There are many reasons why the cost of insurance, assuming it's even available, has become prohibitive, & most have very little to do with the increase in the value of horses. Stallions with the same & higher values could be insured at much lower rates 10, & even 5yrs ago, & there were a lot more than the six Lloyd's syndicates which currently participate in the market. Many left after suffering huge losses, but the competition for capital has played an important role. Thus, when the last major Am carrier, Chubb, announced it was withdrawing from the market last yr, it acknowledged that the business was profitable, but left to deploy its capital in lines which were more profitable.

The yearling market is an international one, & many of the most expensive horses are purchased by foreign interests. Given the depressed value of the dollar in recent yrs, & the size of their purses, it might make perfect sense for a Japanese buyer to pay a great deal more than an American buyer for the same yearling. And many of the Arab buyers are, for obvious reasons, not constrained by economic principles. American racing suffers, but it's hard to blame a breeder for trying to produce a horse which will bring the highest price from whoever's willing to bid at a public auction, especially if you keep in mind that most breeders, like owners, lose money.