facebookInstead of working with banks for investments for Grab's financial services units, why did Grab decide to go with Insurance companies instead? - Seedly

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Anonymous

09 Sep 2020

Insurance

Instead of working with banks for investments for Grab's financial services units, why did Grab decide to go with Insurance companies instead?

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Duane Cheng

09 Sep 2020

Financial Consultant at Prudential Assurance Company Singapore

Hi there,

If you are currently not aware, banks have outsourced their retail investments to insurers already. The only exception is OCBC, where their GE is under the OCBC group.

At the end of the day, insurers have the AUM to be able to drive returns, as they do active and passive investments into the open market. For a local bank, for which many do not have an investment banking arm, it will be a very challenging task for them to manage the funds on their books. They will need to generate returns for both policyowners, as well as net operating profit for the bank.

At that point in time, in present day market scenario, with a low-rate environment its either you take on risk, or stick with conservative investments. If i as a consumer, invest in Grab's financial services, and its not able to generate good returns on capital, then its better to look elsewhere.

Hope i was able to shed some insight!

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