Regarding HR and administrative job losses, most of these jobs are based in Connecticut for PartnerRe, and, I think, in the United States as well for AXIS. Bermuda is an underwriting center for both companies (staff here produce the business), and these firms will look to maintain as much business as possible as a result of merger.

M+A in the reinsurance sector is not done as a move to cut costs; profits are still extremely good, and AXIS and especially Partner Re are extremely efficient firms already from a cost standpoint. Rather, the goal is to enhance scale to make it harder for new, emerging players in alternative capital to compete.

No one will be able to predict the exact impact in the long run but we should all be doing our best to position Bermuda as the jurisdiction of choice for the merged company.

I hope that the commons sense approach to regulation by the BMA continues in the first instance. Bermuda also needs to work on a bi partisan basis to assure the IB sector that irrespective of the party in power, there will not be any drastic changes in the regulatory environment.

The ultimate question with regard to Bermuda’s economy depends on how restructuring plays out around the world at these companies. It could well be the case that, on analysis, more jobs are required here, and less elsewhere. Take an example: the majority of Partner Re’s operations and jobs are in Zurich. Partner Re’s Switzerland operations are now, essentially, 30 percent more expensive following the SNB’s decision to remove the cap on their currency. Costs and regulatory ease of doing business in Bermuda are now a relative bargain compared to Switzerland, and, our currency, pegged at the U.S. dollar, is certainly more stable. There is, therefore, clear rationale for Partner are to move jobs out of Zurich and to Bermuda, and this merger may be the event which spurs them to make that decision. I find it of note, in particular, that explicit mention of the company’s headquarters in Bernuda is made. This is all of speculation, but so are your negative premonitions.

So, in sum, the impact to Bermuda of the merging of these major, *international* companies remains to be seen. Unquestionably, it is an interesting time for the Bermuda reinsurance market: it reminds me of the late ’80s, early ’90s, where the motto was “buy or be bought.”

These job losses were not driven by government, either PLP or OBA. The industry is maturing. Ultimately the surviving companies will be more competitive. But like most industries, they will require fewer people, and many of those that remain will be less well-paid, as there is now a surplus of talent on the island and in the industry. Diversification of the economy is more urgent than ever, lest displaced people depart.