The value of International Business to Bermuda

[Jenny]

The Bermuda insurance trade association is out with their annual survey detailing just how much of an exodus we have been observing.  The Lt Colonel’s chickens are coming home to roost as his goal of ridding the island of the re/insurance industry is accomplished.

A few facts.

• 2/3 of employees of re/insurance companies in Bermuda are Bermudian.
• The average employee of a re/insurance company makes $419,000 in salary and benefits a year.  The average is skewed by the senior executives, but still, these are wages far higher than any other industry.
• Overall the re/insurance industry contributes a billion dollars to the island’s economy
• Employment by the 22 ABIR members is down 23% (about equally Bermudians and foreigners), and over 50 executives have left in just the past year.  Couple that with the loss of all but two executives at XL in recent years.
  

Part of this is the natural evolution of the businesses from small start-ups to global enterprises.  But a big part of it is Immigration policy.  I know that from mine own eyes.  Why go through a complicated and overwrought system with an uncertain outcome run by hostile people when you could go work in the UK, Ireland, or the US, with just a simple form to fill out?  

The problem is not the individuals who can buy PRC status for $100K if they are “job creators”.  I talked to a well-known individual who is eligible for that and he called it “a joke”, in part because of the ridiculous expense (“I’m rich but not stupid”) and because his kids and grandkids would lose it as soon as they go to college, since there’s a continuous residency requirement.  That program was meaningless, despite the hoopla that surrounded it.  Generally, the more the hoopla, the less substantive the change.  

The problem is a level or two below the CEO, the Vice Presidents and Senior Vice Presidents.  They’re the ones who are mid-career with kids in middle school and wives who would rather be in their homeland.  They (and the wives) complain to the CEO about all the issues Bermuda Immigration creates.  Cox talks about this “red carpet”.  Baloney.  The Bermuda government does everything they can to make it hard for individuals to establish themselves here.  By the way, don’t deny the influence of the wives who are denied the right to work here in causing the husbands to want to leave, even though nobody talks about this.  Eventually the situation becomes untenable and the executive leaves the island, but the company wants to retain them, so the job moves.  That job will never come back.  Say it’s the head of Investments who goes to NYC.  The whole investments team, plus the accountants and legal people, all end up there.  The successor ends up being an American rather than a Bermudian, and the job has been permanently lost.

Bermuda’s government needs a big turnaround, else the bleeding will continue.  Of course, no executive would tell the Bermuda government that, and they’ll make excuses and say polite things as they pack up the container and slip off into the sunset.  Deny what I say at your own peril.  Don’t expect the economy to get better unless there’s a substantial turnaround in attitudes and policies towards foreigners and business.

[Paget]

Good post. You are correct, the wife network is powerful. That is what happens when you put together a group of rich and idle women.

I used to get more corporate news and gossip from my wife than i would get from my own professional network.

[Mike]

Welcome 8675309, that's an awesome first post.   

"Deny what I say at your own peril."

No, I'm just going to take it on board. 

However, the arrogance of the Bermuda Government will surely get in the way of them doing so.

[Jenny]

A broker that I work with a lot in the US was telling me about my post, how it had been circulating by email among the broker community.  Kinda felt a bit funny.  Apparently the email also included this article discussing the need for radical reform.  Let me add a few ideas.  Perhaps government needs only to apply these rules to re/insurers or other international businesses, and to employees who are officers of the company or otherwise mid/senior, as I can see how some could be abused.  Still, that's a small price to pay for keeping a lucrative industry in Bermuda. 

1) Automatic approval of permit for the nanny and other caregivers or household staff

2) Automatic approval of right to work (without seeking a permit separately) for the spouse and children (if applicable).  As I've said, I think the biggest risk to Bermuda isn't that the CEO's work permit gets denied.  It's that the wives of the mid/senior executives, who all talk to each other, decide they've had enough and drag their husbands back to the UK or US.

3) Work permit process entirely online and require no more than a couple of documents.  If it can't be submitted online, you don't need it.  Get rid of the TB test, doctor's letter, reference letters, notarized stuff, etc.  It's the company's duty to vet their employees' health and character, not the government's. 

4) Extend the validity of an ad from 90 days to as long as it takes to identify the right candidate provided a search is actively conducted.  Often the ad "expires" before the application is submitted and hence the ad has to be re-run.  But once a foreigner has been given an offer, there's really no chance that offer will be revoked, and hence the re-run ad gives Bermudians false hope.

5) Post average processing times online for all to see, and stick to them. 

6) Allow employers automatic right to transfer jobs into Bermuda with nothing more than a letter to explain it - no ads, no application, etc..  If the employer wants to move a job here, LET THEM!  In fact, send them a letter of thanks.

Interestingly, the Insurance Insider is reporting that the CEO of Validus Re recently left the company because he wanted to get out of Bermuda.  Just one of many recently.

[Mike]

8, you're spot on.

However, this is Bermuda we are talking about.  They won't do these basic things, they'll just talk about it until the barn is empty.  

Conan Ward at Validus  and president Bill Jewett at Endurance pull the pin on the same day this month... "This is the end my only friend, the end of our elaborate plans"

[Old Hand]

Very good posts by 8675309.  I am in the position of having a husband who is exempt from term limits but.............. my work permit although tied in with his has no guarantees.  I am good at what I do, but there's a very good chance that government will turn round at the next WP renewal and tell me that my job can be filled by a Bermudian.  If this happens, i too will be dragging my husband by the ear off the island to wherever I can legally work as well as him.

I love Bermuda (as you will have guessed) but I could not sit idly by at home while he goes to work each day.  It's not just the non-working wives that will nag their husbands to move away, it's also those wives who are working but not in a high level post that grants exemption from term limits that are subject to the whim of the current government.  My job goes, we both go....  Time will tell.

[Jenny]

My job goes, we both go....  Time will tell.

That's what gummint doesn't seem to understand.  It's not just the expats, it's their wives too.  What God hath joined together...

[Pandora]

Excellent read 8675309!

The company I worked for is dependent of the Insurance companies. They were clients. Being a service company in Bermuda is precarious. Bermuda is such a small market with very little new businesses starting up. Not many clients to go around and when those companies down size their market shrinks. The companies with the internet can more easily buy off shore as well and get better value even after import duties. It is not just companies like them but a knock on effect on all the other services and products the execs spend money on.

A friend of mine just moved to Dubai with her husband and kids. She easily got a permit for work and is now freelancing as a creative director. That would never be allowed in Bermuda. It is not about having her husband earn a lot of money so she can be a kept woman. That does not work for most women now.

Down it goes like a house of cards.

[Mike]

... and I take the point about the children too.

I had an after-school job as a teenager and it was one of the most important formative experiences of my life.