The author of this article is a senior Bermudian reinsurance executive. He is writing anonymously because of his concerns that expressing his views could result in punitive consequences towards his employer.

Since it acceded to office in 1998, the PLP Government has seen the Island's insurance/reinsurance industry go from strength to strength. Despite occasional warnings from insurance executives that Government policy threatened to derail the industry's growth, new companies have continued to flock to Bermuda.

Currently, 23 Bermuda-domiciled companies deploy more than $60 billion of capital and employ 17,000 people worldwide. Locally, Bermuda's insurance industry employs 1,700 individuals – more than 50 percent of whom are Bermudian.

That a capital-rich industry has experienced such growth and success under a labour government has apparently emboldened Premier Dr. Ewart Brown to believe that continued success is ensured and that prospective changes to Government policy will have little or no affect upon the desire of companies to come to or to remain in Bermuda. In a few short months, Dr. Brown (among other things) has proposed to prohibit some expatriate insurance executives from owning cars; "asked" that industry CEOs provide him and his Ministers with free transport on corporate aircraft; "requested" major insurance companies to finance his pet music project; and, most recently, promised to attach a Bermudian to the work permit of every expatriate insurance executive.

In short, Dr. Brown has threatened to increase, to a degree unrivalled by his predecessors, the costs and burdens of managing an insurance business from Bermuda. And, at the same time, the saga of the Bermuda Housing Corporation has been played out in Bermuda and in London, with Dr. Brown doing his best to obfuscate, delay and otherwise prevent the release of the details of his involvement.

Moreover, Dr. Brown has continued to discuss the possibility of independence in a manner that reveals little respect for the Bermudian voter. Although insurance industry CEOs would almost certainly prefer to see Bermuda remain a British territory, the prospect of seeing a divided Bermuda unwillingly forced into independence and governed by an ambitious autocrat is particularly unsettling. As has already been noted in this paper, more than a few companies are ensuring that their contingency plans to relocate to Dublin, Cayman or other jurisdictions are kept up-to-date.

Dr. Brown's proposals represent a clear and present danger to the health of the Bermuda insurance industry and to the vitality of the island. Although he is right to be concerned about the lack of prospects for graduates of Bermuda's school system, he is wrong to believe that the lack of opportunity can be remedied by decree. Although he is right to want to see that talented Bermudians are considered for jobs in the industry, he is wrong to believe that the island's companies need to be forced to hire them (in fact, they are desperate to hire locally).

Although he is right to want to spread the wealth, he is wrong to believe that this can be accomplished with carrot and stick policies. If he is serious about expanding the participation of Bermudians at senior levels of the industry, he needs to focus on fixing the education system and addressing the lack of family structure that puts many students in Bermuda's school at a marked disadvantage from the day they enter the classroom. If he is serious about ensuring that Bermudians receive the experience needed successfully to compete in the insurance industry, he needs to use his clout in Washington to see that Bermudian students graduating from US colleges are permitted to work in the US for an extended period of time in order to gain the needed experience.

Of course, Bermudians already have the right to live and work in the UK and Europe … but Dr. Brown has made no attempt to remind anyone of this singular advantage. The expatriate employees of Bermuda's insurance companies are drawn largely from the US, Canada, the UK and Western Europe – from populations totalling approximately 660 million people. To expect that an island of 66,000 (a large number of whom are not Bermudian) can produce more than a small number of the skilled accountants, actuaries, underwriters, claims personnel and other professionals required to run world-class businesses is entirely fanciful.

And to think that raw recruits with but three years of training can replace the seasoned skills of ten to 35 years of industry experience is ridiculous. Dr. Brown's Goodwill Plus plan is a pipe-dream. Roughly 20 years ago, Detroit was the capital of the automobile universe. Today, metropolitan Detroit leads the US in foreclosures; its home prices have fallen for each of the past three years; its unemployment rate is the highest in the country. Roughly twenty years ago, the UK was home to 170,000 coal miners.

Today, fewer than 3,000 miners work the pits, and many of the towns that housed the miners and their families have yet to recover their former prosperity. Roughly twenty years ago, Ace and XL were inchoate enterprises. Today, their business and that of their Bermudian competitors is sufficiently important that the CEO of the WR Berkley Corporation, a Connecticut-based reinsurer, has asked the US Senate Finance Committee to end the "tax breaks" given to Bermuda reinsurers, saying that this advantage "could ultimately threaten the future of the US insurance industry".

Significant changes occurred to the industries and communities of Detroit, Yorkshire and Bermuda in the short span of time that Dr. Brown spent studying and practising medicine in Los Angeles. These changes occurred for a variety of reasons: lack of foresight; inflexibility on the parts of labour and management; poor Government policy; and creativity and vision on the part of new businesses and governments. As other locations lost their comparative advantages, so can Bermuda. As Bermuda built a world-class industry and attracted players in that industry to our shores, so can another island or country.

Despite the threat of changes to the American tax code, Bermuda's insurance executives are more concerned with the threat to their companies posed by the prospective policies of Ewart Brown. Typically, "trial balloons" are floated by junior ministers or assistants to undersecretaries in a way that provides those at the top of the administration with plausible deniability.

When the leader of a Country (even one whose authority remains unconfirmed by an election), describes prospective policies, those policies are understood to reflect the intended course of the country, lacking only the needed details to become law. And these policies are deeply unsettling to those who operate in a constantly challenging global environment.

While Bill Berkley lobbies Senate leaders for changes in tax law, Bermuda's Premier describes the changes he plans to implement. Who can – with any confidence – say that Bermuda's insurance leaders are worried about the wrong man? Who can say that external threats are more potent than those that are home-grown?

For several years, many Bermudians have assumed that the investment in Bermuda made by Bermuda's insurance industry was too significant to be abandoned. Possibly, that statement was true ten years ago, when all but a few of the employees working for these companies resided in Bermuda.

Now, 90 percent of Bermuda's insurance industry employees live and work in the US Europe or elsewhere. How difficult would it be to move the expatriate workers and Bermudian executives the companies wished to keep? When large write-downs related to underperforming assets or businesses are shrugged off, how concerned would analysts and shareholders be if Bermudian office buildings were sold at a loss or entirely abandoned? The threat of departure of the insurance industry has been both simultaneously exaggerated and understated. The threat is exaggerated because the implied suggestion of a rush to the L.F. Wade International Airport is unrealistic.

Inertia is a powerful force, even in business. The threat is understated because the departure (in a relative sense) has already started. With each month, a smaller and smaller percentage of the companies' employees are to be found in Bermuda. With each month, more and more of the Bermuda companies' operations are to be found overseas. If expatriate employees are not welcomed by the Bermuda Government, insurers will accelerate their growth in other, friendlier jurisdictions. In another few years, particularly if Dr. Brown continues in office, the percentage of insurance industry employees located in Bermuda will be far lower.

In a competitive world, where countries and companies constantly optimise their tax and regulatory structures and strategies, who can doubt that a successor to Bermuda may emerge?Who can doubt that that jurisdiction may be far more tolerant of expatriate workers than is Bermuda? And, who can hold out much hope for the many thousands of Bermudians who, directly and indirectly, derive their living from the Bermuda insurance industry?

Ewart Brown's pipe dreams could be the nightmares of ordinary Bermudians.