A new government report reflects a Bermuda economy, struggling to shake off decades of tourism decline and the more recent global pandemic, saved only through the broadening growth of international business.

A read of the National Economic Report of Bermuda 2022 shows how a mature and deepening international insurance market, specifically, has hidden the softness of a country with stunted economic growth.

The economic report card, annually released with the Budget Statement, indicates that while the island, and the world, were first coming to grips with a once-in-a-century global pandemic from 2019 through the financial year 2020, the Bermuda insurance industry was growing sales by nearly $100 million and total assets by more than $223 million.

The IB sector, but insurance in particular, continued to grow its contribution to the economy in many ways.

There was growth in company numbers and employees. There was growth in the number of Bermudians and other ‘belongers’ on the payroll. And the payroll itself, continued to grow.

The sector’s employment income for the first three quarters of 2022 recorded a growth of $94.3 million or 8.9 per cent.

There have been large increases in life reinsurance business and the p&c reinsurers nearly doubled their net income from 2020 to 2021 from $7.1 billion to $13.9 billion.

These companies have trained, and in other cases, contributed to the training of Bermudians, as locals have poured into the industry – and not just directly.

Young Bermudians are also finding IB roles in law, accountancy and other professions as older locals have moved into more prominent industry roles.

The report concludes with a confident prediction that Bermuda’s economy will expand within a range of 2.5 to 3.5 per cent this year.

This, after Ministry of Finance officials estimated that Bermuda’s GDP may have grown by 3.4 to 3.9 per cent in 2022, driven by growth in the international business sector and the continuous recovery of the tourism industry.

The report said: “The international business sector and its interaction with the local economy has a significant positive effect on the balance of payments.

“The balance of payments continues to record relatively large current account surpluses, which are an important strength in the Bermuda economy.

“Bermuda’s total current account surplus over the first three quarters of 2022 was recorded at $926 million. This figure is 25.8 per cent greater than the $736 million recorded over the first three quarters of 2021.”

IB has certainly shown its muscle, growing by 230 new jobs (5.2 per cent) last year to 4,642 in total.

The other major employment increase was the return to the job of some hospitality workers, up 193 (6.3 per cent) when compared to 2021.

It was the first uptick in jobs since the start of the COVID-19 pandemic.

The report cites preliminary data from the 2022 Employment Survey that the total number of jobs in Bermuda only grew by 402 posts from 31,316 in 2021 to 31,718 in 2022 (1.3 per cent).

The government says its positive future outlook is contingent on continuing IB growth, tourism recovery and “the continued execution of the Economic Recovery Plan”.

The ERP is dependent on the work of the Bermuda Business Development Agency to build on the IB opportunities they have already been exploring.

And tourism growth will be driven by the Bermuda Tourism Authority and air carrier capacity improving from just short of pre-pandemic levels.

But “growth” is relative, especially in the absence of the significant Southampton Princess Resort.

By 1990, amid a long running period of tourism decline, Bermuda was still able to fill 430,000 air seats to the island.

The year 2022 brought less than 100,000 air leisure visitors, which was less than a half of the top year in recent times of 2018, when Bermuda could only convince less than 204,000 to fly here for a holiday.

Cruise ship numbers are increasing, but bring far less spending contributions to the community as a whole.

Other previously touted schemes, it is hoped, would help diversify the economy.

They include medical tourism, vertical farming and creating a scheme for a marketplace to benefit small and medium businesses. Also on the list are residential schemes, the plan for a casino industry, subsea communications and the space strategy.

They are just a part of the laundry list of previously announced items, thrown in at the bottom of the document as examples of how the government says it will strengthen the local economy through targeted investment strategies and diversification, prioritising the ERP initiatives.

The discussion on the gross domestic product for 2021 highlights how IB contributed the greatest amount to Bermuda’s economy.

It provided $1.78 billion in total output or 28.1 per cent of total GDP, an 8.4 per cent increase compared with 2020 and the tenth consecutive year that the value added by the International Business sector increased.

Businesses engaged in reinsurance, portfolio management services, and insurance brokerage services experienced the largest increases in value added.

The government report said that despite the heavy foreign inflationary pressures experienced in Bermuda, due to the Russia-Ukraine conflict and global supply chain disruptions, many of the major economic indicators showed positive growth.

International business figures, tourist arrivals and spend, retail sales, employment levels and the value of new construction projects, among others, showed an uptick compared to 2021.

The report concludes: “The local economy is however vulnerable to several external risks which could dampen Bermuda’s expected growth in 2023.

“Inflationary pressures, though declining, remain elevated and the International Monetary Fund expects inflation to persist, before declining to its norm in 2024.

“The lingering conflict between Russia and Ukraine has resulted in geopolitical tensions in Europe that could lead to reduced oil supply and elevated oil prices.

“Higher prices coupled with higher interest rates have the potential to weaken personal consumption. These factors can contribute to a global slowdown in demand with an increased risk of a recession.

“The continued collaboration between the government and private sector will remain critical in 2023 to navigate the challenges ahead and drive sustainable growth within Bermuda’s economy.”