Action needed to halt job losses ABIR

  • <B>Trending downwards: </B>A graph showing the changes in the size of the Bermuda workforce of ABIR member companies since 2005 (Source: ABIR)<B></B>

    Trending downwards: A graph showing the changes in the size of the Bermuda workforce of ABIR member companies since 2005 (Source: ABIR)

  • <B>Main economic pillar:</B> A graph showing the pattern of spending in Bermuda by ABIR member companies since 2005 (Source: ABIR)<B></B>

    Main economic pillar: A graph showing the pattern of spending in Bermuda by ABIR member companies since 2005 (Source: ABIR)

  • <B>ABIR chairman</B> Constantine Iordanou<B></B>

    ABIR chairman Constantine Iordanou

Leading insurers have urged Government to act to encourage companies to locate their senior executives on the Island after their Bermuda-based staff numbers fell for a fourth successive year.

The Association of Bermuda Insurers and Reinsurers said a survey of its member companies showed a clear correlation between the number of senior staff leaving and employment opportunities for Bermudians.

Wayne Furbert, the Minister of Business Development and Tourism, yesterday said Government is considering recommendations made by ABIR to streamline Immigration processes.

The five ABIR members who historically have had the largest Bermuda-based workforces have cut staff numbers on the Island by almost a quarter over the past four years.

Over the same period the number of Bermudian citizens (including spouses of Bermudians and permanent residents) on their payrolls fell by one-fifth.

The figures are revealed in ABIR’s seventh annual Economic Impact Survey, released today, which estimates that the body’s 22 member companies last year contributed almost $1 billion to the Bermuda economy directly and much more indirectly.

ABIR chairman Constantine (Dinos) Iordanou said ten-year work permits for “job creators” was a good start, but suggested more action was needed to halt the loss of industry jobs.

“We appreciate the action the Government has taken with regard to the Job Creators’ Act,” said Mr Iordanou, who is also the chairman and CEO of Arch Capital.

“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.”

The survey found that ABIR companies employed 1,666 people in 2011, down 30 from the end of 2010 and down 116 from the group’s peak employment in 2007. More than two-thirds were Bermudian citizens.

Salary and benefits paid out to these employees totalled around $698 million last year.

Some 45 employees left Bermuda to work elsewhere for their companies. Of the larger number who left Bermuda for a variety of reasons, 51 were in executive, senior or middle management positions.

Mr Iordanou said the key finding of the survey was that ABIR companies’ Bermuda workforce shrank for the fourth consecutive year.

“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 percent,” he added.

“For these same companies, their average reduction in Bermudian employees is 19.6 percent.

“This trend is worrisome for Bermuda’s economy because: 1) it means fewer jobs in Bermuda; 2) lower payroll tax revenues; 3) less compounding economic activity from these highly compensated executives; 4) fewer meetings filling up hotels and restaurants.”

The ABIR survey was delivered to Government last week. Mr Furbert yesterday described international re/insurers as “a critical component of Bermuda’s economy”.

“We need to keep these companies and jobs here,” Mr Furbert said. “We value their contribution to the Bermuda economy. The employment of non-Bermudian employees in the management ranks is expected and essential for the success of these companies.

“We applaud the ABIR members for their commitment to Bermuda and the fact that nearly 67 percent of their employees here are Bermudians, spouses of Bermudians or PRCs.

“ABIR has recommended to us some changes that will streamline Immigration processes for these workers and the Government is considering those recommendations.

“We’ve made significant changes in the last year and we expect that those changes will bear fruit. We welcome additional ideas.”

Despite the shrinking workforce and the fact that many ABIR firms lost money on paying their share of claims from $105 billion of global insured catastrophe losses last year, the insurers spent more money in Bermuda.

ABIR members estimated they spent nearly $86 million in Bermuda on legal, accounting, actuarial, temporary services, up by around $5 million from 2010.

They forked out $28.3 million in Bermuda on hotels, airfare, restaurants, taxis and catering in 2011, up seven percent over 2010 expenditures of $26.6 million.

Nearly $121 million was spent on construction, real estate and housing costs in Bermuda by ABIR companies, up from $116 million in 2010.

The group also contributed more than $12 million to Bermuda charities last year, up from $10.6 million in the previous year.

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Published May 21, 2012 at 8:00 am (Updated May 21, 2012 at 8:46 am)

Action needed to halt job losses ABIR

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