Reinsurance contributes greatly to Bermuda's
economy, but it could come at a price.
Sustainable development issues are filtering into Bermuda's largest employer, International Business, impacting the long-term growth of the burgeoning reinsurance industry.With the limited pool of experienced personnel on the island, new companies must try to entice employees from established companies if they want to be up and running immediately. But established companies are unwilling to lose employees and have instituted golden handcuffs to retain them.
According to Jim Bryce, CEO of IPC Re, “We have already lost one junior officer and an administrative clerk to the new companies. Due to housing shortages, rents are starting to become exorbitant. If companies wish to keep key employees or attract new employees, they are beginning to implement or look at providing retention bonuses.
Headhunter services have escalated to attract the best. Therefore, the costs of operating in Bermuda are greatly increasing and run the risk of becoming a competitive disadvantage for Bermuda in the long term.”
The Bermuda Government is facing serious political problems because of the number of expatriate workers that have come to the island since 2001. Consequently, the immigration process is taking much longer as applications are scrutinised; further fuelling the employee merry-go-round.
Bermuda's infrastructure is under strain. The widening divide between the “haves” and “have-nots” has created an undercurrent of hostility. Schools are full, xenophobia is increasing, housing is in short supply, and pollution is rising as Bermuda's roads become increasingly overcrowded.
Bermuda cannot afford to alienate the reinsurance sector because of its massive employment base. Neither can it afford to keep growing because its once delicately balanced natural resources are being destroyed. Bermuda is an island that collects rain for water, relies on container ships for supplies, and has a limited landmass. If it continues to allow more companies to come to the island, it may deplete its resources. But, if it closes its doors to the reinsurance sector, other jurisdictions will pick up where Bermuda left off.