Bermuda could be in for an intellectual capital crunch as a result of the wave of new insurers washing over the Island. However, hand in hand with demand for key staff could be greater opportunities for Bermudians in the international business sector.

David Ezekiel, head of the Chamber of Commerce's International Companies Division, said increasing demand for intellectual capital - and specifically in the insurance sector and its support services - is already a critical issue for the Island.

The acute need for intellectual capital follows in the aftermath of the September 11 terrorist attacks, with seven new companies announcing they are setting up on the Island. In total, the new insurance ventures have indicated the requirement for 120 staff.

Mr. Ezekiel said: “It is critical, and it is happening in a couple of new areas. Before this (staff shortage) was seen in accounting areas, and while that continues, the real pressure now is being put on the area of underwriting,” Mr. Ezekiel said.

Mr. Ezekiel said that while most of the new firms have already identified who they would like to be involved at a senior level, they are eager to hire Bermudians. He said the firms would be looking for locals already in the field, who would be ready to “hit the ground running”, and Bermudians who could be trained.

He also predicted that there could be: “a much faster track for young Bermudians - who are already working in the field - to realise their aspirations.”

Mr. Ezekiel said a company's access to the right intellectual capital is “absolutely essential”.

Mr. Ezekiel said the support services - banking, accounting, legal - are important, but underwriting is most critical, as first one has to “put business, and the right business, on the books.”

Mr. Ezekiel said the need for staff is especially acute as the new ventures have set up at a time when they are working “around-the clock” with most policies coming up for renewal in January.

Mr. Ezekiel said this highlights the need for an even more efficient, fast track for work permit approvals.

Chief immigration officer Dr. Martin Brewer said with fast-tracking the general turn around time can vary, but applications are for the most part getting processed in five to ten working days.

Mr. Ezekiel conceded that Immigration's fast track was pushing through permits in under two weeks, but said it was: “working well for firms already familiar with procedures.”

He said: “We have to get a whole lot more flexible - we cannot have a three-month lead time for the processing of work permits.”

Mr. Ezekiel, who is also CEO of International Advisory Services (IAS) said: “As a management company, we (IAS) have always been a target of headhunting.”

He added: “Some of the previous hunters are now becoming hunted. And these new ventures have substantial resources.”

Of whether the intellectual capital crunch could push up salary levels, Mr. Ezekiel said: “It will undoubtedly push up salaries in these sectors.”

Mr. Ezekiel said the sectors which are being hit are first, insurance. Followed by support areas such as legal, banking and accounting sectors.

In terms of financial compensation, Mr. Ezekiel said: “The packages all look pretty similar. Although the newer companies are under pressure (to get staff) and may be willing to pay more.”

Increasing pressure in the area of intellectual capital was also hinted at earlier this month by ACE CEO Brian Duperreault.

In a speech to the Bermuda Employers Council, Mr. Duperreault said: “”From an employment view, we're going to face challenges to the status quo. These (new) companies will need to hire employees of all levels of seniority, putting pressure on salaries, particularly those of support staff. Established international companies like mine, as well as local companies, are going to find that their employees are being courted by the new kids on the block.

Mr. Duperreault said ACE will have to step up efforts to hold on to staff: “They'll be offering some pretty attractive packages to entice staff to jump ship,” he said.

Of how companies might hold on to staff, Mr. Duperreault said: “But, I don't believe that people move from company to company just for the money. They move because they are unhappy with their work environment.

“If we want to hold on to our talent, the best line of defence is to make sure that our organisations are great places to work, that our staff feel valued and that they are properly compensated for their performance. We may have to take a look at our training and development programmes, our commitment to our corporate culture and our salary structures,” he said.

Speaking to the intellectual capital strain, an XL Capital spokesperson said : “We have a very high quality staff which is always in demand. We are aware of this and we respond not to specific situations but on a continuous basis by being the employer of choice within our industry, within all of the markets in which we operate. We do that by offering a work environment that encourages and rewards excellence and provides ample opportunity for professional growth on an international basis.

We feel this is particularly true in Bermuda. In a company of our size and diversity there will always be a certain level of turnover. We are very happy that this has been, and remains, at a minimum level.”

Meanwhile, one of the new insurance chiefs, AWAC president Michael Morrison, in an interview with The Royal Gazette last month, said: “We will hire locally if we can. It is very difficult to guess how many employees, and it would be a guess at this point. I think we have to see the degree to which we can fill the need, and we will staff as needed.”

Meanwhile, a second new Bermuda reinsurer, Axis, said it would outsource as much as possible.

Axis CEO John Charman said many of its services will be farmed out to companies around the Island. Its IT and back office support and policy processing are no longer done in house, and Mr. Charman believes that this is the way ahead for the business.

“If you look at most of the major insurance and reinsurance businesses globally, are overwhelmed by infrastructure - huge infrastructure.

“There are huge populations of people, so that the reality of managing and focusing at the same time on proper business activities is extraordinarily difficult. What we are trying to do is to use a fundamentally different business model which relies less on people but the people that are employed are going to be the best in their field,” Mr. Charman said.