The Bermudian insurance plan

Ask yourself how secure you would feel if the following happened. Tomorrow you awoke to discover that you no longer have a job. Bermuda’s economy has collapsed, there are no jobs, any possessions you own that can’t be exported easily and are worthless, as is any Bermudian real estate you own. What would you do? Do you have enough savings to be able to relocate and start over off-island? Are you experienced and educated enough that foreign countries would welcome you with open arms, or would you become a refugee?

The recent poll in your paper concerning independence is disturbing and once again is likely to rehash the issue. As a young Bermudian, I strived to educate myself on the topic so that I could make an educated and informed decision if a referendum is ever held.

The reality of what I’ve learned of independence can be outlined in a very simple scenario. Let’s assume for a moment that our economy collapsed tomorrow. This assumption is being made based upon the chance that the United States or European Union (EU) decide to revise their tax or jurisdictional laws to make it no longer viable or attractive for companies to locate themselves in offshore jurisdictions. I will be very clear in stating that this assumption is void of cause from whether or not we go independent, nor speculation of who is elected in the next election.

Being that we heavily reliant on the reinsurance industry as a foundation of our economy, any such change could likely trigger a collapse of our economy and thus we could speculate the effects it would have on our island from two scenarios. The first being if we were an independent nation, the second being that we were a dependent territory of the UK, as we are today.

If tomorrow we were an independent nation and our economy collapsed, we would very quickly find ourselves in a situation where our island would no longer be able to sustain it’s people. All those with dual passports would be able to leave the island and all those with only Bermudian passports, limited education and transferable skills would effectively be trapped here. Our entire economy would collapse in on itself, real estate values would plummet and effectively all single passport Bermudians without the wealth to afford to relocate elsewhere would become imprisoned on this island. That includes every family who has limited savings and few investments in anything but real estate, especially the youth and the elderly.

If tomorrow we were still a dependent territory of the UK and our economy collapsed, every Bermudian would have the ability to relocate anywhere within the EU. Though many would never want to make this choice, in this scenario many very well may not have much of one. Having EU status, we have the right to live, work, and even collect welfare in many European countries. Just as our island has become a world center for insurance, we, as Bermudians, presently have our own insurance policy against catastrophes. Our EU status is much like our own insurance policy to defend against the potential of a catastrophic event impacting our local economy.

It matters very little what other arguments can be made in support of independence. In all reality, as a young Bermudian who doesn’t come from a rich family and has very little savings to fall back on, I would never want to make the gamble of throwing away my EU status. It does not matter how unlikely a collapse in our economy may be. The reality is, no matter what anyone says, there is always a risk of it happening and it could easily be completely out of our control.

The way I see it, our ancestors payed a tremendous price for us to have this insurance plan. I’m not about to throw it away, are you?

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One thought on “The Bermudian insurance plan

  1. BZ: All Hands!

    So heres whats happening in Bermudas blogosphere this week:
    A Limey in Bermuda has the usual Friday caption goodness, followed by his thoughts on our attempts to enforce our laughable 35kph speed limit.
    Denis Pitcher of Denis Pitch…

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