Report: Bermuda Becoming ‘Overcrowded’
Mounting competition from Europe and changing market conditions are not the only reasons Bermuda’s re/insurance sector is unlikely to undergo any further growth spurts — the island is increasingly viewed as “overcrowded” and can no longer easily attract top industry professionals because of issues associated with work permit restrictions, schools and housing, a leading trade publication reports today [Jan.31].
In a major report on the Bermuda market appearing in the most recent edition of “Reactions”, key players in the island’s re/insurance sector as well as ratings agency analysts say it’s unlikely there will ever be a rush of new companies forming on the island to take advantage of market dislocations such as occurred after 9/11 or Hurricane Katrina in 2005.
“It is possible that Bermuda has run out of space for any more new bricks and mortar companies, anyway,” says the magazine. “There’s a growing feeling that the island has become overcrowded with too many ‘social’ restrictions on ex-patriate management and employees.
“It is difficult to get work permits, to enrol your children into schools and even to rent an apartment or get a car. It is a small place that has to care for its own people,” the magazine quotes a Standard & Poor analyst as saying. “That is why a lot of companies — for example the class of 2005 — now have their staff commuting in on Monday and leaving on Friday. It is difficult if you have a family.”
Alistair McNeish, managing director at PricewaterhouseCoopers Human Capital Consulting in Bermuda, told the magazine the island had traditionally attracted leading insurance professionals from around the world.
“However, over the past two years, it has become increasingly difficult to attract and retain professionals and their families to Bermuda,” he says. “The global recession, excess of capital and softening market conditions have obviously limited recruitment opportunities available here.
“Corporate redomestication and heightened competition from other centres such as Zurich, as well as opportunities in the growing Asian markets, have also had an effect. Although the Bermuda Government is supportive of international business, they are wholly mindful of the economic challenges facing many locals who have lost jobs, and, therefore, the added challenges in securing and retaining work permits has not made the task of bringing new talent to the island any easier.”
Another Standard & Poor analyst told the magazine ”Bermuda is a business-friendly place compared to most offshore jurisdictions” and wants to foster further growth in the sector – but the island simply may have reached its capacity as an off-shore re/insurance domicile.
“ The (PLP) Government and the opposition parties agree that Bermuda needs international business,” he said. “They all want companies to stay and they want to attract more. No-one wants to kill the goose that laid the golden egg.”
The full “Reactions” article can be read at its subscription website.
Last week the magazine carried a long interview with Flagstone Re CEO David Brown, who told “Reactions” he remained optimistic Bermuda would retain its reputation as the off-shore domicile of choice for catastrophe reinsurance companies.
There is plenty of room for growth going by the huge amount of empty commercial real estate available in Hamilton. We have to sort out the immigration issue and make the process fairer and more efficient. Term limits have been a negative impact on real job creation is some employment categories.
We should totally eliminate work permits for all IB jobs but do a detailed background check for security reasons.The hospitality industry needs to continue to protect the rights of hard working Bermudians and ensure that proper training is available .
How dear you discriminate industries! ALL sectors of employment needs to be protected so that Bermudians can be ensured employment.
At 65,000 people on 22 square miles, we are the third most densely populated place on earth, yeah it’s overcrowded alright.
I guess you haven’t been to Manhattan, Hong Kong, Mexico City, Shanghai, Mumbai, etc. then?
That is irrelevant to the fact that Bermuda is overcrowded. Just because another place is more crowded, does not negate the fact that Bermuda is overcrowded.
As of 2009, Bermuda was actually the eighth most densely populated country in the world – still no good but also take the basic statistics into consideration… accurate research is key before making assumptions. BTW – Singapore is apparently number 3…
The world has changed and Bermuda has not paid attention. IB will never come back to the levels of pre 2010. That’s a financial fact and cannot be fought or changed. There are many cheaper alternatives for many of the jobs that used to be here, or the high paying jobs have moved to other locations. A post recession will not suddenly result in an upsurge in jobs or tourists. For tourists, read the ads from the islands to the South. 5 nights for $900, kids stay free for example, and that is high Season – Bermuda’s low. What’s the answer? Ask the PLP Governemnt, they’re the ones in charge and don’t care what others think or say.
everybody is thinking it but not saying/admitting the cold hard truth.
WE’RE FINISHED……DONE…..THROUGH.
Are you still here? Please leave. You are taking-up some much needed space!
Negative comments like yours never achieve anything. Life is cyclic and yes, the Island is overcrowded, but there is always a solution and if we all work together we can, I am sure, make Bermuda into a first class Island once again – perhaps not for the reinsurance industry, but who know what else may come along. All it takes is hard work and a joint commitment on the part of all Bermudians.
Tourism will never be the same. All-inclusive Toronto to Cuba stay in a 4 star hotel for a week $735.