over the last few years after it received its official licence to trade within the country allowing them to write reinsurance business over about 90% of the Chinese market, which opened up their doors and the potential for underwriting home grown Chinese insurers who were interested. Given the fact that losses can occur just about anywhere for reasons that cannot be predicted, whether it be an economic recession, political unrest, or as mentioned natural disasters, by spreading the risk of insurance around the world then losses can be offset when they occur unpredictably.
This is one reason why the reinsurance market can be a great way to buy into a little peace of mind because with the right insurance and the right premium, you can rest assured that your investment and money will be well guarded.