The idea that insurance float is a contingent liability is only half true; the real competitive advantage comes from the ability to manage it expertly to outperform the competition.
It is not a fatality, but a playground where the most agile insurers can leave others behind.
Those who consider this float as a simple liability miss the opportunity to generate substantial alpha.
Strict claims management, as demonstrated by the performance of some well-capitalized insurers in Singapore, can turn an obligation into a low-cost funding source.
It is a race for performance where underwriting discipline determines the winner.