IAG confirms zero publicity to Greensill collapse

Australian insurer IAG stated it had no web insurance coverage publicity to commerce credit score insurance policies linked to the collapse of economic companies agency Greensill Capital.

Greensill, who makes a speciality of provide chain finance, filed for administration earlier this week after warning he was in “severe monetary misery” and unable to repay a $ 140 million mortgage. at Credit score Suisse.

The transfer got here after Greensill misplaced insurance coverage protection for its debt repackaging enterprise and stated its largest shopper, GFG Alliance, had began to default on its money owed.

The collapse threatens to ship shockwaves by monetary markets and end in important losses for re / insurers, resulting in a ten% drop in IAG shares.

However now IAG has confirmed that it has no web publicity to commerce credit score insurance policies, together with these offered by BCC entities to Greensill.

BCC is an underwriting company licensed to underwrite industrial credit score insurance coverage on behalf of IAG by Insurance coverage Australia Restricted (IAL), considered one of two licensed insurance coverage subsidiaries of IAG in Australia.

As a part of a transitional settlement after the April sale of BCC, new insurance policies had been underwritten by IAL from the date of sale till June 30, 2019 and Tokio Marine & Nichido Fireplace Insurance coverage Co. Ltd. ( Tokio Marine) retained the chance for these insurance policies, web of reinsurance.

Along with the prolonged reinsurance positioned by IAG, as a part of the sale, IAG has entered into agreements with Tokio Marine to carry any residual publicity to the industrial credit score insurance coverage underwritten by BCC by IAL.

Since this clarification, IAG’s share costs have partially recovered, closing at almost 4%.

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