Tokio Marine says Greensill’s risk is not material in a new financial year

Tokio Marine said the reversal of Greensill Capital’s collapse would have “no significant impact” on the coming financial year, as the Japanese insurer moved to exploit market profitability. he’s on his way for a big hit.

Tokio Marine released a statement Tuesday in response to a 5.5 percent fall in its shares the day before. The fall came after an anonymous Bloomberg report, late last week which suggested that important elements of Tokio Marine’s exposure to Greensill were not covered by insurance contracts.

Until Monday’s collapse, Tokio Marine shares were unaffected when the London-based supply chain finance industry collapsed earlier this month and how it could have escalated into the debate.

“The net release we expect remains unchanged,” Tokio Marine said in the statement, following an internal investigation into the risk associated with Greensill. “We see no need to change our financial management and do not anticipate any significant impact on our finances for the next fiscal year. “The company’s forthcoming financial year begins in April.

Tokio Marine, acquired by Sydney-based subscriber Bond & Credit Co. in 2019, said they are continuing to assess the validity of insurance policies that are at the heart of Greensill’s decline.

The company had insisted it was open to Greensill because much of its risk was covered by resentment. But they had not previously talked about the impact for the new fiscal year ending in March 2022.

Hideyasu Ban, an analyst at Jefferies, said last week that the explanations given by Tokio Marine seemed to make sense, but that it could also take some time before the full extent of the various claims and publish a financial collapse from the fall of Greensill.

Tokio Marine’s position is that the insurance covering Greensill may be vacant as there may be no receipts, Ban said, noting that if the basic insurance were vacant, it did not matter whether the effective insurance.

“If the court, through a lawsuit, admits that the receipts existed, Tokio’s loss could have been greater,” Ban said in an email, adding that she did not have sufficient reasons. company at present to counter reserves against such a loss.

On the basis that Tokio Marine would maintain its lead for the current financial year, analysts have said its loss on trade credit insurance for Greensill-funded business transactions would be in the range of ¥ 10bn ($ 92m ) to ¥ 20bn.

Tokio Marine informed Greensill of its decision to suspend broadcasting in July after it was discovered that a BCC subscriber had exceeded its risk limits, insuring amounts contributed up to more than A $ 10bn (US $ 7.7bn). The subscriber has been removed.