Westpac Banking Corp (ASX: WBC)
Class action: A class action by Shine Lawyers seem to have put Westpac in some trouble with the group being alleged for breaching its fiduciary duty, and adopting unfair means to take advantage of the position to gain a benefit. Primarily, the bank is challenged for selling customers life insurance policies at very abrupt prices. Westpac is said to have sold term life, total and permanent disablement, trauma and income protection insurance at a 10% premium compared to prices at which the same policies were sold elsewhere. Particularly, statement of claim is based on the bank’s use of the code “CF 1.045” for policies that were 4.5% higher and sold by WBC’s network of financial advisers, while code “CF 0.95” has been said to be used for policies sold at a 5% discount available to independent financial advisers. The case highlights that the fraud seem to be linked to a value worth $100 million. Recently, Commonwealth Bank was seen to come under the claws of a class action launched by Maurice Blackburn and litigation funders IMF Bentham with regards to the Austrac fiasco.
WBC stock has surged about 6.8% in the last three months, as at October 12, 2017.
QBE Insurance Group Ltd (ASX: QBE)
Affirmation on financial strength ratings: QBE Insurance Group has lately advised that the 'A+' financial strength ratings on QBE’s core operating Companies and 'A-' issuer credit rating (ICR) on the Company have been affirmed by S&P Global Ratings. Further, existing "Positive" rating outlook on the core operating entities and other subsidiaries has been maintained. Despite the Company’s full year 2017 operating performance being impacted by atypical natural disasters and extreme weather events, S&P has recognized QBE’s strong business franchise and solid risk profile, with a very strong capital adequacy. It is worth noting that Moody’s has also maintained stable rating outlook on QBE’s financial strength and senior unsecured debt ratings despite the weakened earnings for FY17.
This made the QBE stock edge a little up on October 13, 2017 as the group’s balance sheet strength and prior year reserve development have been recognised. The group has recently increased its large individual risk and catastrophe claims allowance and has purchased much of its reinsurance programs for 2018.
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