how low can this go?, page-232

I agree, the probability of people changing insurance is very slim considering other companies are also in the same boat. Freedom can offer discounts but bigger insurers may struggle so there is certainty on the book value with a discount.
And ASIC and other regulators are not so stupid to trigger liquidation. They know well this is how GFC triggered- atleast spread in UK that way with the collapse of Northern Rock. so regulators will work with FIG to tone down the noises.
in short the market reaction is pure panic.