IAG says Credit Suisse Greensill settlement is not final after reported trial cancellation

Insurance Australia Group has said a settlement with Credit Suisse entities over Greensill-linked trade credit insurance litigation has not been finalised, after reports that the parties had reached terms and a Federal Court hearing scheduled to begin this week was cancelled.

The proceedings concern trade credit insurance policies purportedly issued by BCC Trade Credit on behalf of IAG subsidiary Insurance Australia Limited in connection with Greensill entities.

IAG issued the clarification on 21 September after the Australian Financial Review reported that Credit Suisse and the insurer had reached a settlement. The insurer said it would not comment on confidential litigation discussions but stated explicitly that a settlement had not been finalised.

Australian insurance publication insuranceNEWS reported that the Federal Court hearing scheduled to begin on Monday had been cancelled, with a short mention hearing expected next week.

No settlement value or other commercial terms have been disclosed.

IAG also reiterated its position that any settlement would not be expected to have a material effect on its financial position or FY27 results, taking into account anticipated insurance and reinsurance recoveries and other indemnities.

The scale of the wider Greensill litigation makes the distinction between claimed amounts and potential insurance exposure particularly important.

When IAG settled separate proceedings brought by Greensill Bank and its insolvency administrator in May, it said those claims had an aggregate face value of about A$4bn plus interest. At that point, proceedings brought by Credit Suisse and White Oak entities with an aggregate claimed face value of approximately A$3bn plus interest remained on foot.

That A$3bn figure is not the value of the prospective Credit Suisse settlement and should not be interpreted as IAG’s expected loss.

For the receivables-finance market, the dispute remains significant because trade credit insurance formed part of the risk-transfer architecture around assets financed through Greensill.

A settlement of the Credit Suisse proceedings would remove another major piece of litigation from the collapse, but IAG’s latest statement means it would be premature to treat that outcome as completed until the parties formally conclude the agreement.