Badly performing FAI business wasn’t the main catalyst for the downfall of HIH. That much is becoming clear as analysts pour over the failed insurer’s recent history to pinpoint what went wrong.

While HIH admitted in its last annual report that FAI placed it in an “adverse” claims environment, it appears the major problems were far from Australia’s shores.

In California, HIH’s workers’ compensation business went rapidly downhill when the state government scrapped minimum rates at the same time as courts started raising benefits – some retrospectively. It’s worth noting that major players in the Californian workers’ compensation market are also struggling to survive.

In London, HIH’s Cotesworth Syndicate experienced large losses, as did HIH in its professional indemnity and public liability business..