Tokio Marine Holdings Inc. is facing a larger-than-expected exposure to the Greensill Capital meltdown after finding that reinsurance contracts intended to limit losses didn’t cover its unit that did the most business with Greensill.
Tokio’s Australia Bond & Credit Co. — which at one point wrote more than 10 billion Australian dollars ($7.7 billion; ¥838 billion) of insurance policies for Greensill — isn’t covered by contracts with a key group of reinsurers, according to people familiar with the matter. A group of the companies, including Hannover Rueck SE and Scor SE, recently asked Tokio Marine to clarify the Greensill situation and were told by the company that their exposure is negligible, the people said, asking for anonymity to discuss a private exchange.
"We have reviewed this situation carefully, including our reinsurance position, and will continue to do so as needed,” Tokio Marine, which had previously declined to comment, said in an emailed statement. "On that basis, our expected net exposure remains unchanged, and as a result we don’t see any need to adjust our financial guidance.”