The idea that the insurance float is mainly a contingent liability contradicts how the industry has historically managed these funds.
The playbook shows that, although technically a debt, prudent underwriting has long allowed insurers to use it as a source of investment capital.
Insurance companies have built empires by using the float to finance acquisitions and diversified investments, as seen with Berkshire Hathaway.
This strategy is not new but an established model that, with disciplined management, turns an obligation into an asset.