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By JONATHAN KENT, a business reporter in Bermuda

Paula Cox is new leader of the Bermuda government after she was handed a handsome victory over challengers Terry Lister and Dale Butler by delegates of the ruling Progressive Labour Party (PLP).

Cox, who makes the step up to premier from deputy premier, is a familiar figure to the Bermuda insurance community, having served as Bermuda's finance minister for the past six-and-a-half years. Her political career began when she was voted into her Devonshire North seat in 1996, and since the PLP took power 12 years ago, she has headed the Labour & Home Affairs and Education ministries, before succeeding her late father Eugene Cox at Finance in 2004.

Softly spoken and with a reputation for listening to differing opinions before making decisions, Premier Cox brings a marked contrast in style from medical doctor Brown, who was seen by many as confrontational and intransigent.

A British-trained lawyer, in her professional life she worked as a corporate counsel for global insurer ACE Ltd., following a stint at the Bank of Bermuda (now HSBC Bermuda) as senior legal counsel of global funds services. (Paula Cox handed in her notice at ACE on Tuesday, Nov. 2, so she can concentrate fully on her duties as Bermuda's premier and finance minister.)

TIME'S UP FOR TIME LIMITS?

Insurance industry sources have welcomed Cox's election. Some are breathing a sigh of relief at the exit of Brown.

"She was the logical choice because international business is our mainstay, and Paula Cox understands it much better than anyone else in her party--including the last Premier," said insurance industry veteran Robin Spencer-Arscott, the deputy chairman of reinsurance intermediary AAA Risk Solutions Ltd.

Spencer-Arscott, who is also a director of Omega Insurance and former chairman and CEO of Aon Bermuda Group, urged the new premier to review the work permits time-limit policy, which requires most foreign workers to leave after six years. Insurers claim that this makes it harder to attract and retain talented staff.

"People here have companies to run, and we can't tell them willy-nilly that they have to go now," Spencer-Arscott said. "A lot of companies have footholds in Europe, and they can move their whole company overnight.

"The time limits are not helping Bermudians. We have a lot of good, young Bermudians working in the industry, but they'll be out of a job if companies go. The important thing is that we see common sense in dealing with this issue," he added.

On Monday, Cox announced a reorganization of government ministries, which will see responsibility for the work-permit regime move from David Burch to Kim Wilson, who will head the new Ministry of Economy, Trade and Industry. This move is likely to be welcomed by business, as Burch's public statements were frequently less than friendly towards foreigners.

WORKING TOGETHER ON LOWERING COSTS

Axis Capital Chairman Michael Butt warmly welcomed Cox into the government leadership role. "Personally, I'm very pleased to see Ms. Cox as premier, and I wish her well," he said.

"She's been at the Ministry of Finance for many years and has been a constructive partner with international business, and we hope that will continue in the future. I'm confident that we will be able to work together to continue to build up Bermuda as a global financial center."

The Association of Bermuda Insurers and Reinsurers (ABIR), whose 23 member companies comprise the majority of the island's international commercial carriers, has also welcomed Cox into the hot seat.

ABIR President Bradley Kading, who has worked closely with Cox, particularly representing the Bermuda market's interests in dealings with Washington lawmakers, described her as "a fine public servant." He hopes to see international-relations efforts continue with politicians on both sides of the Atlantic.

With European domiciles having succeeded in luring some Bermuda insurers--the latest to announce plans to leave was Allied World Assurance Company last month--Kading urges Cox to review the domestic policies that could be encouraging companies to leave.

In this year's national budget, for example, Cox shocked businesses by raising the payroll tax rate by two percentage points to 16 percent to help tackle the government's debt, which is close to $1 billion.

"We believe some attention needs to be paid to the cost of doing business in Bermuda," Kading said. "ABIR members employ 1,800 people here. Higher costs in Bermuda can create an incentive for employees to be located elsewhere in North America and Europe.

"It's also important to encourage senior company officers to be located here, and various government policies affect the willingness of businesses to locate those employees here. We believe that is a discussion that needs to be continued in the coming year," he added.

In her speech at her swearing-in ceremony as the new premier, Cox announced plans to slash government spending by $150 million--or about 13 percent--which could raise hopes in the business community that no more tax increases are in the pipeline.

November 2, 2010

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