Australia's biggest insurer has stepped back from what would have been one of the country's largest ever commercial trials, agreeing to settle a dispute with Credit Suisse over the collapse of Greensill Capital just days before the case was due to open in the Federal Court.
Insurance Australia Group (IAG), owner of household names including NRMA Insurance, CGU and WFI, confirmed a deal had been struck with Credit Suisse (now absorbed into UBS following the bank's 2023 rescue takeover) ahead of hearings scheduled to begin this week.
Insiders have said that terms were finalised late last week. The Federal Court has cancelled the opening hearing and replaced it with a short mention, where the parties are expected to formally tell the court the matter has resolved. Neither the settlement sum nor its terms have been disclosed.
The settlement removes one of the last major pieces of unfinished business from the collapse of Lex Greensill's supply chain finance empire, five years after it first went into administration.
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Strip away the banking headlines and this was always an insurance case. Greensill bought up companies' unpaid invoices, packaged them into securities, and sold them on to funds run by Credit Suisse, Greensill Bank and US lender White Oak. Credit Suisse alone held roughly $10 billion of that paper.
The structure depended on trade credit insurance behind it, much of which was written through Bond & Credit Co, a Sydney underwriting agency that operated on IAG's paper before being sold to Tokio Marine in 2019.
Credit Suisse's case turned on the conduct of Bond & Credit and its former underwriter, Greg Brereton, who the bank alleged had breached Australian insurance law when writing policies for Greensill entities. Credit Suisse argued IAG should ultimately wear the consequences because Bond & Credit was its agent. IAG's defence was that Bond & Credit and Brereton had acted outside their authority, and that a principal shouldn't be liable for an agent acting alone.
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The legal bills must have been huge. At least seven law firms were engaged across the various parties, including Gilbert + Tobin for Credit Suisse and Allens for IAG. Written submissions reportedly ran past 500 pages a side, with senior counsel including Noel Hutley SC and Tony Bannon SC leading teams that, in some cases, ran to close to ten barristers each.
It also sat inside a wider web of litigation. IAG had already settled a related, larger claim brought by administrators of Greensill Bank AG earlier this year, reported to have a face value of around $4 billion without any material hit to its financial results. Tokio Marine, which took over Bond & Credit in 2019, separately settled its own exposure to that Greensill Bank claim.
Analysts at Macquarie flagged in mid-2026 that IAG's net exposure to the outstanding Greensill litigation could run as high as $740 million in a worst-case scenario, based on Credit Suisse recovering only a fraction of its claim and IAG's professional indemnity cover topping out around $200 million. Broker Marsh, which placed the original Greensill trade credit cover, had also flagged hundreds of millions of dollars in potential liabilities tied to the dispute.
IAG shares had traded broadly flat for most of the year before rallying into the settlement news, closing around $8.01 on the eve of the trial being called off.
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Settlements tell us little about who was ultimately right. No admission of liability has been made public, and IAG has consistently maintained it holds no net insurance exposure to the Greensill-linked trade credit policies, pointing to the 2019 sale of Bond & Credit and the reinsurance arrangements struck at the time.
The litigation still generated years of discovery disputes, including questions over Swiss banking secrecy law and what regulators knew and when. At its peak the case management list ran to eleven separate proceedings.
With the Credit Suisse matter resolved, the remaining question is whether the White Oak proceedings against IAG and other parties settle on similar terms, or head to trial.
