‘Aon Assessment Without Solid Foundation’
Premier Paula Cox responded to the report issued by Aon which downgraded Bermuda, saying: “The Aon assessment is without solid foundation. The Government does not accept this position as it flies in the face of internationally respected ratings agencies…”
Premier Cox, also the Minister of Finance, cited two other recent assessments by ratings agencies: “As reported, Bermuda is clearly being painted with a broad brush and the Aon assessment is without solid foundation. The Government does not accept this position as it flies in the face of internationally respected ratings agencies, especially considering that on November 22, 2010 Fitch concluded its rating action on Bermuda and affirmed Bermuda’s AA+ rating which is one notch below the highest rating of AAA.”
“Also on September 7th, 2010 Standard & Poor’s reaffirmed Bermuda’s double-A rating and revised its outlook on Bermuda to stable from negative. The rating actions were made in these challenging economic conditions when many countries’ ratings were actually being downgraded.”
“I think that it should be also noted that Aon’s quoted statement states that; ‘For example, we have seen 13 island nations move into a higher risk category this year because of the effect of a decline in tourism on their economy.’ which could be seen as a fair assessment but does not recognise that Bermuda relies less on Tourism and more on insurance and international business,“ concluded the Premier.
In September 2010 Standard & Poor’s had predicted our debt would rise, however said Bermuda is one of the least indebted sovereigns they rate: “We expect Bermuda’s net general government debt will rise as shrinking fiscal deficits continue, but will not exceed 4% of GDP by 2013. The island will thus remain one of the least-indebted sovereigns we rate.”
“Bermuda’s sovereign ratings are supported by its strong institutions, an extremely high per capita income, sustained sizeable current account surpluses and a low public debt burden compared with peers,” said Fitch Ratings in November 2010. “Bermuda’s credit weakness is its small and narrow economic base, which weakens its ability to absorb economic shocks compared with other high-grade sovereigns.”
Yesterday Shadow Finance Minister Bob Richards said: “Aon has looked at our situation and concluded that Bermuda is a riskier proposition than before. It is an outsider’s view of a declining economy that is costing people their jobs, shrinking their paycheques and making life much more uncertain than it needs to be. We are very concerned.”
Bermuda was one of 19 countries downgraded in Aon’s 2011 Political Risk Map, its benchmark annual review of political and economic risks. Aon Corporation lowered Bermuda’s rating from a low-risk jurisdiction to medium low-risk, which is Aon’s second-highest rating.
Other countries downgraded by Aon include Antigua & Barbuda, Bahamas, Barbados, Cayman Islands, Comoros, Dominica, Grenada, Greenland, Antilles, St Vincent, Trinidad, St. Lucia and St. Kitts & Nevis, Algeria, Benin, Myanmar, Iceland, and Bahrain.
The Premier has removed her head in the Bermuda sand long enough to go to Egypt to continue her cruise on DeNile.
SSDD.
For once I’d like to hear -
“I am deeply saddened to hear this. As premier I will fix this by:
[insert points here]“
I think somebody is delusional. The people of this island need to be told the TRUTH! Stop BSing with people’s lives and family’s. They are not stupid like you think they are! The shrinking paychecks do not LIE!!!
The disasterous policies of the PLP govt are now coming home to roost. This is just the beginning.
But what about the estimated $100,000/day interest owing on our national debt. Can we sustain that level of payment on interest let alone principal?
Slap me, I must be dreaming
She also touches solely on the financial aspects of the rating. Aon’s rating is one of ‘political risk’ which puts includes things like crime and long term stability for long term business. I’d like to see her try and make excuses for the rising crime and diminishing number of internationals on the island as well.
Welcome, ladies and gentlemen, to the Third World.
Since the PLP=UBP what do you expect?
Here we go again on the merry go round of accountability and denial – WAKE UP BERMUDA! Read my letter to the editor in todays RG Economy Fixes…
I’m am inclined to not beleive the Government on this one. Like I said before it seems that no one else knows what they are talking about except the Government which needs our votes to stay in power who are they trying to kid.
LOL
No surprise that a politician (especially one representing the xenophobic PLP) will disagree with anyone who dares to negatively assess the political risk of the jurisdiction.
As with most other criticism concerning this Government, the likelihood of acknowledging the veracity of any negative remarks will always be trumped by the PLP’s larger motive of self preservation – even if detrimental to the island as a whole. Party before country.
This attitude of course flies in the face of their own mission statement: “In government, we have done our best to put people first and build an economy that works for all Bermudians” … unless by “people” they mean a handful of insiders and/or the party hierarchy.
What was failed to be mentioned here is that AON is a world wide company and simply rated Bermuda among many other countries they do business with. What would be interesting to see is what countries were not down graded and maybe Bermuda can look at them and see what we are missing. But that would also assume we have accepted our current political situation and are looking to develop which I’m not sure is the case. The PLP seems quite content to let the current situation ride itself out, where ever that may me, and go from there. But, as always, without being proactive and having foresight in these types of situations, nothing good usually comes out of it. Hopefully we aren’t the next Jamaica or DR.
SMH
at long last she comes out of hiding and says something. of course its all gobbledeegook and they are wrong and blah blah. The Government always knows the wrong thing to say or do and never the right way. Be nice to hear someone say “We are of course concerned and are attempting to reach AON. Meanwhile the people just keep leaving slowly but surely just the way Former Fearless Leader wanted….
It’s nice that she finally decided to use her words, but she sounds hopelessly naive and pitifully defiant.
I am quite familiar with the Aon group and I can tell you from experience that there have been over the years individuals in the upper management of Aon [edited]
I am confident that, as far as the individuals at Aon of whom I speak are concerned, it could be [edited]
Ask any black Bermudian working at Aon how they feel!
Dude your full of it I happen to know some black Bermudians at Aon as well and they are happy. Racism can’t be the answer for everything and a dislike for the PLP please I think you might have a predisposition I just don’t know if it’s white people or IB….
LOL
They criticized the PLP, so they must be racist.. Is that the best rebuttal you can come up with…
This is a major player in the financial field and having nothing to gain by “disrespecting” the PLP Govt. They are not part of your mythical “combined opposition.” Please provide more examples as to how Aon has “continually disrespected Bermuda and in particular, the PLP Government.”
Do you ever get bored of blaming any and all shortcomings on your skin color?
I guess reality has an ant-PLP bias…
I guess Aon figures that the African countries which they upgraded (Kenya, Mozambique, Rwanda etc.) at the same time they downgraded Bermuda are predominantly white countries then? Wow maybe they are idiots..
Not everything is as simple as race…maybe for simple minds it is…GROW UP!!
OMG….. UNBELIEVABLE. Well, on second thought, no it’s not.
That’s the sad thing it isn’t unbelievable when people just point to racism each and everytime there is a criticism of the ruling party…all that does is shut down any rational thinking in some people’s minds…and that is dangerous for everyone in this island…
Malachi what local people at AON think of Bermuda had absolutely ZERO input on the report that AON issued…Bermuda is a dot on AON’s map as they have 45,000 Employees in over a hundred countries and the people in the division who inked the report are totally autonomous from Bermuda. The Government always trots out reports from Fitch or S&P the same agencies involved with Enron, Worldcom, etc. they are not always accurate…Would you give your money to the PLP to invest for you? although I suppose you already have as have we all..God help us….
Listen..many of you do not realize the mentality of some of our exempt…thye are not ALL Bermuda friendly! You’d be surprised how many devious companies we have here.
Note the latest comments from A. M Best……Bermuda is going just fine! And A.M. Best have a far more credible track record than the likes of Aon. I wish I could explain my statements a little more…….but then I would give away mu identity!
They said BDA’s reinsurance factor will be just fine…it did not state that the BDA economy would be…big difference…
Bermuda
Population: 64,566
Capital City: Hamilton
CURRENT RISK LEVEL:
Medium-Low Risk
Ireland
Population: 4,470,700
Capital City: Dublin
CURRENT RISK LEVEL:
Low Risk
Current Risk Factors:
Strike, Riot, Civil Commotion, Terrorism
Sovereign Non-Payment
United Kingdom
Population: 61,792,000
Capital City: London
Current Risk Level
Low Risk
Current Risk Factors
Strike, Riot, Civil Commotion, Terrorism
United States
Population: 310,617,000
Capital City: Washington, DC
Current Risk Level: Low Risk
Current Risk Factors
Strike, Riot, Civil Commotion, Terrorism
What?
But Senator why are Bermuda’s current risk factors been omitted from your example? Strange that…
Also, Senator do you think that the countries listed operate solely on one economic pillar such as Bermuda and also have the ability to print additional $$$ if needed? And also, how come you didn’t list the predominantly black African countries which have been upgraded? Funny how you are so selective in your postings. Hilarious actually…
Unfortunately for the good Senator as people begin to lose their jobs, homes and disposable income, race baiting is becoming obsolete as people start to realize that not all criticisms of the present government are racist and fear mongering.
[edited]
Bermuda
Population:64,566
Capital City: Hamilton.
CURRENT RISK LEVEL.
Medium- low.
Current risk factors.
Civil commotion, strike, riot, Govenor calling in the Government.
Gun violence, strike.
Ummm, they’ve been omitted from the Senator’s example because AON did not provide the risk factors in spite of our downgrade. Also, the crises of economics in the other countries listed have been well documented however they are still listed as Low Risk. Granted our economy is nowhere near the size of the UK, US or even Ireland, it is curious as to why we have been singled out and no explanation given.
Funny, the only person to make this a racial thing is you…
Yeah yeah yeah…
You know full well juts like I do that Senator Furbert’s arguments for anything is based on race…
Her post (IMHO) was simply to put Bermuda, with its no list of current risk factors, next to a bunch of predominantly white countries with their listed current risk factors, to try and say, “how come Bermuda with no risk factors falls in a higher risk category as compared to white countries that do have current risk factors?” Must be racist.
We all have heard her justifications, rebuttals and arguments for anything and anybody that dares to be “blasphemous” regarding the PLP..
That’s real talk…
PS: Malachi turned into a race issue…not me my friend…
In a certain someone’s eyes is that if the PLP fails then the Black man fails.that is why they supported Dr.Brown in every instance. He could have committed murder and they would be right up there promoting herself first… then, well you know who.they a horse with blinkers on just like the Col. COUNTRY FIRST, PARTY SECOND. BLACK OR WHITE.
At least a horse with blinkers on can see what lies ahead. i think their blinkers have been over their eyes…
We haven’t been singled out…they also downgraded numerous Caribbean destinations as stated in the original article….stop trying to fabricate the truth for your own arguments sake…
What was premier cox thinking of to select lavern as a senator ??
I don’t see the point of this post except it highlights that of the 4 examples she has chosen, Bermuda has a Current Risk Level of Medium-Low which is worse than the other 3. Why would LaVerne Furbert pick out the fact that Bermuda is high risk when the Minister of Finance is at pains to show Aon’s report is wrong?
The census is not done…so what really is our population and our demographics?
And is your point that the risk factor is higher in Bermuda than the US,UK and Ireland? Why not throw Switzerland in and then its not hard to understand why companies and people are fleeing Bermuda and choosing not to come..What about the Risk factors for Bermuda that you omit? Strike? never happen in Bermuda at least not this week so far? Riot? not yet but wait until the true unemployment figures come out. Terrorism? well so far the gangs have been killing each other but wait until a stray bullet hits an innocent.
that’s right Navin, just the point i am trying to get across. Just ask the average man in the street, BERMUDIAN THAT IS!
Senator Furber my apologies for the incinuation that you purposefully omitted the current risk factors for BDA as they are not listed in the actual article.
But the incinuation that BDA’s downgrade is due to some racist sentiment by the company in question is simply a cop out in my opinion.
All those countries you listed in comparison to Bermuda have a tax base of millions of citizens and economies that do not rely on one flimsy economic pillar such as BDA. They also possess central banks which are able to easily print off additional currency if required to meet debt obligations.
Bermuda has none of those advantages. So add that together with the fact that we have an out of control debt situation brought on by this Govt and then I can understand why some investors view us with wary eyes. What are we paying now per day in interest payments to our creditors? And what is our budget and current revenue levels? It is not hard to see why the downgrade occurred IMHO.
Again. Where has Senator Furbert (or anybody else for that matter) alluded to the fact that race had ANYTHING to do with the ratings downgrade? From where I sit the only person who has made this ‘racial’ is you, tired of nonsense.
Malachi in his original post, which has been sinced edited, claimed that AOn was a racist company that has “continually disrespected Bermuda and in particular the PLP.” He stated that he has plenty of examples to justify his claim. As mentioned Bernews has since edited the post, hence the [edited] within his post.
Why exactly do you think that LOL responded the way he did to his post?
In regards to my claim on Senator Furbert…well I will let her past “rebuttals” speak for her…again that is real talk..
No disrespect but, Paula, either your facts are wrong, the market is wrong or there is no competency at the even the highest levels of government.
Here’s why. 13july 2010, you locked Bermuda into a 500mm 10 year note at 5.60 post yield whisper. On the same date, AA Industrials were trading at 4.55 in yield. That means you (at the time MoF) locked Bermuda into a deal where we paid well over 105 basis points compared to what an average AA company would have paid. Bermuda even paid way over what a single A or triple B company would have paid on that date (5.05%).
In other words, the market rates Bermuda as Sub BBB. but, please remember it does not matter what rating agencies rate us anyway, it matters how much you costs us. NO point in being rated AA+ if you can’t get the financing, know what i’m saying?
Please tell me I’m wrong, but with Bermuda growing last year -8% gdp, there’s no way this govt will be able to return or (Bermuda to grow) at +5.6% for 10 years in order to pay this off. No way. This is one example of the cost of incompetence. You dug us deep into a hole and it getting deeper.
Aceb, it is always soo much better to present an argument with real facts rather than emotion & heresay but, for the common folks like me who understand the basics of running a small business, is there any way to word your post in terms that a few more of the comman folk can understand.
It has been quite obvious that the Finance Minister & advisors have no clue either of the lofty world of finance. It just looks to me that they signed off on an interst rate way above what they should have.
There’s a simple answer to that query/post…
The market is racist…Ask Malachi as I am pretty sure he can give you examples of how the market has continually disrespected Bermuda and in particular the PLP Govt….
Well how many PLP members have had profitable functioning businesses??? How many said they were the head of the union (working for the working man) now they set the rules they(the unions ) have to abid by…. Hypocrites….
First thing PLP did was give themselves a raise and give Bermuda b#%lshit holiday to slip thru …. With the level of wellrounded acting, Paula should be paid per performance, I am sure she feels that running a country of 60000 is more important than the President of the USA running a country of 300 million in monetary terms..
You are WRONG Premier…just like you were wrong to run up the debt as Minister of Finance. It is very amusing for you to even pass comment on the ratings that have been done all countries of the world for many years. When are you going to leave your little Ivory tower in Lala land?^^
A0n’s Annual Report on Boat Sinking Risks:
An Aircraft Carrier
Length: 1,092 feet (332.8 m)
Current Risk Level
Low Risk
Current Risk Factors
Mutiny, global warfare, torpedoes, explosions, running aground
A coast guard medium endurance cutter
Length: 282 ft
Current Risk Level
Low Risk
Current Risk Factors
Mutiny, icebergs, running aground, being rammed by rogue fishing boats
A rowboat
Length: 5 ft
Current Risk Level
Medium-Low
Current Risk Factors
But wait. How could a rowboat have higher risk than an aircraft carrier or a medium endurance cutter when no risk factors are listed?
what the guy above me said.
the hole is getting deeper and this government just keeps digging.