ABIR: Re/insurers contribute $816m to Bermuda economy
The Association of Bermuda Insurers and Reinsurers today released its Eighth Annual Bermuda Economic Impact Survey results.
The data show that ABIR members’ directly contribute $816 million dollars to the Bermuda economy, but also shows a continuing trend of job reductions in Bermuda. ABIR believes that the aggregate spinoff economic impact of our members in Bermuda is a multiple of that direct contribution to Bermuda’s economy.
“ABIR’s members represent the largest business segment in Bermuda, directly and indirectly driving the preponderance of economic activity, jobs, and government revenues,” ABIR said.
“As we explained last year, though, our employee headcount is slowly declining in Bermuda as jobs have been shifted to other countries. The detrimental 2010 payroll tax increase, historical difficulties with work permits, the high cost of talent and other matters in Bermuda and extraordinary competitive pressures in our business have all contributed to this.”
Mike McGavick, chair of the ABIR Board, and CEO of XL Group, said: “We’re pleased with recent actions the government has recently taken to foster a competitive business environment, including rational reforms on the work permits for the high skilled employees that we need in Bermuda.
“For every employee we bring to Bermuda, we can create more jobs for Bermudians. We look forward to working with the government on additional changes that may improve our ability to maintain or grow our Bermuda employee base.
“The trend towards consolidation (five ABIR members have been sold in the last 18 months) will continue to affect our local employment.”
ABIR president Brad Kading said: “ABIR’s members employ nearly 1,600 people in Bermuda. Nearly seventy percent of those employees are Bermudian.
“The Bermuda Monetary Authority has done an excellent job of creating a regulatory environment that meets international standards with robust prudential supervision. More broadly, Government continues to support the high levels of transparency, cooperation, and compliance standards which are necessary to compete in the markets we serve on the global stage. These characteristics allow our members to locate their groups here. Much needs to be done to help Bermuda recover from the extraordinary recession and the government is taking important steps to boost cooperation with the US and the EU, to eliminate red tape on work permits and to encourage residency in Bermuda. We applaud their actions,”
The total economic contribution is a sum of: travel and entertainment expenses, our payments for business services, our charitable contributions, our real estate costs including housing reimbursement, plus the payroll, noted Bradley Kading, ABIR’s President and Executive Director. ABIR represents 21 international insurance groups all of which have essential underwriting operations in Bermuda. Eighteen ABIR members participated in the survey.
Here is a summary of the data:
ABIR Travel and Entertainment Expenses in Bermuda
ABIR members estimated they spent just under $28 million in Bermuda on hotels, airfare, restaurants, taxis and catering in 2012, an amount that is down 1% over 2011 expenditures of $28.3 million.
ABIR Business Services Expenses in Bermuda
ABIR members estimated in 2012 they spent nearly $75.6 million in Bermuda on legal, accounting, actuarial, temporary services. This is roughly down $10.4 million from 2011, but up 72% over the eight year period.
ABIR Member Charitable Giving in Bermuda
ABIR members estimated they contributed more than $10 million in 2012 to Bermuda based charities.
ABIR Member Construction, Real Estate and Housing Costs
ABIR members estimated they spent in 2012 over $107 million on construction, real estate and housing costs in Bermuda. This is down from $121 million in 2011. Construction spending has had great variability over the years.
ABIR Member Bermuda Employment
ABIR members reported employing 1,589 full time people in Bermuda in 2012 (down 77 from 1,666 reported at year end 2011). The year 2007 was the peak year for our employment in Bermuda; employment is down a total of 193 since then. Of these employees 1,078 are Bermudian citizens[i]. This is down 37 from 2011. The percentage of the ABIR Bermuda employees that were Bermudian in 2012 was 68%.
Employee Departures from Bermuda
In 2012, 32 employees left Bermuda to work for their companies outside of Bermuda, of which 28 were Executive/Senior/or Middle Management positions. In 2011, 45 employees left Bermuda to work for their companies outside of the country.