Page 173 - Be Reasonable – Do It My Way , Peter E. Daly AM, My Story

CHAPTER 17 - CIC INSURANCE (CIC)
end CIC had to relinquish their shareholding because there was a change of control. This became even more apparent when HIH took over CIC.
It was a sad day and a hard blow to me and my colleagues to witness what happened, especially after we had fought so hard to secure the acquisition of CIC. However, the reasons that NW ultimately sold CIC to HIH were largely related to Norwich’s concerns about CIC’s reserving, the management team and the company’s exposure to the US market.
It is amazing how history can repeat itself. Another listed company, FAI was widely thought to be struggling to meet its capital and solvency requirements from APRA. So, it was no surprise to the market when FAI was also bought by HIH, another listed insurer which by now was the largest in Australia. HIH was run by Ray Williams and FAI by Rodney Adler both of whom I later had much to do with at ICA. FAI also turned out to be badly under-reserved.
Lo and behold HIH then started to get into difficulty for all the same reasons: under-reserving, exposure to the USA markets, the absorption of FAI, and corporate governance.
HIH went into liquidation; probably the largest corporate collapse in Australian history. So that was the ultimate demise of Norwich Union, CIC, Lion, FAI and a host of other familiar insurance names. This signalled the end of the Norwich business which had very long and proud history in Australia; but Norwich itself is still going strong in the UK.
In terms of Norwich’s history you may be interested to know that Norwich Union commenced in 1706 when Queen Anne granted a charter founding The Amicable Society. In those days policyholders were limited to 2,000 in number and each one paid six pounds four shillings per annum plus five shillings to the registrar and five shillings to the joint stock of the Society.
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