Australian insurer IAG has reached a confidential settlement with Credit Suisse to resolve a A$2.8 billion ($2 billion) legal dispute arising from the collapse of Greensill Capital, effectively concluding a longstanding case seen as significant within the global insurance sector.

The litigation, which had been scheduled to begin this week in Australia’s Federal Court, was put on hold as the two parties engaged in settlement negotiations. IAG, one of Australia’s largest insurers, confirmed the agreement but did not disclose the terms. It noted that the settlement would have a negligible impact on its annual financial results, citing existing reinsurance and indemnity arrangements.

Marsh, the world’s largest insurance broker and a participant in the Credit Suisse litigation, was also included in the settlement but declined to comment.

Greensill Capital, founded by Australian financier Lex Greensill and advised by former UK Prime Minister David Cameron, collapsed in early 2021 after it failed to renew the insurance underpinning its business. The firm provided loans to clients using supplier or customer invoices as collateral. These loans were subsequently securitized and sold to investors ahead of the collapse.

At the time, Credit Suisse, now part of UBS, had around $10 billion of exposure tied to Greensill loans. Alongside other creditors, the bank sought recovery through insurers, arguing that losses incurred should have been covered under policies issued by The Bond & Credit Co, a Sydney-based underwriting firm owned by Tokio Marine and IAG. The insurers had contested the claims, maintaining that the policies in question, agreed with Greensill, were invalid.

Earlier this year, both IAG and Tokio Marine had settled other claims arising from the Greensill Bank creditor suits. However, litigation involving IAG and White Oak, a US private debt firm connected to the Greensill collapse, remains active. IAG reported that the outstanding claim in that matter stands at approximately A$170 million plus interest and said it intends to continue defending its position.

Analyst Nigel Pittaway of Citi described the settlement as a “welcome end” to a protracted dispute. He noted that, for what appeared to be a relatively modest amount, IAG’s resolution of the claim brought by Credit Suisse should, assuming the insurance and reinsurance contracts hold, largely remove the uncertainty surrounding the Greensill matter that has affected the insurer’s stock.