The recent failure of one of Australia's largest medical defence organisations, United Medical Protection (UMP), has highlighted the chronic nature of the insurance crisis in Australia.

The cause of the crisis is at least twofold. First, many insurance companies have been caught short by an excessive reliance on increases in stock prices, which did not materialise in time to compensate for underpriced premiums aimed at capturing clients. Second, there has been a significant increase in payouts for personal injury.

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