QBE Insurance Group chief executive John Neal has vigorously defended the company's disclosure practices, arguing he was ''100 per cent confident'' the global insurer had complied with regulations amid the threat of a potential shareholder class action.
Legal firm Maurice Blackburn Lawyers is investigating whether the insurance company breached its continuous disclosure requirements for not informing investors of its losses sooner.
QBE, which expanded aggressively under the watch of former CEO Frank O'Halloran, entered into a trading halt on December 6, before warning of a severe profit downgrade on December 9. The company reported a $US254 million loss for 2013 - its first annual loss in 12 years.
Mr Neal said the company had ''really no reason to worry'' about the potential class action, noting QBE had stuck strictly to the rules in its disclosure requirements.
''We are very vigorous in terms of recognising our continuous disclosure obligations, and I'm 100 per cent confident that we've met those in every respect, especially through the December time frame when we announced our profit downgrade,'' he said after QBE's annual meeting in Sydney on Wednesday.
''If the action does actually manifest properly … then we'll be ready to defend ourselves against any suggestion of an action,'' he said.
QBE Insurance Group's share price plummeted 22 per cent in one day last December following the company's shock profit warning due to its embattled US division. The company's share price has fallen 5.2 per cent in the past 12 months to $12.80, compared with the 12.8 per cent gains of the benchmark S&P/ASX 200 Index.
QBE chairman Marty Becker said securing earnings stability was one of the company's top priorities this year. Mr Becker, who replaces former chairman Belinda Hutchinson this week, admitted 2013 was a difficult year for the company and a disappointing one for shareholders.
Mr Becker told investors the insurer was employing a ''rigorous approach'' to ensure it maintained pricing discipline across its various operations.
He said ensuring QBE's earnings stability and predictability, completing the group's board and executive team renewal, and managing the balance sheet to meet shareholders' expectations were his top priorities in 2014.
''I think what QBE shareholders are looking for is exactly what our priorities are - they want some consistency of performance, and they want to see QBE resume not just industry leadership position but a financial leadership position. That's a priority of the board,'' he said.
QBE shareholders gave the green light to the company's remuneration report.
Maurice Blackburn class actions partner Jacob Varghese said the law firm had been approached by QBE shareholders who were concerned the company's profit downgrade announcement timing was ''less than frank''.
''If QBE has breached its obligations or misled the market, investors that bought QBE shares in the period leading up to December 9, 2013, paid an inflated price for those shares. Those investors will be entitled to compensation,'' he said.
Maurice Blackburn is working with International Litigation Funding Partners to talk to shareholders considering taking legal action.