ABIR: $886.8 Million Contribution To Bermuda
The Association of Bermuda Insurers and Reinsurers [ABIR] today released its Ninth Annual Bermuda Economic Impact Survey results.
A statement from the Association said, “The data show that ABIR members’ directly contribute $886.8 million dollars to the Bermuda economy–an increase of nearly $70 million over 2012.
“ABIR members employ more than 1,500 people in Bermuda. ABIR believes that the aggregate economic impact of our members in Bermuda is a multiple of that direct contribution and employment to the benefit of Bermuda’s economy.
Mike McGavick, Chair of the ABIR Board, and CEO of XL Group, said: “ABIR’s members represent the largest business segment in Bermuda, directly and indirectly driving economic activity, jobs, tourism and government revenues.
“The Government’s action to ease business travel restrictions, lengthen work permits and foster long term residence opportunities will bear fruit over time in employee location decisions.
“For every employee we bring to Bermuda, more jobs for Bermudians are created. The trend towards consolidation and the soft market conditions, however, will continue to affect our local employment,” McGavick noted.
Chart extracted from the report:
ABIR President Brad Kading said, “ABIR’s members employ over 1,500 people in Bermuda. Sixty-five percent of those employees are Bermudian.
“Bermuda is the center of innovation in property catastrophe underwriting and the location of key talent in this business segment has allowed Bermuda to attract significant amounts of capital from pension funds to further grow Bermuda’s footprint in the alternative capital market.”
“The Bermuda Monetary Authority’s accomplishments in meeting international regulatory standards and the leadership of the Minister of Finance in meeting the necessary high levels of transparency, cooperation, and tax law compliance are twin foundations necessary for this business to thrive here. We applaud their actions,” Mr. Kading said.
“The total economic contribution is a sum of: travel and entertainment expenses, our payments for business services, our charitable contributions, our real estate costs including housing reimbursement, plus the payroll, added Mr. Kading.
ABIR represents 21 international insurance groups all of which have essential underwriting operations in Bermuda. Nineteen ABIR members participated in the survey.
ABIR Travel and Entertainment Expenses in Bermuda
ABIR members estimated they spent $28.8 million in Bermuda on hotels, airfare, restaurants, taxis and catering in 2013, up nearly $1 million over 2012 expenditures.
ABIR Business Services Expenses in Bermuda
ABIR members estimated in 2013 they spent $66.9 million in Bermuda on legal, accounting, actuarial, temporary services and other consulting services, in 2012 they spent $75.6 million.
ABIR Member Charitable Giving in Bermuda
ABIR members estimated they contributed nearly $13 million in 2013 to Bermuda based charities; up from $10 million in 2012. Further, ABIR members have pledged or contributed a cumulative total of $7.9 million towards the Bermuda Hospital project, during the last three years.
ABIR Member Construction, Real Estate and Housing Costs
ABIR members estimated they spent in 2013 more than $107 million on construction, real estate, and housing costs in Bermuda; roughly $200,000 more than in 2012. Construction spending has had great variability over the years.
ABIR Member Bermuda Employment
ABIR members reported employing 1,516 full time people in Bermuda in 2013 (down 73 from 1,589 reported at yearend 2012). Of these employees 992 are Bermudian[i]. This is down 61 from 2012.
The percentage of the ABIR Bermuda employees that were Bermudian in 2013 was 65.4%. However, ABIR membership changes explain some of these changes. An analysis of the 17 members who reported for both the 2012 and 2013 calendar years shows a decrease of only six Bermuda-based, full-time employees compared to the decrease of 73 noted in the aggregate data.
Further, the number of Bermudians employed between the 17 ABIR companies reporting in 2012 and 2013 was a decline of 16, compared to the 86 noted in the aggregate data. Variability of reporting companies and membership can exaggerate some of the reported results and the 2013 data reflects the loss of one large ABIR member which was purchased by another non-member insurer.
Employee Departures from Bermuda
In 2013, 24 employees left Bermuda to work for their companies outside of Bermuda, of which 20 were Executive/Senior/or Middle Management positions. In 2012, 32 employees left Bermuda to work for their companies outside of the country.
[i] Bermudian equals: Bermudians, spouses of Bermudians, and permanent residency certificate [PRC] holders.
WOW!!!! We thank you for your contributions of $886.8 million
Anyone else notice the dramatic decline of income to our economy leading up to the plp losing the election and the slow but steady INCREASE since the OBA have had control??? And the plper’s are still thinking their way was the right way???? Hopefully all can see the plp way, was NOT the right way!!!!!
That’s very limited thinking…from the graph, there appears to be steady growth leading up to 2010 (PLP had been in power since 1998), so the real question is what event(s) happened in that year to cause the decline?
The PLP policies of that time…
@Carmen. Are you being serious??? When the plp started with their term limit nonsense back around 2007, the writing was on the wall for IB and they starting making their exit plans, that just does not happen over night as it takes a lot of planning!! Come 2010 the mass exodus started, plain and simple!!! In case you are going to bring the market collapse BS into it, I will tell you the vast majority of the companies we had were effected very little by it, no matter what the plp says!!!!
Yeah, nothing to do with our then Finance Minister surprising the IB community with a hefty payroll tax increase during a financial crisis! Talk about being out of touch or just plain retarded…
@justin, you are correct but also let’s go to the next stupid thing the plp did, they told foreigners that were married to Bermudians that they would need a permit to buy a house in BDA??? I was on the opposite side by being the Bermudian married to the foreigner but it was just another nail in the IB sector coffin because there was quite a few of them married to Bermudians!!! And the plper’s still can’t figure out why the mass exodus REALLY happened??? Sad really!!!
Actually it plateau’d around 2008, there was a slight spike in the employment in 2010, but that was also offset by the decrease at that time in construction, charitable and travel monies. The PLP failed to react to the global crisis and take measures to create incentives for the companies to stay, so IB monies flowed out of here and by 2010, they began to decrease in response to the PLP’s failure to work with them. While the PLP were not responsible for the global economic crisis, they were responsible for failing to respond to it and instead took a ‘we can wait it out’ policy and as such, jobs got outsourced from here, easy to go, hard to get them back.
Only a fool leans up against his own misunderstanding! /?
Let’s have a truthful comment !!
ABIR says it employed 1,500 people and put $886.8 million into Bermuda’s economy in 2013. ABIR says 65% of the 1,500 were Bermudian. So those 975 Bermudians who work in that industry can be said to have pulled in 65% of that $886.8 million. That’s $576 million, and that’s with IB on the downside.
In that same year, 2013, Tourism put $391 million into Bermuda’s economy. In 2013, Tourism employed about 4,385 people. In 2013, 60% of those people, about 2,631 were Bermudian and can be said to have pulled in 60% of that $391 million. That’s $234 million.
So in IB, 975 Bermudians pull in $576m while over in Tourism, almost three times as many Bermudians bring in less than half as much. In all, for every one dollar ($1.00) earned by a Bermudian in IB, a Bermudian working in Tourism will only bring in one dime + three cents ($0.13.
Yes, support Tourism. But have no illusions. IB and any legal, moral, and ethical future variant of IB is the only way forward. Tourism cannot do it.
Besides, right now, Tourism is subsidized by the Payroll Tax concessions and the multi-million dollar subsidy provided to the airlines by the Airline Seat Guarantee.
Agreed, with the caveat that IB is not the way forward for mass employment. Tourism to put people to work, IB to bring in the bacon.
Mass employment? Yes, but at much lower rates of pay.
Annual median income for workers (including Bermudians) in hotels, restaurants, bars, and cafes are $34,872/$35,614.
Annual median income for workers (including Bermudians) in IB is $120,726.
Whatever aspects of employment or income are considered, income from Tourism is well below that from IB. It is multiples lower.
While Tourism is on ‘life support’, IB, downsized as it is from 2008, is still strongly ‘stand-alone’.
Bermuda’s answer lies in IB, not Tourism. But Tourism must survive.
Hey Mee,
Could you let me know where you got those stats? I’d be interested in checking them out.
The trouble with IB is A) the salary numbers will be skewed due to the presence of a handful of C-level executives that make 10′s of millions a year. and B) Its not for everyone. Takes a lot of time and money to get the experience and education necessary to succeed.
I couldn’t agree more that from a financial point of view IB is the way forward for Bermuda, I just think from a social welfare perspective tourism is vital.
Your figures for bermudians in ib is overstated. The $800m includes total expenditure including travel, etc. The total salaries and benefits is lower.
Likewise you r calculation presupposes that the Bermudian employee salary is proportionate to the number of bermuda employee in ib which is not the case. The real figure is closer to half of your 65%.
The bermudian working is tourism is likely to earn more like 30 cents (too lazy to do the actual calculation right now) for every dollar earned by a bermudian in ib.
Good point though.
an extra 70 million dollars in the community, yet unemployment has gone up..What does that tell us…
a very few getting the lion share…
Or perhaps it’s funded government projects like the new hospital…
There may have been no trumpeting press releases about new jobs, but there have been new jobs.
Many IBs have been increasing staff recently. My company alone has increased its staff by 10% in the last year.
IB just doesn’t bother with all the politics so there are not massive media releases whenever someone is hired.