Violent crime is a growing concern, says insurance boss
The threat to the security of employees from the rising tide of violent crime in Bermuda has become an increasing concern for international companies, a reinsurance boss said yesterday.
Michael Price, chief executive officer of Platinum Underwriters, told delegates at a conference in Hamilton yesterday that violence was an even more pressing issue than industry regulation or Bermuda's competitiveness as a domicile.
“The one issue that I would say is most prominent in people's minds right now, and a difficult one to acknowledge, is the rising incidence of violent crime and the sense of ‘do we feel secure, having our professional and personal lives here, our families and children here, in the long run?'” Mr Price said at the Ernst & Young Property/Casualty Year-end Outlook at the Fairmont Hamilton Princess.
“When we first arrived here five years ago, we felt very positively along those lines. As time has progressed our sense on this has changed somewhat.
“That's not a problem that we, as an international business can solve. It's a problem that rests with the Governor and Government here in Bermuda. And I believe there's a will and a desire to address this problem.” Several major players in the Bermuda market have redomiciled holding companies or capital to Europe for a combination of reasons.
Tax treaties, country stability and a greater geographical presence in the European market are among the reasons that have frequently been cited.
Several international business bosses, however, have voiced concerns about the cost of doing business on the Island and the impact of work permit time limits on the ability to attract and retain talent.
Mr Price conceded that it might be provocative to suggest that violence was the most pressing issue, but added that the Island was making great strides towards gaining regulatory equivalence with new European Union solvency rules for insurers, and Bermuda also remained a competitive place to do business.
He added: “The question is, ‘How sustainable is this in the long run?' It can be sustainable, provided we can provide for the security and wellbeing of the people we necessarily have to employ and have reside in Bermuda. We need their spouses and families to feel good about coming to Bermuda.”
He added that the company had considered rival jurisdictions.
“We have looked at alternate jurisdictions, as I'm sure everyone has, but we have concluded that for our business model, under current market conditions, Bermuda is the optimal place to be,” Mr. Price said.
“So we intend to be here and be here for the foreseeable future.”
Fellow panellist David Cash, CEO of Endurance Specialty Holdings Ltd, said the size, significance and profitability of Bermuda's insurance and reinsurance markets were major factors on his company choosing to remain in Bermuda.
“I'm personally not wild about taking our holding company and moving it to a domicile where we haven't got a meaningful presence,” added Mr Cash, one of few Bermudians to have led an international re/insurance company.
“My own perception is that the Swiss model and the Dublin model may have a lot of challenges that aren't fully appreciated.”
He added that restrictions on repurchasing shares - a significant driver of value for Endurance - was one of the challenges with Switzerland, for example.
“I think we [Bermuda] are doing a good job of managing tax risk and regulatory risk and we have two of the great markets in our industry here,” Mr Cash added.
“So a lot of things would have to unwind for us to think seriously about redomiciling our organisation.”
Alterra Capital Holdings Ltd CEO Marty Becker said his company, when it was formed through the merger of Max Capital and Harbor Point last year, had made a conscious decision to remain domiciled on the Island.
“We looked at other domiciles around the world that were becoming popular,” he said.
“Based on the way the world is shaped today, and the laws and regulations in the various domiciles, we continue to feel that for our type of business, this is the most attractive domicile in which to operate.”
He added: “Our businesses are people businesses. The ability to attract and retain intellectual talent in Bermuda will be the key competitive differentiator.
“So anything the Government can do to make Bermuda an increasingly attractive place to live and work and raise your family will be the necessary factor for Bermuda to retain its competitive edge.”
Peter Porrino, Ernst & Young's global director of insurance industry services, agreed that keeping the industry's best minds here was critical to Bermuda's future.
“There are not that many insurance talent hubs in the world,” Mr. Porrino said.
“This is probably the second one in the world - London, and then Bermuda. That's one of the key competitive strengths of Bermuda.
“If you lose that, you can have all the Solvency II equivalencies you want, but without having the talent here, the people who I think have made Bermuda what it is, then that's not good.”