Tokio Marine accuses Greensill of fraud; disavows all insurance covers

Insurance group  Toko Marine fully disavowed policies written to estranged and defunct partner Greensill Capital, which it claims secured coverage fraudulently since at least late 2018 for investment securities it crafted and sold to investors.

Greensill Capital “fraudulently misrepresented” matters underlying policies issued by Tokio Marine’s Australian unit BCC Trade Credit, a Tokio Marine internal investigation has shown. Greensill likewise failed to disclose relevant information for renewals and endorsements and failed to clarify following inquiries and warnings from the insurer.

“In light of those fraudulent misrepresentations and fraudulent breaches of an insured’s duty of disclosure, Tokio Marine has today advised counterparties that these policies and related obligations are void from inception,” management said in a market filing.

Tokio Marine will “vigorously defend” against any claims that might be filed or come to court, management warned.

Tokio Marine reiterated prior assertions that its current financial targets remain valid. “ Tokio Marine does not see any need to adjust our financial guidance for 2021 fiscal year nor do we currently anticipate any material impact on our financials for 2022 fiscal year and onwards.”

Tokio Marine claimed its investigations into the policies remain ongoing.

The Australian unit, in the Tokio Marine group since April 2019, offered trade credit insurance to underlying cash flows in supply chain financing products (reverse factoring). Greensill collapsed in early 2021 after Tokio Marine uncovered its early concerns and began to cancel coverage the year prior. Credit Suisse is eminent amongst investors in Greensill financial products and has been reported to hint it could target Tokio Marine to recoup funds.

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