Watch out Bermuda! That is the headline that appears above an opinion piece on the state of Bermuda's work permit regulations and the risk the Island faces of insurance and reinsurance businesses going elsewhere or outsourcing.

The article was written by recruitment specialist Tim Johnson, who is executive director of London-based egsSearch, and appears in the latest edition of trade publication Reinsurance Magazine.

ejsSearch is an international executive search firm that conducts strategic hires for insurance and reinsurance related clients operating in the life and non-life sectors.

Here is the article in full, reproduced with permission from Reinsurance Magazine and Mr. Johnson:

Generally, Bermuda remains a preferred jurisdiction for reinsurers for a host of reasons: favourable tax regime, by now well developed infrastructure, a less stressful environment, and so on.

However, anything which can be seen as a constraint will naturally cause senior management to be open to other avenues. Trade restrictions of any kind are not appreciated and capital can move easily.

Good people are still interested in moving to Bermuda with all the usual caveats regarding schooling of children. In addition, for US citizens there is absolutely no advantage to being there from a tax point of view and, all other things being equal, it is probably preferable to be based on your home turf to a foreign place unless you like the lifestyle there.

The work permit situation is interesting.

Unless somebody has decided that they wish to stay long term on the island then it seems to us that people are willing to relocate even for a shorter time if there is a clear sense that they can further their careers and a stint in Bermuda can facilitate this.

It has already become a trend to move positions off island, particularly back to the US or Canada. There is a move to have more operational roles in the Eastern Provinces of Canada, some of which sit in the same time zone as Bermuda. An educated population and reasonable wage levels with IT, which means it does not matter where the roles are.

It is not feasible to get enough Bermudians to fill all the roles. I just did a Google search on UK towns with the same population as Bermuda. Neath in south Wales has a similar population.

Would you believe that once you have taken out the bakers and shop workers and so on that there would be enough people to staff up all the insurance companies? Of course not.

It is of course right and proper that a government should want the best for its electorate and population but I cannot imagine that Neath Town Council or the government of Bermuda would be so limited as to restrict themselves only to locals. You need the best for the jobs which are going.

In summary, Bermuda will stay as an excellent place to do business for the reasons given above. However, legislators must be constantly aware that there will always be other jurisdictions that are waiting to seize part of the action. Some of these will never be able to offer the infrastructure but you only have to look at the boom in the number of companies flooding into Zurich to see there are alternatives which are not putting barriers in the way.