Talking about insurance float as a source of low-cost capital is a dangerous oversimplification that ignores the reality of contingent liabilities.
A combined ratio of 105% is not an implicit marginal cost; it is already a clear signal of underperformance even before the money is invested, a deficit to be filled, not an advantage.
In Singapore, under the rigorous supervision of the MAS, no insurer would consider this float as free capital; it requires proactive risk management and massive liquidity reserves.
Neglecting maintenance requirements means losing the race for alpha and being overtaken by more prudent competitors, as seen with post-pandemic revaluations that have eroded the balance sheets of some overly optimistic players.