IAG has stressed it has no net insurance exposure to financial company Greensill trade credit policies after its slumping shares were today briefly placed in a trading halt.

The insurer, in response to market enquiries, says it sold its 50% interest in BCC Trade Credit on April 9 2019 to Tokio Marine Management (Australasia), with the result of eliminating net exposure to trade credit insurance.

BCC is an underwriting agency that was authorised to provide cover on IAG’s behalf through its Insurance Australia Ltd (IAL) subsidiary.

As part of a transition arrangement after the April sale of BCC, new policies were underwritten by IAL until June 30 that year, and Tokio Marine & Nichido Fire Insurance retained the risk for these policies net of reinsurance.

“In addition to extensive reinsurance placed by IAG, as part of the sale IAG entered into agreements with Tokio Marine for it to hold any remaining exposure to trade credit insurance written by BCC through IAL,” the statement says.

IAG shares, which closed at $4.81 yesterday, slumped by around 10% to a low of $4.30 during trading today before going into a halt. The stock rebounded after the statement was released and the halt was lifted.

Working capital provider Greensill failed in last-minute NSW Supreme Court action taken last week to avert the expiry of trade credit insurance policies that had provided $US4.6 billion in cover.

Media reports this morning said Greensill had appointed Grant Thornton as administrators to its UK and Australian arms.