The Insurance Australia Group Ltd (ASX: IAG) share price is in the red today amid reports the company is facing nearly $300 million in claims in the Federal Court.
It follows longstanding concerns that IAG could be liable for insurance policies placed on security packages sold by the now-defunct Greensill Capital. Though, the company has denied any exposure to the firm.
Additionally, disastrous flooding in parts of Australia could be weighing on investors’ minds this morning.
At the time of writing, the IAG share price is $4.33, 1.7% lower than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.62%.
Let’s take a closer look at what could be weighing on the insurance giant’s stock on Thursday.
Is this dragging on the IAG share price today?
The IAG share price is sliding today amid reports that it’s being hit with nearly $300 million of claims due to its stake in specialist insurer, Bond and Credit Co.
When Greensill collapsed in early 2021, rumours swirled that IAG could be liable to pay for some of losses associated with the firm’s failure.
That’s because IAG owned a 50% share of Bond and Credit Co, which covered credit policies sold to Greensill entities.
However, IAG sold its share of the specialist insurer in 2019. It claimed the sale eliminated its net exposure to trade credit insurance.
Over the weekend, reports emerged claiming Credit Suisse Virtuoso launched a new claim relating to the firm’s collapse, seeking around $42 million from IAG in the Federal Court.
Today, the Australian Financial Review is reporting White Oak, Credit Suisse, and the German administrator of Greensill Bank are, together, chasing IAG for close to $300 million.
The Motley Fool Australia reached out to IAG for comment but did not receive an immediate response.
Wild weather and flooding continues
More major flooding could also be dragging on the IAG share price today.
Devastating floods have continued to hit parts of Australia’s east coast, as New South Wales (NSW) SES issues evacuation orders for parts of Sydney.
The Bureau of Meteorology is forecasting up to 100 millimetres of rain for the state’s Metropolitan and Illawarra districts. Parts of the Mid North Coast, Hunter, and Central Tablelands are also expected to be impacted.
It has also issued a warning of high tides, heavy surf, coastal erosion, and potential flooding for most of NSW’s coastline.
Additionally, in already sodden south-east Queensland, the bureau has issued yet another major flood warning. This time, for the Logan River.
Parts of the river’s catchments received another 80 millimetres of rainfall overnight. That’s after they received between 400 millimetres and 800 millimetres last weekend.
The bureau is also expecting flooding to return to parts of Brisbane and Ipswich on Thursday and Friday.
IAG share price snapshot
It has been a rough week for the IAG share price.
It has fallen 9.7% since Friday’s close.
That sees it trading for 3% less than it was at the start of 2022. It’s also currently 11% lower than it was this time last year.
The post IAG (ASX:IAG) share price slumps amid $300m Greensill hit appeared first on The Motley Fool Australia.
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More reading
- Why is the IAG (ASX:IAG) share price sliding this week?
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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