A group of insurance companies have settled a A$2.8bn (US$2bn) claim brought by entities of Credit Suisse over trade credit policies they issued for failed supply chain finance provider Greensill.
The settlement, announced by Insurance Australia Group and UBS today, averts most of a mammoth five-month trial that was due to begin in Sydney this month, centred on the relationship between Greensill, its insurers, and its broker Marsh. The settlement figure was not disclosed.
“The Credit Suisse Supply Chain Finance Funds and the respondents in the Australian Greensill-related proceedings have reached a settlement,” UBS, which took over Credit Suisse in 2023, said in a statement. “UBS welcomes this outcome, which aligns with its objective of resolving legacy matters apace and in the best interests of its stakeholders.”
The settlement also includes Tokio Marine, which owns Greensill’s primary insurer the Bond & Credit Company (BCC), and Marsh. Tokio Marine declined to comment while Marsh did not respond to a request for comment.
Greensill collapsed in 2021, shortly after BCC, refused to renew policies covering its extensive supply chain finance programmes. BCC was bought by Tokio Marine in 2019 and had underwritten policies on behalf of Insurance Australia.
The Credit Suisse funds were heavily invested in Greensill’s lending portfolios and argued that the insurance companies should honour policies under which they were loss payees.
The insurers had put forward several defences to the claims to argue the policies were invalidated, including allegations of non-disclosure against Greensill when they were issued.
The funds joined Marsh as a respondent to the proceedings in 2023, arguing the broker had “made misleading statements and omissions” in relation to the Greensill cover. Marsh made a US$425mn provision in April in advance of the Australian proceedings [LINK]
Similar claims brought by US firm White Oak against the insurers remain set to go to trial next month, lawyers told a Sydney court on September 24. The US firm is claiming around A$170mn from the insurers but has previously settled its claims against Marsh.
If the White Oak proceedings are also discontinued, it means vast reams of documents disclosed by the parties about the Greensill saga are unlikely to be aired in court. Greg Brereton, the BCC underwriter who played a key role in its provision of insurance to Greensill, has been one of the most keenly anticipated witnesses set to give evidence.
Earlier this year, the same group of insurance companies also settled an even larger US$3bn claim brought by the administrators of Greensill Bank AG. Terms were not disclosed.
Insurance Australia Group said the latest settlement “would not have a material impact on its financial position or FY27 financial results, based on anticipated recoveries including from insurance and reinsurance arrangements and other indemnities”.
Greensill’s collapse triggered years of litigation and regulatory probes, many involving the GFG Alliance group of companies linked to steel magnate Sanjeev Gupta.
Last year, Credit Suisse lost a US$440mn claim against Japan’s SoftBank in a Greensill-related claim.
Greensill Capital’s former auditor Saffery Champness paid £71mn to the finance firm’s administrators earlier this year to settle a claim, while Lex Greensill in June was banned from being a UK company director for nine years.
A UK Serious Fraud Office inquiry into the GFG Alliance, which is focused on the companies’ dealings with Greensill, remains ongoing.
