The QBE Insurance Group Ltd (ASX:QBE) share price is on watch today after an unfavourable COVID-19 court ruling in the UK…
The post QBE Insurance (ASX:QBE) share price on watch following UK COVID-19 court ruling appeared first on Motley Fool Australia. –
The QBE Insurance Group Ltd (ASX: QBE) share price is not climbing higher with the market today.
In morning trade the insurance giant’s shares are trading flat at $9.28 following the release of an announcement.
What did QBE announce?
This morning QBE provided an update on its UK operations and the impact that a ruling by the High Court of England and Wales will have on its business.
According to the release, the High Court of England and Wales has handed down its decision in the test case commenced by the UK Financial Conduct Authority (FCA) in June 2020.
This test case was undertaken to resolve legal issues concerning the interpretation of common business interruption policy wordings.
This includes some policy wordings of QBE’s UK operations, in the context of whether those policy wordings respond to COVID-19 and related government mandated nationwide lockdowns.
The company advised that the Court ruled in favour of QBE with respect to two out of three of its notifiable disease policy wordings examined and in favour of insurers with respect to denial of access policy wordings.
However, the Court ruled in favour of the insured with respect to one of QBE’s notifiable disease policy wordings. This means that some of QBE policyholders are entitled to claim an insurance payout for business losses suffered when the UK went into lockdown between March and June because of COVID-19.
QBE is considering its options to appeal that decision.
What is the damage?
QBE estimates that its UK business interruption claims exposure is around $170 million before allowing for recoveries under its catastrophe reinsurance protections.
However, it believes that catastrophe reinsurance will limit the net cost of business interruption claims in its UK insurance business to $70 million. This already formed part of the $335 million net cost of COVID-19 allowed for in its recent half year results.
The company advised that it has the opportunity to apply to the Court for permission to appeal some or all of the ruling, with a decision expected to be then made in October.
And while it acknowledges that the estimated gross cost to QBE could increase or decrease, the net cost is not expected to vary.
Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
- 4 ASX shares I would avoid for 2020
- QBE’s silence triggers shareholder outrage
- ASX 200 falls 1.8%, Afterpay drops 8%
- ASX 200 down 1.7%: Afterpay sinks on PayPal news, QBE sacks its CEO, bank shares lower
- Why Afterpay, Flight Centre, Helloworld, & QBE shares are tumbling lower
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.