IAG Settles A$2.8 Billion Greensill Lawsuit With Credit Suisse

Global Insurance Desk: Insurance Australia Group has drawn a line under one of the biggest remaining legal fights from the Greensill Capital collapse, confirming it has settled a claim with a face value of about A$2.8 billion, or roughly 1.96 billion US dollars. The agreement involves Credit Suisse entities, now part of UBS, and was announced by the Australian insurer on Friday.

The dispute centred on trade credit insurance policies that IAG’s unit, Insurance Australia Limited, had issued through BCC Trade Credit to various Greensill companies. When Greensill failed in early 2021, Credit Suisse was left winding down around 10 billion dollars in related supply-chain finance funds and turned to the insurers for recovery. The Federal Court of Australia case had been heading toward a lengthy trial when the parties reached terms.

IAG made clear that the financial details of the deal remain confidential. It also stressed that the settlement is not expected to leave any material mark on the group’s overall financial position or its results for the 2027 financial year. That assessment rests on recoveries the company anticipates from its own insurance and reinsurance arrangements as well as other indemnities.

This is the second major Greensill-related settlement IAG has struck this year. In May it resolved a separate set of proceedings brought by the administrators of Greensill Bank that carried an even larger face value of around A$4 billion. One smaller claim from White Oak entities, valued at roughly A$170 million plus interest, is still being defended.

Analysts have suggested the latest agreement removes much of the lingering uncertainty that had hung over IAG’s share price since the scandal first erupted. Shares in the insurer edged higher on the news while the broader market was slightly weaker. The collapse of Lex Greensill’s once high-flying finance firm continues to generate legal aftershocks years later, but for IAG at least the bulk of the exposure now appears resolved.