SYDNEY: Insurance Australia Group has reached a settlement with entities linked to Credit Suisse over a major legal dispute connected to the collapse of supply-chain finance company Greensill Capital, bringing another substantial part of the long-running litigation to a close.

The proceedings involved claimed amounts with an aggregate face value of approximately A$2.8 billion, plus interest. The actual financial terms of the settlement have not been disclosed because the agreement is confidential.

The dispute concerns insurance policies associated with Greensill entities and policies purportedly issued through BCC Trade Credit on behalf of Insurance Australia Limited. The legal proceedings have been part of a wider series of cases arising from Greensill Capital’s collapse.

Greensill, once a major player in supply-chain finance, collapsed in 2021, triggering substantial losses for investors and financial institutions. The failure subsequently led to multiple legal disputes involving insurers, lenders and other companies connected to the financing arrangements.

For Insurance Australia Group, the latest agreement removes one of the largest remaining claims connected with the Greensill affair. The company said the settlement is not expected to have a material effect on its financial position or its fiscal 2027 results, taking into account anticipated recoveries from insurance, reinsurance arrangements and other indemnities.

The development follows another major settlement reached earlier in the year involving Greensill Bank and its insolvency administrator. That separate case involved claimed amounts with an aggregate face value of about A$4 billion plus interest.

The two settlements together represent a significant reduction in the value of the major Greensill-related claims facing the Australian insurer.

However, the legal saga has not ended completely. Proceedings brought by White Oak against Insurance Australia Limited and other parties remain ongoing. Those claims have an aggregate face value of approximately A$170 million plus interest.

The Greensill disputes have attracted considerable attention because of the scale of the claims and the number of international financial institutions involved. The collapse of the finance company exposed complex relationships involving insurance, credit arrangements and funding structures.

Credit Suisse itself became part of UBS after its acquisition by the Swiss banking group. The Greensill-related fallout has remained one of the significant legacy legal issues associated with the former Credit Suisse business.

The latest settlement also demonstrates the potentially lengthy process involved in resolving large corporate disputes. Negotiations can continue for years after an underlying financial collapse, particularly when multiple insurers, lenders and corporate entities are involved.

For investors, the settlement provides greater clarity around Insurance Australia Group’s remaining exposure to the Greensill litigation. The company continues to maintain that anticipated recoveries and contractual arrangements should limit the financial impact of the resolution.

The confidential nature of the agreement means that the amount ultimately paid or recovered by the parties has not been publicly detailed. Consequently, the A$2.8 billion figure should be understood as the value of the claims involved rather than the amount paid under the settlement.

The remaining White Oak proceedings will continue separately, leaving another chapter of the Greensill-related legal disputes still unresolved.

The settlement nevertheless marks an important step in reducing the outstanding litigation connected with the 2021 collapse and provides Insurance Australia Group with greater certainty as it moves forward.