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

  1. 👍 0
  2. 👎 0
  3. 👁 52
asked by LEE
  1. 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!!


    1. 👍 0
    2. 👎 0
  2. Take a look at these: from from

    1. 👍 0
    2. 👎 0

Respond to this Question

First Name

Your Response

Similar Questions


    The case of the collapse of HIH insurance also involved in unethical situation that the impact of that failure was not limited to shareholders and unsecured creditors, it also affected employees, policy holders and claimants under

    asked by LEE on September 9, 2008
  2. World History

    Which most accurately describes the impact that the collapse of the Soviet Union had on the Middle East? The Soviet collapse extended the influence of democracy with free elections throughout the Middle East. The Soviet collapse

    asked by mgoguen on November 30, 2018
  3. world history

    As a result of the Peloponnesian war the Greek city-states suffered from political collapse.Are there any conclusions you can draw about how political collapse relates to the fall or survival of civilization? Well, if I understand

    asked by pamela on November 17, 2006
  4. Physis

    Watch an online video of the collapse of the Tacoma Narrows Bridge What do you think? What is the relationship between the collapse of the Tacoma Bridge and me pushing my daughter on a swing?

    asked by Morgan on April 26, 2018
  5. Dance

    Describe how would you execute a bend, wiggle, walk, and skip. Also when it comes to The three qualities of energy/movement collapse, explode, and swinging how would you find that in the enviroment. like what is an example of

    asked by Melissa on February 2, 2017
  6. physics

    according to classical model of the H-atom,an electron moving in a circular orbit of 0.053 nm around the proton fixed at the center would be unstable and the electron should ultimately collapse to the proton. Estimate how long it

    asked by kalyan on September 7, 2013
  7. World History

    Why did rogue states become more prominent following the Soviet Union’s collapse? I know what a rogue state is but I don't know why it is involved with the Soviet Union and their collapse. I also know that it has something to do

    asked by Emily on August 28, 2018
  8. Heatlh

    What monumental event occurred in the 1990s that had a significant impact on the world and the Olympics? a. The collapse of the Berlin Wall b. The collapse of the Soviet Union c. Both A and B had significant impact on the world

    asked by LW on February 17, 2008
  9. Astronomy

    Why didn’t the Universe collapse into a black hole in the past when there was so much matter in such a small space? (a) Most of the particles in the early Universe were unstable and decayed before a black hole could form. By the

    asked by qwerty on October 1, 2013
  10. US History

    Why did the National Labor Union collapse? Please don't give me links - I've looked everywhere, including Wikipedia. I just don't understand what actually caused it to collapse so I'm looking for an answer. I'm trying to connect

    asked by Belinda on February 12, 2007

More Similar Questions