The QBE Insurance Group Ltd (ASX: QBE) share price has started this morning’s session firmly in the red.
QBE shares have faced downward pressure following announcements on 2 July the company is facing a representative proceeding from Strand Fitness Pty Ltd “and others”.
At the time of writing, the QBE share price is down 2.67%, after hitting an intraday high of $10.52. It has since pulled back to the current price of $10.40.
Let’s take a look at what is behind these downside moves on QBE’s share chart.
Advised of representative proceedings – so what?
The proceedings mentioned each make allegations against QBE on wrongfully denying cover to various policy-holders during the COVID-19 lockdown(s), for “losses arising from business interruption”.
According to QBE:
The issues raised in these proceedings appear to be substantially similar to those currently before the Australian courts in the second industry test case and QIA’s own Federal Court proceeding against Educational World Travel in liquidation and its liquidator.
The company also mentions that it is satisfied in denying business interruption claims and that it believes its decision to reserve the claims is robust.
“The allegations will be defended” state QBE in the release.
The Australian Shareholders Association also voted against the company’s remuneration report at its annual general meeting that occurred on May 5.
Since then, Australia’s second largest international insurer has appointed Andrew Horton as Group chief executive, whilst announcing Sue Houghton to the post of chief executive of its Australia & Pacific (AUSPAC) division.
QBE shares have climbed from lows of $8.03 to today’s market value, following these 2 events.
QBE share price snapshot
The QBE share price has posted a year to date return of around 22%, ahead of the previous 12 months’ return of 11%.
These gains have slightly outpaced the S&P / ASX 200 Index (ASX: XJO)’s year to date and 12 month return of 9.8% and 21.5% respectively.
The QBE share price has finished the last 5 trading days 3% in the red, extending the time in the red over the previous 1 month.