The collapse of HIH (Australian Insurance company) Essay

The founder of HIH (Australian Insurance come with) - Essay ExampleMoreover, analysts were concerned with the increase in the capital adequacy requirements in regard of the insurers. It was basically a proposal by Australian Prudential Regulatory Authority (APRA) in 2000. (A Chronology of tell Events, n.d) This was followed by selling part of domestic business to German based Allianz at about $ cholecalciferol million. The same year also saw the tumbling of share prices reaching to the lowest ever. Markets blamed the Allianz deal. The future(a) year saw the most heartening part of HIH as it estimated $800 million loss and enters into a short letter of provisional liquidation. Both Australian Securities & Investments Commission (ASIC) and Royal Commission after analyzing the documents finally forced the company to close down its operations which marked the collapse of one of the biggest corporate ruins in Australia. (Kehl, 2001)Many would infer the fact that the sudden demise o f such a huge insurer firm is generally collect to its aggressive business strategies. It has moved on to acquire FAI and within a year or two it has again made a move to sell off its part of business to Allianz. Also other most remarkable part of the story is regarding its subsidiaries. The company recorded to have more than 200 subsidiaries world-wide. This colossal creation of subsidiaries has affected the business as a whole. With such expansion policies and an average of 26% a year of growth, the company struggled hard to find its way through as the market was experiencing enough disceptation especially from its overseas operations in UK and US. (HIH Insurance, 2001) Even one of the prime liquidators of HIH, Mr. McGrath also opined that the FAI Insurances were of no evaluate when HIH bided for $295 million. (Sexton, 2009)The main motive that is to be considered in acquiring FAI Insurance by HIH was to make a authoritative mark in the Australian insurance industry. Theref ore in 1995 the