RGBusiness Archives - RG Magazines

Sun shining on Green energy’s growth prospects

rbarbosa — Thu, 26 Nov 2020 17:51:33 +0000

Potential for hundreds of new jobs

by Jonathan Kent

The future is green for electricity in Bermuda and that means strong growth ahead for the renewable energy sector.

If there is an industry on the island that could reliably be expected to expand through these challenging times, it is green energy.

Indeed, it is probably the only industry for which growth is mandated. The Integrated Resource Plan, the blueprint for the future of the island’s electricity supply, targets 85 per cent of the island’s power supply coming from renewable sources by 2035.

Realising that vision would entail hundreds of millions of dollars of investment and hun- dreds of jobs. A report by the Rocky Mountain Institute, published this year, concludes that 750 jobs could be created over five years by pursuing 50 megawatts of solar photovoltaic capacity, or 300 jobs over five years by install- ing 30 megawatts of wind power.

Stuart Kriendler, managing director of Be Solar, a stalwart of the renewable energy in- dustry, said the industry is already generating jobs for locals. “We are training and recruiting more Bermudians in this industry, so while

some organisations have been trying to cut back, we’ve been looking to hire more people. About 60 per cent of our staff are Bermudian and the other 40 per cent spouses of Bermu- dians, so our business does not hold any work permits.”

The approval of the takeover of Ascendant Group Ltd by Canadian firm Algonquin Power and Utilities Corp promises to put wind in the sails of the green energy industry. Algonquin has pledged to invest $300 million in renewables on the island and to work with local companies.

Walter Roban, the home affairs minister, said training programmes for solar installers were being set up at Bermuda College and that a Green Energy and Environmental Justice Fund was planned to encourage more renewables investment.

Mr Kriendler said there were other good economic reasons to go green. “We’re just coming up to our tenth anniversary and we can say that we’ve helped our clients save more than $3.5 million. This is money that otherwise would have been sent off island to pay for fossil fuels.

“An investment in renewable energy keeps more dollars within our Bermudian economy. We’ve seen growing interest over the past six months, with people wanting to invest in clean, renewable energy.

“With people working from home and they see what their Belco bills are like, they seize opportunities to reduce that monthly cash outflow by making this sort of investment.”

The photovoltaic technology in solar panels has evolved over the years and is cheaper and more efficient than it was a decade ago, making return on investment more compelling.

Stratton Hatfield, of Be Solar, said: “De- pending on the property, you’re looking at a seven to eight-year average payback. Once a system pays for itself, you’re looking at 23 years of free electricity. Because solar has no moving parts, that means at the end of its lifespan, it will not stop working – you can get energy beyond that period.”

Mr Hatfield saw a clear path to growth ahead. He said: “Right now we’re under 2 per cent of the island being powered by solar. We’ve a long way to go to achieve the targets set in the IRP.”

Electric vehicles form another part of the picture. Increasing adoption could bring further benefits in terms of cutting pollution and reducing fossil fuel imports still further. Ac- cording to David Gumbs, of the Rocky Mountain Institute, charging up would cost electric car drivers between a fifth and a quarter of what they pay for gas, based on Bermuda’s electricity rates, he said.

Mr Gumbs said: “If you then transition to renewables at a lower power rate, you then get even more savings. You’re talking about another 60 per cent reduction. You’ll feel like you’re driving around for free at that point in time.”

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CONSTRUCTION INDUSTRY Looks ahead to busy 2021

rbarbosa — Thu, 26 Nov 2020 17:17:36 +0000

Fairmont revamp and Riddell’s Bay development offer opportunities

by Jonathan Kent

Construction is not work that can be done remotely, so the industry ground to a complete halt in April’s shelter-in-place period. But it has stabilised since then and has reasons for optimism looking ahead to 2021.

With a slew of major projects completed, such as the new passenger terminal at LF Wade International Airport and Belco’s new North Power Station, and another, the new St Regis hotel in St George’s almost finished, some might wonder: what’s next?

However, Alex DeCouto, of Greymane Contracting Ltd, believes there is work in the pipeline coming from several sources.

Mr DeCouto says construction “is what happens when people have enough confi- dence to make substantial investment in physical plant”.

“I don’t need to tell you the reasons why Bermuda might be seeing an uptick in inves- tor confidence at the moment,” Mr DeCouto said. “Our handling of the pandemic has sure- ly caught the eye of some people who value that kind of safety.

“We are also seeing lots of movement
in the reinsurance industry in the form of takeovers and new businesses that could po- tentially fuel an increase in employment and physical presence on island. The ‘why’ might be up for debate, but on the face of things I would say that we have reasons to believe that investor confidence is ticking up.”

On the residential side, confidence also ap- pears to be on the up, Mr DeCouto said, with anecdotal evidence of healthy demand, some of it stemming from the work-from-home phenomenon.

“Whether it be for the digital nomads or people looking to improve their ‘at-home’ experience, the chatter I am hearing from ar- chitects and contractors is that their forward order books are quite busy,” Mr DeCouto said. “I’ve also seen flashy adverts teasing the new development at Riddell’s Bay, which should create a bunch of new-build opportunities.”

Permission to develop homes on 18 lots on 23 acres on the site of the former Riddell’s Bay Golf Course was given under a Special Development Order in June.

There is also one large, commercial project looming, the $100 million refurbishment of the Fairmont Southampton before it reopens in April 2022.

Mr DeCouto said: “All indications seem to be that they intend on pressing ahead with a substantial renovation of the entire property. This is obviously good news and I am keeping my fingers crossed for this one for Bermuda.”

While that is the only “megaproject” the Greymane boss sees on the horizon, he added: “I would almost rather see a ‘rising tide’ of local commercial property investment, as it will be like having more eggs in more bas- kets and will be indicative of rising business confidence.

“While it might be hard to envision a return on investment in a retail store or a restaurant at the moment, there are other businesses that are doing well and might benefit from physical investment.”

The pandemic has thrown the future of the office, as the traditional workplace, into some doubt, as businesses adapt to having staff working from home and physically distanced on site.

Mr DeCouto is not convinced employers will give up altogether on the office. From his own experience with his office-based staff, he said having them together in the office for at least some of the week was “much more efficient and effective than working 100 per cent remotely”.

“I’m not exactly sure at this point what the impact will be on the traditional office layout, but I do know that any change is likely to result in construction work,” he said. “From that perspective I have some optimism that investment in office reconfiguration will see an increase in 2021.”

Another traditional source of construction work is government capital projects. The need for emergency funds to deal with the social impact of the pandemic put the squeeze on public-sector capital spending in the spring. Since then the Government has bolstered available funds through a $1.3 billion bond issuance.

Curtis Dickinson, the finance minister, said last month that some of the proceeds will be used to bring forward some aspects of the Government’s long-term capital plan. “These capital projects will support our economic re-

covery, provide employment for Bermudians, while improving our quality of life,” Mr Dick- inson said. The Government would provide up to $90 million for capital investment focused on construction projects for the fiscal year 2020-21, he added

Mr DeCouto said: “The Government’s position is rather delicate when it comes to capital projects, especially as PPP [public-pri- vate partnership] projects have been heavily politicised. That’s a pity, because I think there may be more opportunities with private finance in the future.

“They maybe have seen potential with this new arbitration centre on Parliament Street which seems to be using a lease-back model. I would have liked to have seen this opportu- nity presented to local developers and am not sure why it wasn’t.”

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Class of 2020 brings economic booster shot

rbarbosa — Thu, 26 Nov 2020 16:53:31 +0000

Bright year in prospect for Bermuda insurance market

by Jonathan Kent

Devastating catastrophes tend to inspire a new appreciation for the value of insurance. So it has proved this year with the monumental impact of the Covid-19 pandemic, on top of a higher than average incidence of natural disasters, such as hurricanes and wildfires.

Rates for insurance and reinsurance were rising before Covid-19 unleashed itself on the western world and most in the industry expect that hard market will last throughout 2021 and beyond.

In the words of Richard Brindle, chief exec- utive officer of Bermudian reinsurer Fidelis, this is the first real hard market since 2002, which followed the 2001 terrorist attacks on New York and Washington.

Rates had risen briefly after some of the major losses of recent years, but any nascent rising trend rapidly fizzled out. Some have at- tributed the smoothing out of the reinsurance cycle’s traditional peaks and troughs to the growing insurance-linked securities market. But three years of above-normal catastrophe losses, with loss creep meaning claims from previous events continue to climb, have left much capital “trapped” in ILS – one of several factors driving today’s hard market.

For Bermuda, the insurance pricing spike is a welcome silver lining during tough eco- nomic times. According to Maamoun Rajeh, chairman and chief executive officer of Arch Worldwide Reinsurance Group, the industry has seen inflows of about $12 billion this year, much of it coming to Bermuda.

Most of the new money has been raised by existing companies. The likes of Renais- sanceRe, Fidelis, Arch Capital, Hiscox and Lancashire Group have raised billions be- tween them through sales of debt or equity.

There are also some start-ups in the pipeline. These include the new Class 4 reinsurer being set up by Lloyd’s insurer Chaucer, which is owned by China Re, and Vantage, a start-up headed by former Arch chairman Dinos Iordanou and former Axa XL CEO Greg Hendrick, reportedly with about $1 billion in initial capital.

Then there is Conduit Holdings, which raised $1.1 billion in an initial public offering of shares on the London Stock Exchange with the aim of setting up a new Bermudian reinsurer. Conduit was founded by industry veterans Neil Eckert, who will be the new company’s chairman, and Trevor Carvey, one of the founding underwriters at Arch Re Bermuda, who will be CEO.

Add to that Convex Group, the new re/ insurer set up last year by Stephen Catlin and Paul Brand with $1.7 billion of committed capital, a company that will be moving up the gears towards top speed in the coming months, and it is apparent that the Bermuda marketplace is looking more buoyant than it has done in years.

Bermuda has seen nothing like this since 2005, when companies including Validus Holdings, Flagstone Re and Ariel Re launched in the wake of hurricanes Katrina, Rita and Wilma. This year’s flurry of activity follows a prolonged period of consolidation for the industry, which has caused the number of standalone companies operating on the island to shrink.

The fact that Bermuda is attracting the lion’s share of the new money is significant in terms of the island’s ongoing status as a global re/insurance hub, according to Mark Chudleigh, lead partner in Bermuda for inter- national law firm Kennedys and an expert in financial services and corporate litigation.

“Despite doubts being expressed earlier this year about whether Bermuda would retain its ‘most favoured’ status for new ventures, it is now clear that Bermuda is still regarded by both incumbent Bermuda insurers and the sponsors of new capital as the place to be, particularly for underwriting US-based risks,” Mr Chudleigh said.

“We are seeing a combination of start-up re/insurers, managing agents who underwrite on behalf of capital providers, as well as established reinsurers who are raising additional capital to expand existing business lines or to branch out into new areas.”

While the influx of capital will give the lo- cal economy a shot in the arm, the number of jobs at the billion-dollar start-ups is unlikely to be what it was in 2005. The Convex model may be the blueprint for the modern re/insurance start-up.

Convex has deployed “horizontal outsourcing”, meaning it uses a single outsourcing firm, an Indian-headquartered company called WNS, for everything, as Mr Catlin explained in an interview with The Royal Gazette last year. The upshot is an absence of back-office jobs in Bermuda, although the island gains many higher value roles.

“Employment costs here are as high as they are anywhere,” Mr Catlin said. “Any people you employ here, or in London, have got to be adding value to the balance sheet. Those servicing the balance sheet can do it from elsewhere.”

Nevertheless, Mr Catlin hoped to have a staff of about 50 working at Convex’s reinsurance arm in Bermuda when it is fully up to speed.

Mr Chudleigh said the scale of the Class of 2020’s impact on the domestic economy was questionable. “Of course, there will be new jobs and new arrivals of reinsurance professionals looking for housing and schools,” Mr Chudleigh said. “But I do not expect to see anything on the scale of 2005 or prior start-up waves.

“The prolonged soft market has forced insurers to focus on expense reductions, which included the increased use of technology and ‘offshoring’ to low-cost jurisdictions like India, developments which tend to reduce opportunities for positions that are typically filled by Bermudians.

“This trend has accelerated as a result of the work-from-home revolution: why have an accounts processor working from home in Bermuda when you can hire one in Halifax or India for much less?”

A significant proportion of the island’s air arrivals traditionally come to the island on business, many of them here to negotiate insurance deals. Their stays tend to generate a lot of hospitality dollars, but the success of remote working this year could deplete that business, Mr Chudleigh fears.

“There has been a virtual cessation of business visitors, including insurance buyers and their brokers who may visit for a full week of meetings with golfing and dining thrown in,” Mr Chudleigh said.

“Will these high spending visitors come back in numbers when things return to ‘nor- mal’ or will remote transactions become the norm? If so, does a reinsurer need a big, prestige office with reception and secretarial staff, a large entertainment budget and an on-call taxi driver to ferry business visitors around?” The more high earners are based in Bermuda, whether they be Bermudian or not, the more benefit there is to the economy, since they are likely to be substantial spenders.

Malika Taylor, managing director, Bermuda, of recruitment firm Expertise, stressed that the island had to be as welcoming to new people as it is to new money in order to maximise economic benefits.

Ms Taylor said: “Bermuda continues to welcome financial capital. Our laws, the BMA and our reputation are all optimal. But on welcoming human capital, we lag other jurisdictions.

“To ensure we maximise every economic opportunity we must continue to look to immigration reform and position Bermuda as a leading place to live and work by 2021.”

Ms Taylor reiterated the view she first expressed In a video roundtable discussion on the economy, hosted by The Royal Gazette in August, when she said: “For Bermuda to be successful in the future and maintain a healthy, economically viable community, it needs to get back to being an excellent host.

“The critical point for Bermuda to recog- nise is that everybody who is working from home in Bermuda does not need to be here. We can successfully host tourists who come to Bermuda — a safe environment in this Covid world. We have to pay just as much attention and be just as great hosts to guest workers and individuals, who right now are choosing to work from Bermuda.”

Not all insurance workers will need to brought in, given that Bermuda has built a strong talent base of its own over the past three decades. More than two-thirds of the entire payroll of members of the Association of Insurers and Reinsurers are either Bermudians, spouses of Bermudians, or permanent residency certificate holders.

Mr Chudleigh said: “We have seen a whole generation of Bermudians working their way up in the insurance industry and now occupy- ing mid-level and senior positions.

“The nature of the business is such that there will always be a need for a large number of skilled guest workers, but there are many more Bermudians occupying skilled posi- tions now than there were when the ‘Class of 2005’ arrived. Arguably, the opportunities for ambitious, educated, young Bermudians have never been better.”

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Silver linings amid the gloom for tourism

rbarbosa — Thu, 26 Nov 2020 16:38:22 +0000

Health and safety a key attraction for Bermuda

by Jonathan Kent

Tourism faces a long and rocky road back to normality. A sector important for the jobs it provides and supports, and the foreign currency it brings in, was chopped off at the knees with the three-month airport closure and the sudden and complete loss of cruise ships.

Hotels and tourism-reliant businesses were shut down, thousands were laid off and many made redundant. Air arrivals have gradually picked up since the airport reopened in July, but a second wave of the virus in the US and Britain has caused the temporary suspension of the British Airways flight.

Cruise ships have been absent from April onwards, causing pain to the taxi and minibus drivers, retailers and tour operators who rely on them. In the last three quarters of 2019, Bermuda welcomed more than half a million cruise visitors, this year there have been none over the same period.

To say it’s been a tough year would be an understatement. But Glenn Jones, interim chief executive officer of the Bermuda Tourism Authority, says the mood in the industry has been lifted by Bermuda’s relative success in controlling the virus.

“Talking to them about where we are versus our competitors gives them a lot of optimism,” Mr Jones said. “Tourism is going to recover. This is a matter of how long does it take and how many tourism businesses can sustain themselves for that length of time.

“Our tourism recovery started in July and hasn’t regressed. Every month has been a positive step forward. Some of our competi- tors still haven’t opened up, or have opened up and had to shut down again.

“The recovery will still be longer than 12 months, for sure, but I think we’re going to get to a period that feels like recovery much faster than our competitors. And I hope that means we will lose a lot fewer businesses along the way.”

Based on what we know today, Mr Jones said a full recovery was unlikely before 2022, although much could change in the mean- time.

The BTA interim CEO said Bermuda’s health and safety record is a “differentiator” that leads the conversation with travellers, and which had produced spin-off benefits already, particularly in sports tourism as organisers seek safe venues.

In October the island hosted sailing events, the Bermuda Gold Cup and a World Match Racing Tour event, rescued by coming to Ber- muda. The Bermuda Championship was the first PGA Tour event to welcome spectators since the onset of the pandemic. And then there was the bonus of the World Tens Series rugby event.

“We were not even on their radar,” Mr Jones said. “We spoke to an organiser who said they had basically searched every con- tinent to find a place where they could hold the event. Bermuda was one of the few places where it was possible to do it safely, so they came here. They had a very good experience and they’re already talking to us about poten- tially coming back next year.”

Among next year’s sporting events will be the World Triathlon Series season-ending event in October and a potential spring US Tennis Foundation event. Also, confirmed only this week, is SailGP’s season-starting in April. The event will feature the same 50ft catamarans used in the 35th America’s Cup in Bermuda.

Eight teams – Australia, Denmark, France, Great Britain, Japan, New Zealand, Spain and the United States – will stay on the island for a four-week training camp ahead of the April 24-25 races on the Great Sound in the Bermuda Grand Prix presented by Hamilton Princess.

SailGP will be a huge draw to the big-spending superyacht crowd, a top BTA target. Mr Jones said: “We know this group is attracted to events and when they come, they stay for weeks longer – we saw this during the America’s Cup. This is a thrilling opportunity that not only offers Bermuda significant eco- nomic stimulus and international exposure outside the summer months, but also presents local business opportunities and community engagement benefits for our young people.”

Airlift, crucial to tourism’s success, has gradually been recovering since the airport reopened. Flights to Bermuda in July had only 10 per cent of the seats available for the same month in 2019, 20 per cent in August, 23 per cent in September and 33 per cent in October.

“Having that steady increase is giving us a steady pathway to recovery,” he said. Howev- er, Mr Jones is concerned by the prospects for winter airlift, as a result of the suspension of the BA flight and US airlines focusing on only the most popular routes.

At the end of March next year, BA will switch to Heathrow from Gatwick for its Lon- don-Bermuda service, something that would improve links to Europe, Mr Jones said.

Hotel room inventory will also influence airlift in the year to come. In April, the new St Regis Hotel in St George’s is due to open, the same month as the Rosedon reopens its doors. The new Bermudiana Beach Resort will open in July. Elbow Beach is expected to reopen, but the date has not been determined.

This activity will help to offset the more than 600 rooms that have been lost from the closure of the Fairmont Southampton, the island’s largest hotel, for a $100 million overhaul.

Mr Jones has mixed emotions about that, sad at the hundreds of workers impacted, concerned about the impact on airlift, but excited by the prospect of the refurbished hotel reopening in 2022.

“It’s the number one groups and con- ventions hotel,” Mr Jones said. “Perhaps the best time to take a pause is when groups and conventions are taking a pause. For that to be coming back online in April 2022, around the time the conventions season restarts, would actually be tremendous. Those planners look for new places to go.”

Another consequence of the closure is that smaller properties become more competitive in the absence of the Fairmont. “If you are Cambridge Beaches, The Reefs, or Newstead, the fact that you aren’t, at this moment, com- peting with the Fairmont Southampton, puts you in a stronger position than if you were,” Mr Jones said.

With regard to cruise ships, Mr Jones said the BTA has been working with health offi- cials to work out what the Bermuda standard will be for arriving passengers and he wants the island to remain ahead of the curve. “We should sort out with stakeholders like the Government and Wedco how we should open safely. If we do that now and get finished within the next 60 or 90 days, it puts us in the driver’s seat to tell the cruise industry, this is how Bermuda is going to do it safely, can you meet this standard?”

April 1 “feels right” as a potential re- sumption date, he added. Much depends on adherence to the framework developed by the Centres for Disease Control and Prevention in the US, under which cruise lines will eventually be able to resume passenger voyages with strict health protocols.

Inspiring residents to take “staycations” was part of the BTA’s “inside-out” marketing strategy to help hotels stay afloat and get their staff back to work.

“The hoteliers tell us that the staycations have been way stronger than they projected when deciding to reopen,” Mr Jones said. “There have been weekends when our hotels have been sold out, with the combination of people doing staycations and visitors.” The Work From Bermuda certificate, al- lowing international remote workers to work from Bermuda for a year has been a boon to tourism, in more ways than one.

Mr Jones said: “We believe this group spends a lot in the tourism economy, more so than the typical resident. They’re more likely to book a jet ski, take a boat trip, play golf and eat out.

“It’s also been the best publicity generator for Bermuda this year, with stories talking about the Bermuda lifestyle that is attractive to visitors. By our count, we’ve seen $2.6 mil- lion in combined media value just from media organisations talking about the Work From Bermuda certificate and more than a billion impressions.”

Vacation rentals have benefited from digi- tal nomads. Hotels have introduced extended stay pricing for this market, while electric car firms are looking at month-long and quarterly rentals.

Traditionally, the leisure travel had been largely a volume play, based on numbers of visitors, Mr Jones said. “Maybe the play now is how long can we get a visitor to stay and how much can we get them to spend per day while they’re here.”

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Ready to see the back of 2020

rbarbosa — Thu, 26 Nov 2020 16:28:51 +0000

Expert sees an uneven economic recovery ahead

by Jonathan Kent

Most of us will be delighted to see the back of 2020, a year that forced fundamental changes to the way we live and plunged us headlong into economic turmoil.

The onset of the Covid-19 pandemic brought us shelter-in-place and the closure of our airport for three months, cost many hotel, restaurant and retail workers their jobs and caused thousands more to be laid off or suffer wage cuts. Working from home has become normal, rather than exceptional, while travel plans were scrapped and the tourism indus- try ground to a virtual halt.

In 2019, the sight of someone wearing a face mask entering a bank or service station would have signalled the arrival of a robber: in 2020, it became required attire for us all.

This is all besides the human tragedy of those who died or became seriously ill as a result of the virus.

All eyes are now looking in hopeful antic- ipation to 2021. What will economic recovery look like?

RG Business has spoken with businesspeo- ple from multiple sectors to get their outlook on the coming year. While it was clear that the pandemic has beaten down some indus- tries more than others, many of our inter- viewees viewed 2021 with cautious optimism, displaying the resilience, ability to adapt and

can-do spirit of Bermuda’s business commu- nity.

But there was also an acknowledgement that some sectors, particularly retail, restau- rants and tourism, would need help to survive until better days, from breaks on taxes to lo- cals making an extra effort to patronise their businesses.

While most of us would yearn for a V-shaped recovery, Nathan Kowalski, chief financial officer of Anchor Investment Management and financial columnist for The Royal Gazette, sees the more likely scenario as K-shaped. That means a two-speed recovery, with those in international business doing

well, while many parts of the domestic econo- my continue to struggle.

Mr Kowalski said even though gross do- mestic product figures may not look so bad, that will not tell the story of those who are suffering. “Many jobs in areas like hospitality and restaurants have gone,” he said. “With those positions not available, there will have to be some retooling and retraining so that skill sets can match job options.”

Struggling sectors will inevitably turn to the Government for help, but public finances are also stretched.

The Government said last month it had paid out $56.8 million in financial aid to more than 10,000 people since the start of April.
It has also committed $12 million to support stricken small businesses through the Ber- muda Economic Development Corporation, and millions more in waived taxes, duties
and fees. All this, while revenue from tour- ism-based taxes, on air and cruise arrivals and hotel occupancy, have slumped to minimal amounts.

Faced with a large deficit that will propel its debt burden close to $3 billion, the Government will seek extra revenue from somewhere, but Mr Kow- alski urges Curtis Dickinson, the finance

minister, not to pull the usual levers. “The two major sources of government

revenue are payroll tax and Customs duties,” he said. “But I’m not sure there is any leeway to increase those right now.” For businesses, he said that would be like “punching them as they get up off the floor”.

He added that the Government should
also pursue tens of millions of dollars of unpaid back taxes more aggressively. Allow- ing companies to avoid paying what was due disadvantaged competitors who played by the

rules, he added.
For several years, the Government – both

Progressive Labour Party and One Bermu- da Alliance administrations – have looked at ways of broadening the tax base. In the

Throne Speech this month, the Government signalled an intention to introduce a capital gains tax.

Mr Kowalski said the Government’s debt burden was less of a concern than the health of the economy, given a successful $1.3 billion bond issuance this year that had not only sup- plied projected borrowing needs for the next two to three years, but had also rolled over existing debt, securing a lower interest rate in the process, and extended durations.

However, while Bermuda maintains an A rating from Standard & Poor’s that helps it to secure low borrowing rates, Mr Kowalski said the Government must act to protect it.

“You need to show the rating agencies that you’re fiscally responsible,” Mr Kowalski said. “Reducing government expenses has to be part of the equation.”

Public-sector unions agreed to a 10 per cent pay cut for one year from September 1, as well as a freeze on contributions to social insurance and the Superannuation Pension Fund. Mr Kowalski said more was needed, changes that would reduce the Government’s cost structure, such as a privatisation pro- gramme, as recommended in the Sage Report. Privatisation need not cost any jobs, he point- ed out, and would give government workers the opportunity to become business owners.

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Is a real estate career right for you?

RG Mags Staff — Mon, 04 Nov 2019 18:47:32 +0000

Pros and cons of working in a key Bermuda industry

by Susan Thompson
When someone thinks of real estate, they naturally think of working as a real estate agent, but there are other careers in real estate as well …. appraisers and property managers for instance.

In Bermuda to qualify as an appraiser you need to be RICS (Royal Institution of Chartered Surveyors) certified which requires an undergraduate degree or postgraduate degree, joining a firm as a trainee surveyor, getting experience and taking your APC (Assessment of Professional Competence) structured training.

You don’t need a college degree to become a real estate agent or property manager, although education is typically helpful in any career you pursue. Starting out, you’ll have to pass a government-set exam that is offered monthly at the Bermuda College. The exam itself can be challenging, so make sure you study.

Imagine working in a flexible career where you can set your own schedule with annual earning potential of $100,000-plus. There are so many reasons to choose real estate as your career. But there are always two sides to every story, and a real estate career is no different.

At first, your cashflow direction will be mostly out. You will need a good cell phone data plan, reliable transportation and funds for marketing yourself. Most new real estate agents need a nest egg to begin their careers.

Getting your first sale to come in will take some time, and it will likely be a couple months or more before you get paid. Depending on the market you cover and existing relationships you can farm, it can be a feast or famine situation.

Having a flexible schedule in real estate means you have to be flexible to the customer/client’s needs. In real estate, you tend to work when everyone else is not and that includes weekends.

You aren’t going to become a top agent at a top real estate company immediately. You really have to pay your dues, and prove that you have what it takes to be successful, which can take years.

As a realtor, you will be taking on a lot of jobs and wearing many different hats. This means that your work is never going to get boring. The job involves showing property, negotiating terms, working with attorneys and bankers, holding open houses, marketing yourself, following up and lots of networking.

Real estate can also be extremely emotional as we are dealing with people’s home and finances and the reason for selling is not always a happy one.

When it is all said and done, a job in real estate is not easy, it is a lot of hard work, but it can be fulfilling and the people that work in this industry love it.

If you have been considering a career in real estate, don’t believe what you have seen on TV, do some research on the topic the same as you would with any career move.

This article was originally featured in the TOP TEN 2019 edition of the RG Business Magazine.

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Follow the PIPA

RG Mags Staff — Mon, 04 Nov 2019 18:40:22 +0000

Safeguarding employees’ personal information

by Juliana Snelling and Olga Rankin

Protecting private records from exposure has always been important, but the advancement of digital technology has exacerbated the need to guard against the misuse of personal information, or data.

Perils include identity theft, phishing scams, cybercriminal activities, fraudulent credit card and banking charges, and any number of other threats. In response, Bermuda has adopted data protection legislation, the Personal Information Protection Act 2016. The majority of PIPA has not yet come into force, but employers are advised to prepare to comply in anticipation of its expected commencement in the near future.

PIPA is particularly important for employers because everyday business operations necessitate the processing of personal information relating to employees, clients and professional contacts for purposes that include recruitment, administration, AML/ATF compliance, background checks, government surveys, health insurance, sick leave monitoring, billing and payroll, etc.

PIPA is designed to control the way businesses collect, store and process personal information. “Personal information” relates to any detail identifying a person by reference to certain attributes, such as name and address, date of birth and other identifiers. PIPA offers stronger protections for “sensitive personal information” covering, for example, origin, race, gender, sexual orientation, family status, physical or mental disability, religious beliefs, political opinions, trade union membership, biometrics or genetics, etc.

Such information may only be obtained if the nature of the employment justifies it but may never be used without the person’s consent or to discriminate in any way.

Employers must use personal data in a lawful and fair manner and put in place security safeguards to protect it against loss, unauthorised access, disclosure or destruction. They must ensure that it is accurate and current and not kept for longer than is necessary. They must also appoint their own Privacy Officer to ensure compliance. PIPA itself will be overseen by the new office of the Privacy Commissioner who will have power, inter alia, to conduct investigations and issue warnings.

Employers must also publish a “privacy notice” containing the organisation’s data practices and policies, including the purpose for which the data was collected and the name of the Privacy Officer. The criminal penalty for non-compliance is severe – a fine of up to $25,000 or two years’ imprisonment, or both, while the penalty for an organisation is a fine of up to $250,000.

Where a Bermuda entity transfers personal data overseas for a third party’s use, the Bermuda entity will remain responsible for compliance with PIPA. This is of vital importance for multinational employers who routinely exchange personal data about their staff across national borders.

The implementation of PIPA will allow Bermuda to apply for EU “adequacy” status, which allows data to flow freely to and from a non-EU country without the latter having to implement costly safeguards. Offshore jurisdictions already enjoying this status include Jersey and the Isle of Man.

More fundamentally, the commencement of PIPA will help bring Bermuda closer into line with international data protection standards, thereby enhancing our island’s reputation as a place that will not tolerate the abuse or misuse of data concerning its people.

Juliana Snelling is director of Canterbury Law Ltd and her colleague Olga Rankin is an associate attorney.

This article was originally featured in the TOP TEN 2019 edition of the RG Business Magazine.

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London calling

RG Mags Staff — Mon, 04 Nov 2019 18:35:09 +0000

Bermudian lawyers-in-training get opportunities abroad with Kennedys

Gaining experience overseas is a great way for young Bermudian professionals to advance their careers.

Young Bermudians with global law firm Kennedys have been discovering opportunities abroad since the firm opened its office on the island in association with Bermuda firm, Kennedys Chudleigh in October 2017. Kennedys, which has its origins in the London insurance market, has expanded to 37 offices in 22 countries with an emphasis on supporting the re/insurance industry.

On joining Kennedys, Mark Chudleigh, Bermuda office head, was keen to explore with his new partners opportunities for providing training for Bermudian law graduates at Kennedys’ overseas offices. As a Bermudian who trained and worked as a lawyer in London for 18 years before returning to the island, Mr Chudleigh knows the value of such opportunities.

“While Bermuda has some excellent law firms, it can be difficult to provide well-rounded legal training in commercial law in Bermuda, as the firms tend to be relatively small and lack the training infrastructure and range of opportunities for hands-on experience that a large London firm can provide,” Mr Chudleigh said. As a consequence, he believes, relatively few Bermudians are able to rise through the ranks of Bermuda commercial law firms. This, he says, leads to firms having to look abroad to recruit lawyers who have gained the necessary experience in major financial centres like London.

Less than two years on, three Bermudians, Katherine Freisenbruch, Alex Cooper and William Finnerty, are training with Kennedys in London and a fourth, Jonathan Marion, will join them next year. Bermudian law graduate, Michael Cabot, has joined Kennedys’ London office as a legal assistant in its financial institutions and political risk division.

At the conclusion of their two-year training with Kennedys, the graduates will be eligible for admission as solicitors in England and Wales as well as barristers and attorneys admitted to the Bermuda Bar.

Ms Freisenbruch, who joined the London office in 2018, was attracted to Kennedys for its insurance pedigree and global reach, citing its presence in locations such as London, Hong Kong and New York as well as Bermuda. She said: “The advantages of a London training include access to a wide variety of specialty teams spanning areas such as casualty coverage, financial lines and political risk, professional indemnity and medical malpractice. You gain invaluable experience of the London insurance market, under the shadow of Lloyd’s, and a chance to develop key client relationships with secondment opportunities.”

Mr Finnerty, who joined Kennedys in London in July, agrees that there can be an advantage to gaining London legal training and experience before returning to practice in Bermuda. He said: “Kennedys places great importance on supportiveness, approachability and work-life balance. After speaking with trainees during open days and the assessment process, and hearing their positive experiences of the firm, I was convinced Kennedys would be a good fit for me.”

During his time with Kennedys in London, Mr Cabot, has seen the scale of the office’s commercial and litigation work. He praises Bermuda’s success as an international financial centre, but values the broad range of work and exposure to different practice areas in London at this early stage of his career.

Such is the success of Kennedys’ Bermudian trainee programme that the firm is now inviting applications for a sixth aspiring Bermudian lawyer, with a two-year London training contract available from September 2021. The firm will also consider Bermudians with US bar admissions for positions with its New York office.

“I see this as a win-win-win situation,” Mr Chudleigh said. “The Bermudian law graduate receives quality London training, we will have opportunities to have bright, experienced and well-trained Bermudian lawyers join us in Bermuda in the future and Kennedys London is able to recruit high quality law graduates who are attracted to the firm’s strong Bermuda and insurance industry connections.

“Bermuda is also a winner as hopefully they will return and contribute as members of Bermuda’s legal community, whether in private practice or from in-house positions.”

This article was originally featured in the TOP TEN 2019 edition of the RG Business Magazine.

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Toyota Rush

RG Mags Staff — Mon, 04 Nov 2019 18:34:52 +0000

by Ian Hind

Worldwide, the SUV and compact SUV markets continue to grow at the expense of the traditional saloon car. In fact, I believe the compact SUV, whether it be diesel, gas, hybrid or electric powered, will become the dominant sector. And so just about every manufacturer in the world from BMW to Bentley now offers an SUV in its lineup.

Toyota rushed out (sorry, I just had to write that) the third generation Rush in early 2018 in Indonesia and the Philippines. It’s built exclusively for the Asian and Caribbean market, is nearly identical to the Daihatsu Terios and shares the same platform and engine as the Toyota Avanza. There are some minor upgrades to the 2019 model.

You get a lot of metal, plastic, rubber, cloth and leather for your money. At 4,435mm long and 1,695mm wide, this compact SUV just fits in the maximum allow able length and width for private cars in Bermuda. Additionally, low overhangs at the front and rear mean cabin space is maximised.

Thus, the Toyota Rush can accommodate three rows of seating. And it looks big. It has a commanding appearance that is reminiscent of the larger SUVs that are not available in Bermuda. Strong character lines and bulges around the rear wheels and front of the bonnet/hood lend it a sporty look with a rugged appeal.

Inside, the cabin feels spacious, with plenty of legroom and headroom for the front passenger and driver; likewise for the middle row passengers. Unless you are very tall and or large, you

can even sit comfortably in the third row, with some headroom, and room for your feet under the seats in front. For cargo hauling, the second and third row seat backrests fold down providing a flat load space. The third row can also be folded forward to create even more rear load space.

And if you like your coffee on the go, you’re well accommodated with three cup/bottle holders between the front seats, two in each front door, two in each rear door and one on either side of the third row of seats. Thirteen in total! The view of the instrument panel is uncluttered by the steering wheel and, in this digital age, there is plenty of info on display including the usual speedometer and tachometer plus a fuel efficiency gauge.

The 1.5-litre engine is naturally aspirated (i.e. not turbocharged) producing a maximum 77kW (103hp) delivered through a 4-speed automatic gearbox, which is okay, but with a driver and six passengers, the Rush is not going to be the swiftest in the stable. Even with just the driver, it didn’t exactly rush (sorry) up Barker’s Hill when pushed. I highly recommend that Toyota consider turbocharging the engine. It’s the way many vehicles of its size and class have gone in order to produce more power, improved fuel consumption and lower emissions from smaller engines.

Nevertheless, the drive was smooth, the ride firm, verging on stiff, with minimal roll on bends, even with this big empty box. The firm ride is no doubt a factor of driving with no passengers. Seven up, the stiffness will give way to a softer ride.

In Bermuda, we have two models to choose from. Both are licence Class H, with the XF starting at $44,900 and the slightly more up-market RG from $48,700. Both models have all the usual bells and whistles plus 16in alloy wheels, hill-start assist control, vehicle stability control, rear-view camera and sensors, LED headlamps, automatic a/c with rear a/c in the roof, radio/USB/Apple Car Play and Android and 12V/60W accessory sockets everywhere. The RG model also comes with electric fold-in mirrors, leather steering wheel, 17in alloy wheels, smart entry and auto headlight setting.

To check out the Toyota Rush and maybe schedule a test drive, contact Bermuda Motors on Church Street.

This article was originally featured in the TOP TEN 2019 edition of the RG Business Magazine.

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Perfecting performance

RG Mags Staff — Mon, 04 Nov 2019 18:34:37 +0000

Getting the best out of staff

by Annabel Cooper
How many of us are familiar with the process of trying to remember our achievements for the previous year while also attempting to list impressive goals for the year ahead, before waiting nervously outside the boss’s door for that dreaded corporate ritual — the annual performance review?

“I think that every single cycle starts with tremendous potential and the majority ends in a lack of execution,” Kelly Francis, founder and president of Performance Solutions Ltd, said. “There’s a very thin line between a useless check box exercise and something constructive with tangibles that can be acted upon.

“There’s so many areas where it can fall down and nothing is done. The problem is the lack of use of the information. Either employees or managers haven’t communicated all year long. No one should come out of a review session surprised by the content unless they are pleasantly surprised.”

Instead, Ms Francis believes the “big, annual summit meeting” should be broken down into more regular, real-time meetings.

“I think it would be more relevant, actionable and reasonable if shorter reviews were done more regularly,” she said. “Around three times a year, or two at a minimum. Transparency and engagement are the two things that keep the employment ship sailing smoothly.”

It is this more regular, real-time feedback that seems to be the method of choice among more forward-thinking companies, along with extra support and training to help employees reach their goals.

This approach particularly resonates with the millennial generation. According to a research report published by Adobe, close to two thirds of millennials said they would switch jobs to a company with no formal performance review if pay and job level were the same.

LaKea Dill, talent manager at Deloitte Bermuda, explained that her firm has moved away from the traditional evaluation process and adopted instead the “Deloitte Global Performance Experience”, which is used in 98 per cent of the company’s offices around the world. Its objective is to accelerate performance not just manage it.

“Performance management processes need to provide continuous engagement that ultimately treats employees as consumers,” she said. “By removing the traditional annual employee evaluation process, it uses data-driven metrics that are created by flexible goals and frequent, real-time interactions, coaching and performance feedback.”

Ms Dill also points to external research showing that 83 per cent of millennials are actively engaged when they believe their organisation fosters an inclusive culture.

The Deloitte process involves frequent, future-focused “check-ins”, which are conversations between team members and their direct supervisors to discuss near-term work and provide “real-time feedback”.

Deloitte Bermuda also provides Career Coaching sessions, has a “performance snapshot tool”, which is a team leader’s first-hand assessment of a team member’s performance at the current point in time, and takes “pulse surveys”, which are short engagement surveys designed to give the team leader insight into how the team is feeling about a project, the work, and their environment.

“Once we better understand our strengths and weaknesses we are more likely to succeed. When we have a sense of purpose and feel that we are making an impact that matters, loyalty and a strong work ethic is a natural result,” Ms Dill said.

This article was originally featured in the TOP TEN 2019 edition of the RG Business Magazine.

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