The announcement today that ACE intends to re-domesticate from the Cayman Islands to Switzerland, is a reputational win for Switzerland, a big loss for the Caymans, and (hopefully) a wake up call for Bermuda; we have become very complacent and arrogant when it comes to our financial services industry of late.
While the business reasons behind the move will become clear shortly, this event should demonstrate definitively to us all that with a proxy vote and a few legal documents, massive multi-national corporations can just up and move.
Those big buildings on Pitts Bay Rd? Rounding error on one quarter's earnings.
And when they leave, they take with them some of the prestige they loaned their former home, and that's much harder to earn than lose.
I also think this sentence is interesting for what it doesn't say:
ACE Limited will continue to maintain executive offices in Bermuda, and ACE Group Holdings will continue to maintain executive offices in New York.
What didn't it say? It didn't refer to Bermuda as its corporate headquarters.
ACE and XL have largely defined Bermuda as a business destination for some time. And while it might be a surprise to many that both were founded as Cayman Islands domiciled companies, I think it's safe to say they are seen - both here and abroad - and have functioned, as Bermuda companies, our flagship companies.
The language in that press release suggests that Bermuda is just another operating location for ACE now.
In the early 80s we thought that tourists were so fortunate to visit Bermuda that we could charge them a 15% gratuity for poor service. We all know what happened since then.
Why should the financial services be any different?
Will our complacent politicians take notice?
