I am going to intoduce the collapse of HIH insurance...

The second case of the collapse of HIH insurance showed that the impact of that failure was not limited to shareholders and unsecured creditors, it also affected employees, policy holders and claimants under polices. HIH comprised several separate government–licensed insurance companies, including HIH Casualty and General Insurance Limited, FAI General Insurance Company Limited (FAI), CIC Insurance Limited (CIC) and World Marine and General Insurances Limited (WMG). When HIH collapsed in 2002, it represented the largest corporate collapse in Australian Corporate history. The fundamental problem was that HIH had been offering insurance at too low a price, and had not set aside enough capital to cover its future liabilities. This was exacerbated by management and due diligence failures, which led HIH to acquire other troubled insurance businesses at too high a price. (Elias 2001)

In addition, when HIH took over FAI Insurance, the Owner of FAI responded to allegations that the purchase price of his company was too high .It has emerged that HIH did not conduct due diligence on FAI, and instead relied on FAIs recently completed accounts. The acquisition of FAI was not HIHs only questionable business decision but also partly blamed on its international operations, particularly those in England and the US. The company chose a sector that has proved problematic for many market participants and that, as an emerging insurance sector, involved HIH in business practices and legal risks it did not fully understand. Therefore HIH get their pricing and reserving wrong in sectors that exhibit long tails of risk, such as workers compensation and professional indemnity.

is it make you sense?
my essay topic is unethical scandals in Australia

If this is your introduction to a topic, why does your first sentence begin this way: "The second case of the collapse of HIH insurance..."

If I were reading this paper, I'd want to know who threw away the first page!!

??

Take a look at these:

http://leo.stcloudstate.edu/acadwrite/intro.html from http://leo.stcloudstate.edu/catalogue.html

http://grammar.ccc.commnet.edu/grammar/intros.htm from http://grammar.ccc.commnet.edu/grammar/

Yes, it makes sense that your essay topic is about unethical scandals in Australia, specifically focusing on the collapse of HIH Insurance.

The collapse of HIH Insurance was a significant event that had far-reaching consequences, not just for shareholders and creditors, but also for employees, policyholders, and claimants. HIH was a conglomerate of licensed insurance companies, including FAI, CIC, and WMG. The collapse of HIH in 2002 marked the largest corporate collapse in Australian history.

The main problem that led to the collapse of HIH was that the company had been offering insurance at an excessively low price and did not set aside enough capital to cover its future liabilities. This was compounded by management and due diligence failures, as HIH acquired other struggling insurance companies at inflated prices.

The acquisition of FAI Insurance by HIH highlighted the lack of due diligence, as HIH relied on FAI's recently completed accounts instead of conducting thorough investigations. The collapse was also partially attributed to HIH's international operations, particularly in England and the US, where they engaged in business practices and faced legal risks they did not fully understand.

Furthermore, HIH made incorrect pricing and reserving decisions, particularly in sectors like workers' compensation and professional indemnity, which have long tails of risk. This suggests that HIH did not fully comprehend the complexities of these sectors.

Overall, the collapse of HIH Insurance reflects unethical practices such as offering insurance at unsustainable prices, inadequate capital reserves, failure in due diligence, and poor decision-making in acquisitions. These unethical practices had a profound impact on various stakeholders, highlighting the need for better regulation and ethical standards in the insurance industry.

To further explore the unethical scandal of HIH Insurance and its collapse, you can delve into specific details of the case, analyze the consequences for different stakeholders, examine regulatory shortcomings, and discuss the lessons learned from this event.