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Room for optimism in international business

As the sadness and tragedy of this global pandemic become all too real in Bermuda, it can be difficult right now to see the light at the end of the tunnel.

From an economic standpoint, although we are yet to understand the full impact of the social-distancing measures necessarily implemented to protect us and save lives, there is no doubt that the fallout, particularly in certain sectors, will be very significant.

Celebrations this Easter were certainly in stark contrast to our usual traditions. Yet the message of the Easter story, and the arrival of spring itself, should remind us that life will return, and the economy will, in time, regenerate.

We will all have a vital part to play in writing the first chapter in a post-Covid world.

Amid the present anxiety about what the future holds, there is cause for optimism about the standing and growth of Bermuda's economic driver, the international business sector.

At the Bermuda Business Development Agency, we are thankful to the Bermuda Government for taking swift and decisive action to designate financial services as essential. This has meant that Bermuda remains completely open for international business and continues to serve clients and markets across the globe.

During this period of huge systemic pressure and uncertainty, business continuity is essential, and having the infrastructure and ability to deliver reinforces our reputation for operational resilience.

Our world-class regulator, the Bermuda Monetary Authority, should be applauded for remaining fully operational and highly engaged during the lockdown, providing the practical guidance and oversight needed to ensure continued compliance with international standards, which consistently sets Bermuda apart.

The efforts of the Bermuda Registrar of Companies should also be acknowledged as they continue to incorporate new companies and support existing companies' needs. Just last week, for example, the RoC launched its Economic Substance Declaration portal ahead of the first filing requirements due at the end of June.

So far, global discussions on issues such as the Organisation for Economic Co-operation and Development digital tax proposal have proceeded as scheduled, unaffected by the pandemic, and it is therefore more important than ever that we remain zealous in maintaining and evolving our world-class regulatory framework.

It is also important to remember that Bermuda's world-leading (re)insurance market is undergoing a renaissance. With rates increasingly hardening, the commercial property and catastrophe market has been performing strongly once again, and there has been impressive, tangible growth in other areas such as life and annuities, insurance-linked securities and captives.

There is no reason to think that this state of affairs will not continue. Despite the challenges presented, (re)insurance companies in Bermuda and others have quickly, and seamlessly, adapted. The Association of Bermuda Insurers and Reinsurers, for example, reported April 1 renewals were completed successfully, and companies are now looking ahead to the next renewal period in June.

And there continue to be important new entrants across the sector. The specialist emerging business insurer Relm was granted its BMA licence in late March, while Nakamoto, the world's first captive insurer to provide custody insurance to digital assets, was established in January this year.

Last year, of course, Bermuda witnessed the arrival of Convex, the largest Class 4 (re)insurer to enter the market for many years, and by far the largest start-up in the market's history.

In addition, many of our stakeholders in the professional services sector have reported that they are as busy as ever, and that their businesses remain strong.

Once the world of international commerce returns to some semblance of normality, Bermuda's recent regulatory achievements will stand the island in excellent stead.

Earlier this year, Bermuda returned to the European Union's Economic and Financial Affairs Council white list. The island was also recognised as a global leader in the fight against financial crime by the Financial Action Task Force. These achievements, led by the Ministry of Finance and the BMA, are even more significant when viewed in the present context.

Furthermore, Bermuda continues to hold full equivalence with the EU Solvency II Regime and is a National Association of Insurance Commissioners Reciprocal Jurisdiction in the US, providing level-playing field access to the Bermuda market. The present situation is a reminder of just how critical Bermuda's risk management expertise and substantial financial capacity is in helping communities worldwide manage severe risk.

As hard as it has been, an undeniable sense of community and togetherness has flourished. Businesses and individuals have given generous pledges and donations, supporting the national effort with a number of initiatives, including special flights to bring Bermuda residents home.

We thank and appreciate each and every one of them. Charitable support is needed and encouraged now more than ever, especially to Bermuda's third sector through the Contingency Fund — it is only by working together we will overcome this.

This global pandemic is unquestionably one of the biggest economic disrupters to visit our shores. What has always differentiated Bermuda throughout its history is its ability to adapt and respond. Historically, after market disruption, innovation and new capital have come together in Bermuda to help address newly understood risks. This time will be no different. Those with a solution, great idea and new toolkit will find no better home.

As we continue to work through this time together, our thanks go to all our essential workers keeping us safe and the country running.

Roland Burrows is the chief executive of the Bermuda Business Development Agency

Roland Burrows is the chief executive of the Bermuda Business Development Agency

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Published April 14, 2020 at 9:00 am (Updated April 14, 2020 at 8:22 am)

Room for optimism in international business

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