Insurers buy insurance (reinsurance) in an attempt to offload excess risk. In your follow-up example, they could reinsure much of the $200B so that they're onl

Insurers buy insurance (reinsurance) in an attempt to offload excess risk. In your follow-up example, they could reinsure much of the $200B so that they're only liable for a small(er) part of the losses. The calculation is thus whether they can pay the premiums on the excess (and accept reinsurers' contractual terms) and still make money.