Minister Welcomes New Class 4 Reinsurer
“Official incorporation statistics indicate that over the last five years, eight highly-capitalised reinsurers holding Class 4 licenses issued by the Bermuda Monetary Authority, have selected Bermuda as their domicile,” said a statement from Government.
“These formations represent an aggregate of more than $8 billion in fresh capital dedicated to the Bermuda reinsurance industry, which is regarded as one of the top three reinsurance centres in the world.”
Commenting on the trend and the formation of the latest company, PaCRe ,Minister of Business Development and Tourism Wayne Furbert said it was an indication of the “strong vote of confidence in Bermuda as a leading financial jurisdiction”.
Minister Furbert said, “The Government of Bermuda is pleased to have learned of the announcement by Validus Holdings, Ltd. of the capitalisation of a new Bermuda Class 4 reinsurer, PαCRe. This is yet another example of the confidence that the insurance industry has shown in Bermuda.
“Their investment continues to make Bermuda the jurisdiction of choice. The Government is determined to ensure that Bermuda is welcoming to international business, and that Bermuda is open to and open for business.”
The arrival of PaCRe comes on the heels of the formation of Third Point Re, another Class 4 reinsurer formed earlier this year.
Ed Noonan, Chairman and CEO of Validus Holdings, Ltd. said, “Bermuda’s combination of strong regulatory oversight, receptivity to new companies and pre-eminence as the knowledge centre for global catastrophe risk has been critical to our success as a company and our ability to continue to grow and attract new investment capital to our business.
“Validus is proud of its excellent Bermudian employee base, and continues to see a bright future for International Business on the Island.”
Shadow Minister of Finance Bob Richards said, “We are very pleased to hear of the formation of another heavily capitalized reinsurance company in Bermuda. These events actually reconfirm the economic realities we have been pointing out to the Bermudian public for quite sometime.
“That reality is that Bermuda’s reinsurance business has been strong over the period from 2007 until today, having been resilient to the shocks experienced by the rest of the global financial community in 2008 and resuming growth thereafter.
“The Washington D.C. based Albright-Stonebridge Group made this determination in their report on Bermuda’s business activity with the United States overthat period.
“The issue for Bermudians is not so much the capital that is deployed by these companies, but how many Bermuda based jobs does it produce. During the past four years reinsurance capital has increased but the industry has shed jobs in Bermuda. That is the key issue for Bermudians.
“Until Bermuda changes its policy on term limits and reforms its immigration practices, new capital formation in the reinsurance industry in Bermuda will have minimal effect on jobs in Bermuda. It is through job creation that this capital has impact on Bermudians, creating Bermudian jobs, increasing incomes, opportunity and prosperity.
“The OBA plan will address these key immigration issues thus enabling job creation and a return to prosperity for our island home,” concluded Mr Richards.
Hell any news is good news. But the question remains: how many jobs will PACre create?
More than if there were NOT here right.
This is creating as many jobs as the new Par-la-Ville hotel.
Well if I had 50 jobs available, subtracted 25 and added 0 is that more jobs? No! So basically this is just a patch up from the damage Burch did. So we’re still running in place like we have been for the decade (because not everything the plp did was bad/wrong/f@cked up/unethical). I really don’t give a damn who runs our country, but we need to get back on track.
Absolutely NO JOBS….the Gov’t should find out what a sidecar is before they make a statement like this. A sidecar is merely money/capital from a third party (Paulson and Co) being underwritten by the CURRENT and already in place Underwriters at Validus Re.
No new people hired at all as that’s one of the main benefits of a sidecar.
Insider is completely correct, not one job will b created by PaCRe (or any of the other sidecars formed over the lest few years).
However I can’t help but think that this Gov’t understands exactly what a sidecar is and is not. This announcement by Gov’t is just cynical manipulation of the facts to gain a couple votes from the less well informed among us.
LMAO, you all really think this will create no jobs. OK Buddy.
500 million, poof in the air, no jobs needed none at all. Are they going to do the underwriting in India?
You may find this odd, but yes, a lot of the more junior underwriting jobs that were in Bermuda are now in India and Canada. The internet has changed IB business, just as retail has changed. Same reason companies don’t need masses of accountants physically in Bermuda. Cheaper to have them elsewhere. You mght like to ask where are the people who handle the Government’s health claims. If Government can outsource and not be concerned about jobs for Bermudians, then forget about worrying about the Private Sector.
Obviously you don’t understand what a sidecar is either…read up first. The $500M will be managed by Validus Re’s current employees and Underwriters….like I already said. No new Underwriters needed – that’s the whole point of a side car – using the experienced underwriters/management already in place.
You guys are FUNNY. yet when ACE and a few other companies redomiciled and kept the jobs here you all complained saying IB is leaving etc… But I remember a record number of SPI insurers set up shop here (domicle) this year all of a sudden “it doesnt matter, it doesnt create jobs”.
THE INSURANCE MODEL HAS CHANGED…. WE WILL NOT SEE XL or ACE type set up in the near future or even ever.
BERMUDA IS STILL ATTRACTING BUSINESS… it creates work for law firms etc…
I bet if the OBA was in power and the same thing occurred you would be praising them.
You know, in all honestly, I am starting to realize the type of people that live on this island. I was naive at first, but since looking at Bernews and RG posts… I am starting to see a particular type of people I did not know exist on this island…
Interesting indeed… but in all honesty, its getting a little tired.
Your remark about realising what type of people live here really hit home with me !
The day after the 2007 election I spoke to an IB bigwig manager (expat) who said that he and many of his colleagues had just had the same epiphany in their train of thought . In utter disbelief that after the shockingly racist campaign that they ran and a p*ss poor track record the PLP should get re-elected demonstrated to them that , indeed , the locals (or at least 53% of them) were not at all who they thought. In preparation for the inevitable , he started downsizing his company before the end of 2007 !
Interesting, the few IB CEO’s I have interacted with, understand that politics is just politics. Similar to the US (i.e. the elimation of ‘tax havens’.
The IB people I talk to are more concerned with the Dems rhetoric regarding the taxation of companies in ‘tax havens’…. The have more important things to deal with as opposed to politically charged rhetoric. Smart business people will see beyond that and dont make business decisions based on emotion.
Interesting how the IB bigwig would actualy downsize based on empty rhetoric as opposed to rhetoric that would change policies to do business. I wonder how the stockholders felt about the decision.
They tell you what YOU want to hear so they don’t end up getting spat on ,threatened by permit hardships or a whole load of expat bashing crap thrown at them.
What they ‘us’ is very different .
What makes you think I am Bermudian?
The only thing I would like to know is where do I send my resume? 10 years experience in the underwriting and accounting industry with exposure to Captive Management and Claims.
I work in IB.We’re shedding jobs and outsourcing most infrastructure to Canada and the USA.This is a misleading announcement plain and simple.
Unfortunately jobs are leaving (the freight companies are making more money from goods leaving the island than from goods arriving). Companies are downsizing their local operations and expanding off island.
As for PacRe, I’m glad to see some activity here but anybody that thinks this will result in an influx of jobs doesn’t understand the nature of the beast – government fees definitely as well as audit and actuarial fees but not a host of jobs.
You guys are funny. OBA Shadow Minister Bob Richards says: “We are very pleased to hear of the formation of another heavily capitalized reinsurance company in Bermuda. These events actually reconfirm the economic realities we have been pointing out to the Bermudian public for quite sometime. That reality is that Bermuda’s reinsurance business has been strong over the period from 2007 until today, having been resilient to the shocks experienced by the rest of the global financial community in 2008 and resuming growth thereafter”
The funny thing is not too long ago he was shouting the complete opposite (including the whole of the OBA)!!!
A few examples:
January 20th – Once you subtract the number of Bermuda-based companies that liquidated during 2011, it was the worst year in 11 years, Shadow Finance Minister Bob Richards said.
MArch 2nd – We are facing the greatest economic disaster in Bermuda’s history, Shadow Finance Minister Bob Richards said this morning.
January 15th – This week, the Government is trumpeting 53 new companies coming to Bermuda. This is a classic example of PLP Government spin misleading Bermuda once again to think that the economy is better than it is. Spin serves no purpose but that of the spinner.
December 14th – We are living with the consequences of a government that has lost control of the public purse and put the Island on a path to financial ruin.
So which is it????? IB is going up or down? Cause quite frankly, according to Bob its doing good!! Now that is a flip flop!!
Bob Richards is killing the OBA. If OBA lose the next election, it will be his fault because of the random comments that role from his lips.
The examples you listed actually support what Bob has just said and for which you critisize him. There is no inconsistency except in your mind. Just remember IB is more than just Insurance/Reinsurance companies. IB is not strictly the main pillar, but multiple pillars. The new sidecar type entities sound great with their multi million dollar capitalizations, but only generate some Government fees and lawyers fees. Maybe one or two minor jobs. They are not an ACE or X/L.
Not sure how the coments i listed support what he said above. I just don’t see it that way. Sorry.
I’d reply to his/her statement, but you can’t fix stupid/ignorant…can’t stop them from breeding either. Some people see simply black and white and are incapable of seeing the grey area.
IB is going down Can’t take it anymore but it is nice to see capital coming in no matter if there are no jobs attached. Validus will handle the underwriting from within their existing platform…..thats what a sidecar does…..it is, in effect an existing company doing the underwriting for the capital of someone else…and to Rory you left out that the footprint of ACE and XL is much less than it was a few years ago….XL is renting out part of its building as they have fewer staff and do not need room for expansion while ACE is down from over 400 people to over 200…one side cannot tell all of the story…merely politicos touting anything positive and the opposite side pointing out the negative…empty restaurants, vacant apartments and office space are a more telling story than a sidecar or other spv….
I feel where you are coming from Navin. I just do not think Bermuda is as far down as the few fear promotors would have us think. I truely think we will pull through these times, and when we do people will come up with all sorts of excuses and opinions. But what I think is fact is that no matter who is in charge, PLP, OBA or UBP, we will still recover. Sad thing is whichever party is in, they will claim bragging rights over that economic victory.
Also @ Voice of Reason – Validus Re has all their cat modelers in Waterloo, Canada now. Aspen Re has some of there’s in Connecticut now. Axis Re has theirs in Zurich, Switzerland now, Flagstone Re outsources theirs to Hyderbad, India… to name a few.
So jobs have been outsourced – don’t try to trick the voters.
But they have to decieve us…we can’t think for ourselves…