ABIR: ‘Continuing Trend Of Job Reductions’
The Association of Bermuda Insurers and Reinsurers [ABIR] released its Seventh Annual Bermuda Economic Impact Survey results, which shows that ABIR members’ directly contribute nearly $1 billion dollars to the Bermuda economy, and also show a “continuing trend of job reductions in Bermuda.
Constantine Iordanou, Chair of the Association’s Board and CEO of ARCH Capital Group, said: “Most worrisome is that the five ABIR members with historically the largest number of employees in Bermuda have reduced their employment during that time by an average of 23%. For these same companies, their average reduction in Bermudian employees is 19.6%.”
Mr Iordonou said the trend is “worrisome for Bermuda’s economy” because it means fewer jobs in Bermuda, lower pay roll tax revenues, less compounding economic activity from the executives, and fewer meetings filling up hotels.
ABIR represents 22 international insurance groups all of which have essential underwriting operations in Bermuda. Twenty one of 22 ABIR members participated in the survey.
The full statement from ABIR is below:
The Association of Bermuda Insurers and Reinsurers today released its Seventh Annual Bermuda Economic Impact Survey results.
The data show that ABIR members’ directly contribute nearly $1 billion dollars to the Bermuda economy, but also show a continuing trend of job reductions in Bermuda. ABIR believes that the aggregate spinoff economic impact of our members in Bermuda is a multiple of that direct $1 billion contribution to Bermuda’s economy.
“ABIR members are a critical part of Bermuda’s economy. We estimate that our membership paid $698 million in salary and benefits to our 1,666 Bermuda based employees. Sixty seven percent – 1,115 — of our employees in Bermuda are Bermudian citizens,” noted Constantine (Dinos) Iordanou, Chair of the Association’s Board and CEO and Chair, President and CEO of ARCH Capital Group.
“Of concern, though,” Iordanou noted, “The key finding of the data is that our employment in Bermuda for the fourth year in a row has declined. This is consistent with the Government’s own data on the reduced number of work permits and job reductions.
“Most worrisome is that the five ABIR members with historically the largest number of employees in Bermuda have reduced their employment during that time by an average of 23%. For these same companies, their average reduction in Bermudian employees is 19.6%.
“This trend is worrisome for Bermuda’s economy because: 1) it means fewer jobs in Bermuda; 2) lower pay roll tax revenues; 3) less compounding economic activity from these highly compensated executives; 4) fewer meetings filling up hotels and restaurants.”
Iordanou noted, “We appreciate the action the Government has taken with regard to the Job Creator’s Act. Accelerated action by the Government to encourage ABIR members to locate senior executives here in Bermuda would be helpful.
As the numbers from our survey demonstrate, there is a direct correlation between these senior executives being in Bermuda and employment opportunities for Bermudians.”
When adding up our travel and entertainment expenses, our payments for business services, our charitable contributions, our real estate costs, plus the payroll, our economic contribution to the Bermuda economy is just under $1 billion — $951 million, noted Bradley Kading, ABIR’s President and Executive Director.
ABIR represents 22 international insurance groups all of which have essential underwriting operations in Bermuda. Twenty one of 22 ABIR members participated in the survey.
Kading noted, “The year 2011 data reflected the continued impacts of a global economy in recovery mode and a soft insurance market; but it also includes a year in which ABIR members in aggregate had 2 marginal earnings and no net capital growth due to the $105 Billion in global natural disaster catastrophe losses.”
Here is a summary of the data:
ABIR Travel and Entertainment Expenses in Bermuda
ABIR members estimated they spent just over $28.3 million in Bermuda on hotels, air fare, restaurants, taxis and catering in 2011, an amount that is up 7% over 2010 expenditures of $26.6 million.ABIR Business Services Expenses in Bermuda
ABIR members estimated in 2011 they spent nearly $86 million in Bermuda on legal, accounting, actuarial, temporary services. This is roughly up $5 million from 2010.ABIR Member Charitable Giving in Bermuda
ABIR members estimated they contributed more than $12 million in 2011 to Bermuda based charities; up from $10.6 million reported for 2010.ABIR Member Construction, Real Estate and Housing Costs
ABIR members estimated they spent in 2011 nearly $121 million on construction, real estate and housing costs in Bermuda. This is up from $116 million in 2010. Construction spending has had great variability over the years.ABIR Member Bermuda Employment
ABIR members reported employing 1,666 full time people in Bermuda in 2011 (down 30 from1,696 reported at year end 2010). The year 2007 was the peak year for our employment in Bermuda; employment is down a total of 116 since then. Of these employees 1,115 are Bermudian citizens. This is down 13 from 2010. The percentage of the ABIR Bermuda employees that were Bermudian in 2011 was 67%. Employee Departures from BermudaWith the 2011 survey for the first time ABIR collected data from members about employee relocations out of Bermuda.
Here’s what we found:
1. During the last calendar year 45 employees left Bermuda to work for their companies outside of Bermuda.
2. Of the larger number of employees that left Bermuda for a variety of reasons (new employer, retirement, reduction in force), 51 were reported to be in Executive/Senior/or Middle Management positions.
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What more should the government due to encourage businesses. From what i have seen the government has done plenty. But this is a capitalist society, and as such most of these companies are all about the bottom line, very little social consciousness. So at the end of the day they want more and more profit, and as little expense as possible. If they can get it done with a skeleton crew then they seem to be willing to do so.
very little social consicousness? are you serious dude? they have done far more to support local charities than anyone could ever imagine and still you dont get it….no wonder they are leaving….while the Government hinders business and tries to shake down investors IB firms have gone above and beyond to support the community…..
navin. a majority of Bermudians are suffering from “lavernitis”and to date there is no cure !!!!!!
“Very little social consciousness???”
Apparently you missed the part of the article where it said IB donated over $12 million to local charities…?
And all of the expat wives who volunteer on a daily basis teaching OUR children how to read….?
According to some, abandon term limits (so in 10 yrs they can be eligaible for status and PRC’s), loosen up restrictions… i.e. must train Bermudians for the position etc…
I personally dont know what else Gov’t can do to balance IB demands, and not neglecting its citizen’s opportunities in IB positions. Slippery slope but IMO the positions from Gov’t and opposition reflect the ideologies. OBA is about business with little regard to the social element. PLP is geared more towards the social aspect of running the country. That is how parties are viewed and how people will vote. Not necessarily about color… It just happens that majority of blacks benefit from social initiatives from Gov’t i.e affordable housing, free day care and college. Many white’s do not and probably many benefit from the rents they get from IB employees in their Res. 2 properties, businesses/resturants they own, thus would vote for a business orientated party.
My 2 cents..
There was never free day care as some continue to spout. That was the promise. It was only ever means tested daycare which in the latest budget has been revised to an even lower level of earnings. And the college tuition thing didn’t last very long either now did it?
You all seem to forget that over 90% of our GDP (you know the thing that creates money for the Govt that enables them to be “socially conscience”. So keep hating and attacking business. See what the end result is.
Oh and the previous Govt built numerous affordable housing projects (i.e. Rockaway, Boaz Island, Ducks Puddle, Happy Valley seniors home etc.) So stop with the misinformation. Also, Grand Atlantic condos are not affordable housing in any sense of the word and apparently the Dockyard developments are going to be $1,600 a month for a one bedroom.
And it is your so called “socially conscience” Government who has cut funding to the much lauded Mirrors Program by $1mn as well as other grants to Salvation Army and several other charities.
Finally of you think only white people own homes down here well then you don’t know a thing about BDA or you have been brainwashed to believe such utter nonsense.
The fact that that the mentioned social programs were initiatives by the Gov’t of the day shows how socially conscience the Govt was. Fact is they had a shortfall in revenue so programs had to be cut.. that is life… same way how revenues fell in IB companies, employees had to be cut.
Regarding my comment regarding whites and home ownership; I never said only whites own houses here did I… The fact remains that if you look at all the Res 2 area in Bermuda, where IB execs are likely to stay, who you think owns majority of the homes? Fairylands, Tuckers Town etc… Who you think feels it MORE when an IB exec leaves BDA? The landlord on Parson’s Road who works 9-5, or the person who owns an extra house in Fairylands, who owns a IT firm who rented his spare property an IB exec… Who would you vote for to protect those interests?
What does the previous Gov’t's housing projects have anything to do with this conversation ‘Hypocrites’? I’m referring to current situations.
It’s to show that the UBP also build affordable housing thus cared for the people of Bermuda as well. Regarding the white people and property thing I think you need to look around the island and not just back of town as blacks who own apartments every where else seem to find IB people to put in the apartments before and in the early years of the PLP Government no problem. Oh and they also own two and three houses for example I personally know quite a few Bermudian black landowners that pack their second and third home with IB and or expat workers. They are just as upset IB is leaving as any white person you seem to know (or think you know). This election will be most likely determined by race as have been all the 2000 elections have been. Like it or not this is one thing that can be attributed to the past just like black Bermuda supporting Obama even though the PLP try to tie themselves to the Democratic Party their views are more republican especially on race (or at least according to the mouth pieces they let speak for them). Also just to be clear most white people I know supported Obama as well on the ground of his message which back then was all inclusive and from what I’ve seen of him that is still true. Compare that to the Brown one which did much damage to race relations through Mr. Commissong (if spelled wrong my apologies). I know this first hand as my wife’s family forgets I’m white sometimes but I’m happy they feel comfortable around me.
LOL
When the bickering amongst ourselves stops Bermuda will rise above it all and return to the shining jewel we once were.
While a lot of the above is true it does not represent a complete thought. Where does the money to pay for these social initiatives come from? The direct and indirect consequence of IB is to allow for the social welfare state of Bermuda to exist in its current form. As such I do not see how protecting the interests of IB are not central to any political parties platform.
As for the citizen’s opportunities in IB they must be created via the Gov’t and families investments in education. The current system does offer some protection (and mostly for the lower paying jobs in IB) but not true advancement for locals on a meaningful scale. Such advancement can only be achieved when locals are the most qualified applicants for “high end” positions. Bermuda is a knowledge based economy with no real resources to develop this knowledge internally (at a post secondary level). As such the government should be investing in scholarship schemes to generate more local talent at the upper echelons of IB. Counting on term limits, etc, will never generate real advancement for locals.
If you’re not currently in politics, can I suggest you start your own party please? You seem to be one of the few who gets it and Bermuda needs a 3rd option to vote for who can offer a refreshing much needed change!
Agreed Education is the key to unlocking our potential and look where they choose to spend the education buget.
LOL
Nonsense! The bottom line is important but these companies have the funding to support and justify a Bermuda domicile.
It’s about the hate.
Ask Rolfe & the Colonel.
To think these two might have a say in politics in bermuda !!!!!!! onlly in bda.
Rory what IB demands?
Companies have “little social consciousness”?
Well, there’s the charitable contributions, sponsorship of sports, sponsorship of Cup Match, ‘community’ outreach days and programs, sponsorship of community events (like the End To End for the past 25 years), that sort of thing.
And then there’s the reality – that a company employing a few dozen people here pumps $millions into the local economy, which in turn creates jobs.
The Government, on the other hand,, operates at a loss, and can’t operate unless there is tax revenue. Everything the government does depends on the success of business. Every last thing.
Rory, Quite simply, Bermuda is a Capitalistic economy. If this is not acceptable, and it seems it is not to you and certain Government Ministers, then be prepared for the consequences. IB is not here to pay more in taxes so locals can have free day care and the like. On the plus side, whilst male black Bermudians may feel out of place, female black Bermudians have no such hang ups and are benefitting from IB. The Island’s debt will have to be paid for by the same people who have “benefitted” – Bermudians. IB has no interest in such matters as the same benefits could have been provided out of the taxes had there have been no additional pay offs to the PLP elite.
Form my perspective you all have missed a very important point. The article does not address the reasons companies are leaving but offers a recommendation to make it easier to come. What good will that do if you do not address the reasons they are leaving? The bottom line is that they are leaving for economic reasons and will continue to do so as long as they can get better value elsewhere. With todays advanced technologies a company can operate from anywhere and the world has caught up to thoose things that were our competetive edge. Unless we can create a new and compelling reason for them to come they will choose cheaper destinations even if you offer citizenship it wont matter. Money Rules.
Despite all the proof of a declining economy for over 4 years I notice many things that did not change with it, but ought to have.
1. The Government
2. The attitude by Them toward the very institutions who generate jobs and growth
3. Local cost of services; continuing high hourly charges by plumbers, electricians,etc as if we’re
still in 2007
4. The rhetoric and denial put forth by Government apologists especially the sickening claims that
the PLP took care of us all socially!
If you all haven’t seen enough proof of who took care of who and who is driving the ONLY successful companies we have here, out….then wait a few months and experience it for yourself.