Bermuda could increase its advantage over other offshore domiciles by reducing the cost of high technology equipment and services used by the international business sector.

It was one of the few areas in which Bermuda could make a significant improvement to its working environment for exempted companies, said Mr. David Brown, senior vice president and chief accounting officer with financial reinsurer Centre Re.

In an address to Hamilton Rotary Club, Mr. Brown said Bermuda had many qualities which put it ahead of its offshore insurance competitors, such as political stability, sophisticated infrastructure, "intelligent'' regulations and good communications.

But the high costs of doing business on the Island, although difficult to bring down, needed to be addressed wherever possible, he said.

Telecommunications costs between Bermuda and Centre Re's other offices were up to three times greater than costs in those other locations, said Mr. Brown.

"The long term development of many businesses lies in technology,'' he said.

"In fact, Centre Re wouldn't exist without the computer spreadsheets we use to analyse potential contracts.

"The new catastrophe companies will need sophisticated computer systems to track aggregate exposures. Increasingly, international telephone, computer and video links are becoming indistinguishable.

"All of this means that Bermuda, as an international business centre will be increasingly involved in these technologies.

"Perhaps now is the time for Bermuda to consider ways to lower the effective cost of these goods and services to provide a strategic advantage over domiciles which are still far less sophisticated.'' The relationship between Bermuda and its international companies must be "mutually beneficial'' for it to survive, said Mr. Brown.

In return for Bermuda offering an almost ideal place to conduct exempted company business, companies offered the Island many financial benefits, he added.

Mr. Brown estimated that Centre Re contributed "at least $6 million'' annually to Bermuda's economy on salaries, rents, legal, banking and audit services, restaurants, computers, travel agents and Government fees.

In addition to creating employment and enhancing the Island's image as a business centre merely by forming here, international companies also provided "hidden benefits'', he said.

These included a boost to tourism through business visitors, generous donations to local charities and heavy spending on local airlines.

"It is common wisdom these days that business travellers are the lifeblood of airlines,'' he said.

Without the base of full fare-paying business passengers, Bermuda would have even fewer winter flights than currently operate, he said.

MR. DAVID BROWN -- `Bermuda needs to address the high cost of doing business.

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