London's credit and political risk insurance market has been growing its global footprint at the same time as Lloyd's underwriters are pressing regulators to recognise non-payment insurance as an effective credit risk mitigant under the Basel frameworks - a regulatory outcome that would make the product substantially more attractive to multilateral development banks as a balance sheet tool. The Texel Group's memorandum of understanding with the Islamic Corporation for the Development of the Private Sector, signed in Baku on June 19, is a concrete example of both trends in practice.
The Lloyd's market wrote $1.75 billion of equity political risk insurance capacity this year, up from $1.49 billion in 2024, within a total market of nearly $4 billion, according to Marsh Specialty data. The London market as a whole grew its share of the global commercial insurance and reinsurance market to 8.7% in 2024, up from 8.2% in 2022, contributing £61 billion to UK GDP, according to the London Market Group. The Lloyd's Market Association's Political Risks, Credit and Financial Contingencies Committee has been reviewing global banking rules to advocate for credit insurance receiving favourable capital treatment - specifically, recognition as an effective credit risk mitigant that reduces the capital institutions must hold against insured exposures. For a multilateral development bank such as ICD, that recognition is not a regulatory technicality but a practical determinant of whether non-payment insurance can be deployed at scale across its lending portfolio.
The MoU sets out a framework for using non-payment insurance to support ICD's mandate of fostering private sector development across its member countries - the private sector arm of the Islamic Development Bank Group. It was one of 13 partnerships signed by ICD during the IsDB Group's 51st annual meeting in Baku, with the full package valued collectively at $300 million. Other deals struck at the gathering included a €218.7 million financing package for a Côte d'Ivoire road upgrade and a $1 billion, five-year framework agreement between the International Islamic Trade Finance Corporation and Burkina Faso.
William Shaw, deputy CEO of Texel, said: "By combining ICD's ambitions to scale its lending activities and mobilise private sector investment, with Texel's specialist expertise in non-payment insurance, we believe this partnership can help unlock additional capacity, strengthen risk management and support capital deployment where it is needed most."
The MoU comes amid consolidation among UK-based credit and political risk insurance brokers. Berry Palmer & Lyle, a UK specialist in the class, recently secured a long-term investment from private equity firm Preservation Capital Partners to secure its future as an independent, employee-owned firm. Texel has meanwhile continued expanding its broking teams, including new hires in Singapore, as demand for CPRI products grows across emerging markets. Together those moves suggest a market that is both consolidating at the distribution level and expanding geographically - the two dynamics often accompanying a class that is gaining institutional recognition as a mainstream capital management tool rather than a specialist niche.
