Underwriting agencies and brokers around Australia are scrambling to meet the sudden demand for coverage brought about by the collapse of HIH last Thursday night.

Brokers seeking new coverholders for their clients are being stretched to the limit, according to NIBA Chief Executive Noel Pettersen.

“Everybody’s working to ensure their clients are covered, and we’re feeding out information to our members as it becomes available.”

Concord Insurance Group MD Ron Smith said business has been “coming from everywhere” over the past couple of weeks. Much of the business still in the market is unique cover that HIH wrote, mainly in the PI and D & O classes.

Mr Smith said much of this business is “very difficult, if not impossible” to cover under the same terms as HIH. “But the London market is being exceptionally receptive to our approaches, and we’re doing everything we can for brokers,” he said.

“But some clients should expect heavy increases in their premiums to meet the Lloyd’s requirements.”

HIH applied to be placed into provisional liquidation late last Thursday, just hours before it was due to report its financial results for the half-year to December. The loss was $800 million.

ASIC and APRA announced they were working together to “protect and inform policyholders”, although Canberra sources suggest there is tension between the two regulators. ASIC is known to be critical of the seemingly laid-back approach taken by APRA as the HIH situation became more serious over the past two months.

In a statement, ASIC said APRA has been working with the provisional liquidator to put in place measures that provide alternative insurance arrangements for HIH policyholders.

One major area of specialisation for HIH was travel insurance. The provisional liquidator has agreed that travel insurance claims involving medical and hospital emergencies will be paid for the time being.

Another specialty of HIH – industry professional indemnity schemes – is also in limbo while major insurers and brokers try to work out acceptable solutions. Professional groups believed (but not confirmed) to be affected include NSW lawyers using LawCover, accountants, auditors and intermediary groups.

Most travel organisations selling HIH-originated travel insurance – including Qantas, Air New Zealand, AFTA travel agents, Jetset and American Express – have stopped offering it.

QBE will exchange relevant HIH policies for identical QBE policies, with no additional fee.

Private motor, CTP, private pleasurecraft, home building and home and contents insurance policies with HIH, FAI, CIC and WMG – some of the 18 HIH-associated companies affected by the collapse –which were current at January 1 or were issued by Allianz after that date will be covered.