QBE Insurance Group Ltd. has agreed to pay $103.2 million to settle a shareholder class action in Australia.
The class action was commenced by Money Max Interest Pty Ltd on Sept. 9, 2015 in the Federal Court of Australia on behalf of a group of shareholders who acquired an interest in QBE securities between Aug. 20, 2013 and Dec. 6, 2013.
Shareholders were angry when QBE announced in Dec. 9, 2013 that it was not going to meet earlier profit and financial performance guidance – mostly because of losses in its North American operations. After the profit warning, QBE shares plummeted more than 30 percent over two days, which wiped US$3.9 billion off the company’s market value, according to some reports.
The revelation of the “poor results understandably surprised investors,” according to the website of Maurice Blackburn, the Australia class action law firm that represented the plaintiffs. “Only four months earlier, QBE’s half year report in August 2013 fed market expectations of a profit in excess of $1 billion for FY13 and a turnaround of its problematic North American operations,” the website continued.
QBE confirmed in February 2014 a loss of $254 million, the first for the company since 2001, added Maurice Blackburn’s website.
The settlement was made without any admission of liability and is subject to court approval, said QBE, noting that the settlement will not have a material impact on its 2017 second half earnings.
*This story appeared previously in our sister publication Insurance Journal.