The Bank of Montreal (BMO) has revealed that it was hit by CAD 25 million (USD 19 million) of reinsurance claims from the Japanese typhoons in 2019, which occurred just week’s after its decision to wind down its reinsurance business.
BMO underwrites reinsurance, including catastrophe risk, through its BMO Reinsurance Limited (BMO Re) vehicle in Barbados.
However, the Bank said back in August 2019 that it intended to exit reinsurance business, citing concerns about climate change and inadequate returns.
CEO Darryl White explained at the time that recent heavy catastrophe loss years meant the reinsurance sector no longer looked as attractive as it once did.
Now, it appears the Bank’s decision will be reinforced, given that it incurred a large reinsurance hit from natural catastrophes last year.
The loss was announced as part of BMO’s results for the fourth quarter of 2019, which ran from August to October 2019. BMO’s net income for the Q4 period was CAD 1.6 billion (USD 1.2 billion).
This reporting period means the results could potentially include losses from both Typhoon Faxai and Typhoon Hagibis, which occurred in early September and October, respectively.
