XL Capital Ltd. chief executive Brian O’Hara says “draconian” implementation of six-year time limits on work permits would put Bermuda’s insurance companies at a competitive disadvantage to rivals - but he is hopeful it will not happen.Speaking in New Orleans, where he is one of around 11,000 professionals attending the Risk and Insurance Management Society’s (RIMS) annual conference, Mr. O’Hara said talks on work permits were ongoing between international business leaders and Government.

The chief executive officer of the Bermuda insurance market’s second biggest company also told The Royal Gazette that he expected the Island’s global insurers would do more of their business overseas in future, as the strain on local infrastructure grew.

Talking about the effect of the time-limit rule on his industry, Mr. O’Hara said: “There clearly are key jobs in areas like actuarial or legal that are so critical to the operation of an insurer or reinsurer.

“So to have an artificial limit can cause a lot of competitive disadvantage for Bermuda companies and to be unlucky, or to have your demographic a little out of step with competitors, through a draconian enforcement of a strict limitation, could be quite problematic. I really don’t believe that that’s going to happen, but we’ll see.”

Mr. O’Hara stressed that around 60 percent of the staff of Bermuda insurers and reinsurers were now Bermudian and that proportion would continue to grow as “virtually 100 percent” of all entry-level posts were now going to locals. But the industry still needed to recruit talent in specialized jobs from overseas - and a time limit would deter some.

“It will be more difficult to attract staff, if that comes about,” Mr. O’Hara said. “It’s not yet clear what is going to happen with regard to work permits. I think it’s something that we and the Government can work on together to find a way to manage the situation and not let it become a problem for Bermuda.

“I’ve heard of a number of different creative solutions to use the market to regulate the permit situation, particularly longer work permits perhaps through pricing, or other mechanisms.”

Mr. O’Hara also responded to the suggestion that international companies shouldered some of the blame for Bermuda’s shortage of affordable housing, with housing allowances for their staff applying upward pressure to the real estate market.

“It’s certainly a fact that to attract talent away from their home base, whether it’s London or New York, or wherever, you’ve got to make it economically attractive for them,” Mr. O’Hara said.

“Many times those people aren’t in a position to rent their house out or sell it and you can’t expect them to come to work in Bermuda if it gives them an added economic burden. And as more and more companies have come to Bermuda, there’s been more competition for talent - both Bermudian and non-Bermudian.

“This competition has sometimes raised the stakes for the kinds of perquisites and compensation that you might give.

And some of our perks are not just for expats, they’re for all employees - Bermudians and expats alike.”

“I don’t think it’s appropriate to bifurcate Bermudians and expats in the industry. In the way we all operate, they’re integrated and not just in Bermuda, as many of us are global companies.

“XL has operations in 28 countries and the people in Bermuda interact all over. More and more, we transfer Bermudians to the US, the UK and all over the world. As a global company, there needs to be a fluidity of talent.

“It’s turned out to be a great opportunity for Bermudians to have access to globally focused careers and not be island-bound with an island-only mentality.”

The strain on the housing market and schools, as well as growing traffic congestion and the sheer lack of space on this 21-square-mile island meant the rapid growth of the past two decades could not be repeated over the next two, Mr. O’Hara said.

“Certainly there are challenges, with the infrastructure in Bermuda being so finite and I’ve said that in the past,” he said. “To that end, with those of us that are global, more and more things are being done in places like India, Canada, Scotland - where you have access to highly educated people at a lower cost.

“So I’m not sure it’s accurate to extrapolate what’s happened in Bermuda in the last 20 years going forward. We could see a levelling off and certainly with the high price of housing and availability becoming short, that will have a natural evolution that will force companies to do more outside Bermuda, I think.

“There’s also a natural evolution of expats going back to where they came from, or, in a global business, going to another operation.

“I don’t know what we can do about it directly, other than be rational and hopefully that rationality, whether on cars or housing accommodation, will help us work with Government to ease the pain of congestion that growth has brought to the environment.”

Mr. O’Hara will be one of the industry leaders who will meet with Premier Ewart Brown and Finance Minister Paula Cox during this week’s conference.