We’re all in this together, so let’s get to work
Patrick Tannock, the chairman of the Association of Bermuda International Companies, this week issued a call to arms to the Bermuda community.
Mr Tannock, also chief executive officer of Bermuda’s AXA XL insurance operations, warned that the island must start preparing now for a post-Covid world.
He was right do so. Some of his comments have been made before but the call for people to put their differences aside and come together was as timely as ever.
Bermuda faces myriad challenges and the international business sector, despite its relative success during the pandemic, is not immune from them.
Most directly, international business is threatened by the movement for a global minimum tax. More broadly, the world is becoming less friendly towards countries that are perceived to be tax havens, with tax and regulation-friendly jurisdictions being lumped in with terrorists and money launderers, no matter how stringent their compliance requirements.
So Mr Tannock was absolutely correct when he said the perception that Bermuda is a place where “capital goes to hide” has to be “shattered”. Instead Bermuda should be positioned as a place where capital goes to grow.
He said: “The reality is that this is a place where we put capital to work. The hard evidence is the hundreds of billions of dollars the Bermuda re/insurance market has paid out to cedants around the world in their times of greatest need: $209.6 billion to US cedants alone between 2016 and 2020 for large catastrophes, property and casualty losses, and life insurance claims.”
Mr Tannock noted that a post-pandemic world will be more digitalised and more experience driven.
For Bermuda to survive and thrive, it therefore needs to be more efficient and cost-competitive. To that end, it needs to keep bureaucracy to a minimum.
Mr Tannock claimed that Bermuda’s innovative business culture and speed to market make the island “uniquely well equipped” to solve the the world’s problems and apply them quickly, adding: “When you look at how fast things are evolving and how bureaucracy gets in the way in other jurisdictions, then by the time capital is applied to the situation, it can already be obsolete. That doesn’t happen in Bermuda — we’re in an era of ‘just-in-time’ capital and we fit well with that.”
Mr Tannock may well be correct about this in terms of international re/insurance and other forms of international business but this is certainly not the case in other areas of Bermuda life.
Even allowing for the necessary evil of compliance and other financial regulation, it can take weeks to open a bank account, to hire overseas expertise, to get a building project moving and to navigate things like customs clearance. There’s a cynical joke which goes: “The answer is no. What was the question?” In Bermuda this is not funny. It is just how things are.
If Bermuda genuinely wants to succeed, it needs to apply the values Mr Tannock trumpets to other aspects of Bermuda business and life, while ensuring Bermudians are not disadvantaged and the vulnerable are protected.
To that extent, Mr Tannock is right that the revival of the tourism sector as a whole is vital to Bermuda’s overall success.
He added: “On the premise that political, social and economic stability are critical to our sustainability as an international business jurisdiction, our recovery has to be interconnected.
“In Bermuda we have access to some of the top intellectual capital on the planet, talent that has consistently shown a willingness and desire to work collaboratively with Government to provide solutions. We all have a role to play to mitigate the impact on our economy and put us on a path to economic renewal.
“Economic recovery will be challenging globally but by working together, all of us in Bermuda will emerge from this stronger than ever.”
This is a welcome offer and the Government and the general public would be wise to embrace it. Mr Tannock noted that this had already happened with joint efforts to promote Bermuda as a centre for climate-risk finance.
And he is also right — and uniquely positioned — to embrace efforts to diversify the international business workplace. Too often international business in Bermuda is perceived as a White male domain, something that is somehow disconnected from the much more diverse community that is “the real Bermuda”.
Advice and help from international business will be much more palatable if it is being offered by people who look more like the majority of Bermuda’s population. So the importance of encouraging diversity cannot be overstated.
At the same time this also works to business’s advantage, as Mr Tannock rightly noted: “Although we still have much room for improvement, I believe Bermuda has an opportunity to show the rest of the world that diversity and inclusion can be a differentiator for a top-tier company. The more diverse workforce we have, in terms of different perspectives, backgrounds and ideas, the more successful a company will be and that’s been proven many times.”
There has never been a greater need for the whole Bermuda community to come together. It faces awesome challenges. But there are also amazing opportunities to be grasped if only we get out of our own way.
As Mr Tannock said: “To remain competitive, Bermuda must provide an environment in which international business gets what it needs to thrive. Likewise, we in international business must be respectful of Bermuda’s culture as well as the aspirations and values of Bermuda’s people. We are all in this together.”
Indeed we are. Let’s get to to work.