by Stacee Smith
International business has long been the main pillar of Bermuda’s economy. But what is best pathway to take for those aiming to work in the sector?

Many believe that a grounding in accounting can lay the foundation for a C-suite career. Roland “Andy” Burrows, chief executive officer of the Bermuda Business Development Agency, and Laura Taylor, president and chief financial officer of Nephila Capital, explain why.

At the BDA Mr Burrows supports the social development and economic growth of Bermuda by working to create direct investment into the island. He enjoys this role, which also allows him to work with a committed team of executives who cover all pillars of the economy, and interact with both local and international investors and business executives.

Mr Burrows previously served as chief investment officer at the Bermuda Tourism Authority for four years, for ten years before that he worked in senior roles at HSBC, including head of Commercial Banking and chief credit officer. He attributes much of his success to the foundation he received as a result of his bachelor’s degree in accounting at Georgia State University.

“While I never qualified as an accountant, my accounting degree was a solid base for my career as a banker and an investment professional,” Mr Burrows said. “The ability to understand, review and analyse projects, business plans and investment proposals was made easier due to my degree.

“Being able to analyse the pros and cons of strategic plans, especially the costs and benefits,” was a valuable asset, he said. “Every decision has financial consequences and being able to understand the consequences upfront is critical to success. C-suiters are making decisions every day that are based on financial capabilities, so being financially astute is a must.”

Mr Burrows believes “accounting is a solid base for any career as it touches almost all disciplines. I would encourage anyone to consider accounting as it will be useful in both your personal and professional life.”

Reflecting on her career, Ms Taylor, who runs the portfolio management group at Nephila Capital, said: “What motivates me is doing things that not only have I not done before, but things that I haven’t seen done before – whether it’s inefficiencies in the market or internal inefficiencies.”

She joined the company 15 years ago as chief operations officer, and went on to develop Nephila’s compliance programme and insurance strategy, followed by a period running their technology group.

Upon receiving a bachelor’s degree in international business from the University of Victoria and obtaining the Canadian Chartered Accountant and US Certified Public Accountant designations, Ms Talyor spent four years working with KPMG’s Alternative Investments and Banking group, while also obtaining her Certified Financial Analyst qualification.

Both her background in accounting and auditing have assisted her greatly throughout her career. “With audit you get exposure to a variety of different businesses and see how they operate, and even at a very junior level you have the opportunity to speak with people at all levels of the organisation. At a very young age I was able to sit in the room of the CEO, CFO or other C-suite officers, and learn about their business strategy.”

Ms Taylor added: “If you can read financial statements and understand financial statement notes, it gives you great insight into the workings of a company.”

For those interested in following a similar career path Ms Taylor said: “I didn’t focus on achieving certain titles or climbing a ladder of any kind, I just focused on: ‘Where could I learn the most? Where could I help the company grow the most? And where could I add the most value?’ So I think if you focus on that you’ll be successful in whatever career you pick.”

She added: “Follow your intuition, go with your gut. If you’re looking outside yourself for too much guidance you can end up misaligned with your greatest interests and talents.”

This article was originally featured in the TOP TEN 2019 edition of the RG Business Magazine.

The post Pathway to IB career success appeared first on RG Magazines.

By Jamillah Lodge and Colina Outerbridge

Have you heard the saying, if it doesn’t make money it doesn’t make sense?  I don’t know who said it, but when it comes to business, no statement could be truer.  Most people who start businesses do so with the plan to make money.

How do you know if your business is profitable?  The average person will say it’s because they have sales and focus on the amount of revenue that is being made from the sale of their products and services.  But what are the costs associated with making the sales or costs of goods sold a.k.a. COGS?

The COGS is an accounting term that helps a business owner to determine their costs of delivering a product or service and consequently what they should be charging their customer for the product or service to ensure that they are making a profit.

When you talk about COGS, you are referring to small business accounting.  For most entrepreneurs, the idea of accounting is a daunting task, and some entrepreneurs that we work with at the Bermuda Economic Development Corporation (BEDC) avoid it like the plague.  But without proper accounting procedures how can you be sure that you are running a profitable business.

There are some fundamental accounting terms and statements that business owners need to understand.

Cost of Goods Sold are the direct cost attributable to the production of goods and services sold by the company, i.e. direct material, direct labour or purchase price of the merchandise.

Accounts Receivables is money which is owed to a company by a customer for products and services provided on credit. This is often treated as a current asset on a balance sheet.

An Income Statement is a report that shows the flow of revenues and expenses over a given period, typically a month, quarter or a year. It highlights management’s performance as reflected in the profitability of a business. It not only itemises the revenues and expenses of the past that led to the current profit or loss, but it also indicates what may be done to improve the results.

A Balance Sheet is a status report that shows information about the company’s resources at one given time. It is a financial statement that summarises a company’s assets, liabilities and shareholders’ equity. These three balance sheet segments give investors an idea as to what the company owns and owes as well as the amount invested by shareholders.

A Cash Flow Statement as the name suggests, is a flow statement that details the movement of cash through the company over a specified period. And a Cash Flow Forecast is a financial instrument used to plan how much money a company expects to receive and spend over a particular period.

Understanding these basic accounting principles can be the difference between success and failure.   BEDC can assist entrepreneurs to learn the basics with our Financial Planning courses Part 1 and Part 2 which focuses on the utilisation of QuickBooks software to manage accounts.  Once you understand the basics, we encourage business owners to hire an accountant or bookkeeper to assist with maintaining their accounts. While the cost of hiring certified accountants or Audit firms can be expensive, there are entrepreneurs who provide accounting services at better rates.  BEDC has a list of Financial Service Providers that can help you to select the best fit for your business. You can log on to the small business toolbox on our website at www.bedc.bm to access the list and other helpful information.

Accountants can assist entrepreneurs with business planning and growth projections. Accountants use the numbers to forecast growth by analysing historical data and sales to help entrepreneurs manage revenue, spending and investment.  Most financial institutions, investors and business partners will require financial statements to be able to access the health of a business. By having a grasp of the numbers early on in your business, you position yourself for the best chance at success.  In the end, it will ensure that you make money because if it doesn’t make money, it doesn’t make sense.

Source www.bedc.bm

The post If it Doesn’t Make Money, It Doesn’t Make Sense appeared first on RG Magazines.

by Bill Miller and Kyle Vrieze

The ultimate financial impact of the natural catastrophe events of 2017, most notably Hurricane Irma, is proving to be very difficult to estimate; both for the major modeling firms in the immediate aftermath of the events, as well as for the insurers adjusting claims in the weeks and months following. The accumulated industry loss report for Irma through Property Claim Services, or PCS, initially dropped from the first to the second report, and then steadily rose in each successive report.

There were a number of complicating factors related to Irma. Claims adjusters were already busy with Hurricane Harvey losses when Irma struck. The insurance claims environment in Florida was complex before Irma, and the storms’ impact has brought that complexity more sharply into focus; much to the consternation of insurers, reinsurers, insurance-linked securities (ILS) fund managers, and investors who have seen the value of the capital they’ve committed to the risk dwindle with each upward revision in the losses.

The Value of Independence

The evolution of the impact of the 2017 events has caused some investors to become concerned.  Significant late adjustments to storm liabilities can undermine investor confidence, which is so critical for ILS fund managers and reinsurers to maintain.

This is why reinsurers and ILS fund managers can benefit from an independent partner in the liability estimation process. Property cat reinsurers typically commission independent actuarial reserve reviews. One of the key values they realize through this service is the independent third-party view and the industry expertise they can access through their partner firm. Some ILS funds engage independent experts for that same reason.

ILS fund managers can maintain and strengthen investor confidence by making an investment in a more robust event loss-estimation process using an independent partner. Audit firms, also, may find greater comfort in having a third-party expert provide a second independent view of these loss estimates. Over time, fund managers can differentiate themselves by their increasing speed and accuracy in the estimation process.

Ultimately, Investors Will Decide

Along with investing in the event loss-estimation process as a strategic opportunity, funds must respond to the changing regulatory landscape to maintain investor confidence. The industry must manage an overlap of fund regulation with insurance regulation, which requires a unique combination of fund expertise with reinsurance expertise. Regulators may implement enhanced reporting requirements, responding to both lessons learned and market growth over the past few years.

Attracting more capital will see ILS managers focus on effectively deploying it on behalf of their investors. As this asset class matures, with difficult-to-value events, investors will likely demand more independence in the valuation process. Time will certainly tell.

Bill Miller is a Managing Director and leads the Actuarial and Financial Risk team, and Kyle Vrieze is a Director and P&C Actuary at KPMG in Bermuda.

This article was originally published in the February 2019 edition of the RG Business Magazine.

The post Variance and Governance appeared first on RG Magazines.