Bermuda:Re
BermudaReinsurance . November 2006
Editorial
Bermuda Reinsurance is published quarterly
Identifying the determinants of economic growth has always
by Newton Media Limited.
Newton Lodge
15-17 Newton Way been the Holy Grail of economic theory. Adam Smith thought
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the factors determining per capita income highly influential.
Editor: Roger Crombie, FCA
Email: editorial@newtonmedia.co.uk
Others have argued that income distribution is more important,
Sub-editor: Susan Gault
Publishers: John Eddington
because of its effect on long-term growth.
Nicholas Lipinski
Advertising: John Eddington
Telephone: +44 1476 861 737
Email: john@newtonmedia.co.uk
Advertising: Nicholas Lipinski
Telephone: +44 2083 133 967 Roger Crombie, FCA—Editor
Email: nlipinski@newtonmedia.co.uk
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One of the most influential modern economic together after work. They compete with each other
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Telephone: +1 416 533 7171
theorists, Nobel Prize winner Robert Lucas, in a genteel manner, as befits reinsurance, the
Fax: +1 416 535 7526 has concluded that the primary determinant of ultimate club. Entry fee: a billion dollars.
E-mail: info@stranoandpettigrew.com
economic growth is the multiplier effects that stem
The larger this club grows, the more influence it
www.stranoandpettigrew.com
from talent clustering. Lucas is the leader of the
will gain, and the more efficient its accumulated
Printed by Pensord, UK
New Classical school; he introduced the concept of
knowledge will become. Those with momentum
©Newton Media Limited 2006.
‘rational expectations’ in the 1970s and supported
outstrip those lacking it; Bermuda’s momentum is
All rights reserved. the idea of supply-determined equilibrium.
relentless, like nowhere else in the re/insurance
No part of this publication may be reproduced,
Lucas argues that where communities of talent world.
stored in a retrieval system, or transmitted in any
cluster, growth follows. Silicon Valley is a good
form or by any means, electrical, mechanical,
You don’t need to be a Nobel laureate to
photocopying, recording or otherwise, without the
example, as are the film industry in Los Angeles
understand that this is a golden age for Bermuda
prior written permission of the publisher. and the financial markets of London and New re/insurance and, if only more people who live
The views expressed in Bermuda Reinsurance are
York. One of the most extraordinary proofs of his
here could see it, Bermuda too. Nothing can be
not necessarily those shared by the publisher, theory is, of course, Bermuda.
taken for granted, however. Lucas’s theory, in the
Newton Media Limited. Wishing to reflect the true
For those who do not spend time in Hamilton, long term, would never allow any community to
nature of Bermuda, the editor has included articles
the intensity of the local market is hard to imagine. grow that is not already growing. Fifty years ago,
from a number of sources, and the views expressed
are those of the individual contributors. No
What Lloyd’s has in a single building, Bermuda Bermuda was not growing. Fifty years from now?
responsibility or liability is accepted by Newton has, spread out, in a single city of 177 acres. Anybody’s guess.
Media Limited for any loss, legal or physical, as a
Re/insurers have certainly clustered in Hamilton. Bermuda is presently deciding whether people
result of any statement, fact or figure contained
With almost four dozen Class 4 companies and can have too much of a good thing. Economic
in Bermuda Reinsurance. This publication is not a
substitute for advice on a specific transaction. The
1,200 smaller companies come 2,500 insurance theory, after all, is just theory. Bermuda could
publication of advertisements does not represent
industry specialists. They eat lunch in Hamilton’s grow forever, in theory. In practice, allowing for
endorsement by the publisher. restaurants and walk on Hamilton’s streets. They the all-too-real effects of circumstance, emotion
Bermuda Reinsurance - ISSN 1749-4508 hold and attend conferences together. They drink and incompetence, who knows?
BermudaReinsurance . November 2006 3
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