December 12, 2001

Dear Sir,

I feel compelled to respond to Mr. Duperreault's comments regarding the injection of $9 billion to $10 billion of new insurance capital to the Bermuda market. Mr. Duperreault assessed the impact on the Island's economy in his speech at the annual general meeting of the Bermuda Employers Council. I found his assessment to be misleading and incomplete.

Mr. Duperreault suggested that there will be lots of opportunities for hotels, as long as they can satisfy demanding, well-travelled, sophisticated and busy visitors, who expect five-star treatment in first class business hotels, and who want value for money.

I find this to be misleading, as what Mr. Duperreault appears to be asking is for Bermuda's hotels to provide vastly improved service at reduced prices. Anyone with knowledge of the hotel industry knows, that given Bermuda's high labour costs, this is not possible, especially for visitors who only stay one or two nights. Additionally most of Bermuda's hotels will be unacceptable to the travellers he refers to, due to location, as with their busy schedules they will be unwilling to tolerate the one hour commute to Hamilton.

I also find the assessment incomplete, as it totally ignores the impact on Bermuda's twin Achilles heels; overcrowding (overstretched infrastructure) and high housing costs. Mr. Duperreault acknowledges the need to bring executive management and senior underwriters to the Island, but ignores the fact that virtually all staff will need to be imported. All Bermudians who wish to work for exempted companies and have the required ability, already do so; witness the Island's over-employment and large number of foreign support staff already employed by exempt companies.

The infusion of several hundred extra staff that these new companies will employ, together with their families, will in my view be a disaster for Bermuda and Bermudians. Mr. Duperreault states that the new opportunities can benefit every resident of Bermuda. In my opinion the new opportunities for most Bermuda residents will be:

a. The opportunity to pay even more rent.

b. The opportunity to commute two hours to work, instead of the current one hour.

c. The opportunity to have to fight even harder to get a decent education for our children.

d. The opportunity to endure even longer waits for health care.

e. The opportunity to suffer the loss of what remains of Bermuda's culture.

In reality, the increase in housing costs coupled with the recession we are apparently about to suffer, will result in significant homelessness for many working class Bermudians. The only benefactors will be Mr. Duperreault, his shareholders and their colleagues in the insurance industry !

NOT FOOLED

Warwick