Iran Announces Missile Test After Nuclear Development
Iran says it has successfully tested a cruise missile, a day after announcing another missile test and a new development in its nuclear program.
State media reported the ground-to-sea cruise missile test Monday, the last day of Naval exercises. Iran says the war games also included test-firing a medium-range surface-to-air missile Sunday near the strategic Strait of Hormuz.
Iran also said Sunday it successfully tested and produced fuel rods for use in nuclear power plants.
Iranian television said the fuel rods, which contain natural uranium, were made in Iran and inserted into the core of a research nuclear reactor in Tehran.
Middle East analyst Stephen Zunes told VOA that the step does not present a major security threat, and that Iran still has a long way to go in developing a nuclear weapon.
Both the United States and the European Union contend that Iran is secretly trying to develop nuclear weapons. Iran says its nuclear intentions are peaceful.
State media also boasted that the missile tested Sunday was equipped with technology enabling it to pinpoint radar-evading targets.
Zunes said that type of missile is a defensive weapon that could be used against attacking planes, and that the test is a warning against preemptive strikes by other nations. But he says Iran's military progress does not necessarily mean it is more willing to carry out its own attack.
Iranian officials Sunday also dismissed Washington's move to impose new sanctions on financial institutions that deal with Iran's central bank. U.S. President Barack Obama signed the sanctions into law Saturday as part of a push to hamper Tehran's ability to finance its nuclear enrichment program.
Iran has threatened to respond to possible wider sanctions on its oil exports by closing the Strait of Hormuz, a vital export route for the other oil-producing countries of the Persian Gulf. The U.S. Navy's Fifth Fleet, based in Bahrain, says it will not allow disruptions to Gulf shipping.
Seoul Sees Opportunity for Better Ties with North Korea
South Korean President Lee Myung Bak says a new era in inter-Korean relations can be opened if North Korea shows sincerity.
In a nationally televised New Year's address Monday, Mr. Lee said there is a new opportunity on the Korean peninsula
as the young son of the late Kim Jong Il takes power as Supreme Commander of the North Korean military and ruling party leader after Mr. Kim's death last month.
But Mr. Lee also warned that South Korea will respond sternly to any provocation from the North.
On Friday, North Korea's powerful National Defense Commission said that there would be no policy changes under Kim Jong Un.
Tensions between the two Koreas have been high since Seoul accused Pyongyang of sinking a warship near the disputed sea border, known as the Northern Limit Line in March 2010. Forty-six South Korean sailors were killed in the attack.
Relations worsened after the North bombarded South Korea's Yeopyeong island in November 2010, killing four people.
Kelly Rowland wants to get a 'movie kiss' on New Year's Eve
The former Destiny's Child star is currently single, but says she would like to see 2012 in with a passionate embrace.
She said: "I don't know what I'm doing, but hopefully I'll just get a kiss! I want a good kiss where someone just takes your face in their hands, like in the movies. I want a movie kiss. Get in there, grab my ass - just let me know you mean it!"
Kelly - who was a judge on this year's UK X Factor - says her New Year's resolution is to star in two films.
She said: "Next year, I really want to do two movies. I did one this year in the States, so I'd like to do two next year."
The Down for Whatever singer loves spending the holiday season with her family, and especially enjoys the festive food.
She said: "I like everything over Christmas time. We eat, watch a movie, people fall asleep, they wake up, we eat again. I love that feeling of family."
Rihanna To Perform New Year's Eve Concert in Barbados
Bajan pop star Rihanna is set to perform a private concert in Barbados on New Year's Eve, where the audience will include Simon Cowell. This is AWESOME! The government of Barbados has invested a lot of money in Rihanna as an Ambassador and it seems to be paying off! The government reportedly paid Rihanna £1.25 million (YAOW! that's almost $2MM USD!!!) to perform at Barbados' Cropover Carnival in August. Not that I care about Simon Cowell, but I care about the attention it brings to Barbados which in turn means tourism dollars which in turn means a stimulated economy which means people working! Love dat!!!
Riri will headline the party for the UK's Global Radio boss Ashley Talbot at the luxurious Sandy Lane hotel, and the 52-year-old music mogul is expected to be in attendance.
Boyband The Wanted are also expected to perform. A source told British newspaper the Daily Star: "
"Everyone is very excited to hear that she'll be back again so soon and plenty of the islanders are hoping to catch a glimpse of her in town, even if they can't get into the party."
SOURCE: CEM
Bolt can break my 400m record - Johnson
American legend Michael Johnson believes that Usain Bolt is the man to break his 400m world record, an achievement he believes will cement the big Jamaican's status as an athletic legend.
Johnson, whose 43.18 remains the best-ever time in the one-lap event, endorses Bolt's 400m consideration, after the 100m and 200m world-record holder told journalists in Monaco several weeks ago that he wouldn't mind adding the 4x400m to his 100m, 200m and 4x100m Olympics 2012 schedule.
Bolt's coach Glen Mills has since poured cold water on his charge's intentions pointing out that his athlete would have to run the 400m and finish in one of the top spots at Jamaica's Olympic trials in June in order to qualify outrightly for the mile relay team. With no plans in place for Bolt to run the 400m at the trials, the decision to include Bolt would rest squarely with the Jamaica Athletics Administrative Association. To sum it up, it's highly unlikely that Bolt will be chasing four gold medals in London next summer.
Johnson - the first man to win the 200m - 400m double, himself warned Bolt about the dangers of such a pursuit not too long ago, however, he now seems to have a change of heart.
"He was a 400m runner before he was a 100m and 200m runner," he told ESPN. "He has always been great as a 200m runner but he was a good 400m runner when he was very young."
American Carl Lewis was the last man to win four gold medals at the Olympics, after his exploits at the 1984 Los Angeles Olympics.
under 43 seconds
"He has the build to be a great 400m runner and he certainly has the speed. Without a doubt, I think if he chose to make the switch at some point in his career and decided he was going to train for the 400m, I am certain he would break the world record and probably run under 43 seconds and become the first person to run 42 seconds," Johnson added.
"I've heard all types of rumours, whether he is going to run 400m or 4x400m relay, I think obviously he's the best sprinter in the world, he's the best there has ever been," Johnson added. "He is an incredible athlete and I think he will be focused and ready to go next year to defend his titles at 100m and 200m which he has said he wants to do and (Jamaica) have the best 4x100m relay in the world at this point.
"Beyond that anything else is just speculation and I think we will just have to wait to see if he decides to do anything else. But I think he is in a great position to repeat (2008), and I wouldn't put my money on anyone else but him for 100m and 200m," Johnson noted.
Djokovic cruises past Ferrer to win
Novak Djokovic showed he remains the player to beat in 2012, routing David Ferrer 6-2, 6-1 Saturday to win the World Tennis Championship exhibition tournament.
The top-ranked Djokovic also beat Gael Monfils and then routed Roger Federer en route to his first Abu Dhabi title.
"This is the best way to start the 2012 season," Djokovic said. "I must say I'm really happy with the way I'm playing. Playing against the top players in the world in this way gives me a lot of confidence."
Earlier, Rafael Nadal overcame an ailing shoulder to beat Federer 6-1, 7-5 for third place in the $250,000 winner-takes-all six-man tournament, a warmup for the ATP season.
The fifth-ranked Ferrer had upset second-ranked Nadal in the semis but had no answer for Djokovic, who broke the Spaniard five times and took 3-0 leads in both sets.
Djokovic is coming off a year in which he won three Grand Slam titles and had a 70-6 record. He says he is feeling better than he did at this stage last year and he is surprised by how well his preparations are going.
The 24-year-old Serb struggled toward the end of the 2011 season, with four of his six losses coming after the U.S. Open as fatigue and minor injuries caught up with him. He came to Abu Dhabi saying he was still not fully fit, but now feels ready to defend his title at the Australian Open next month.
"Usually at this stage, you are trying to find your speed on the court, agility, just dynamics of every stroke," Djokovic said. "But I found it already, to be honest, right away after the first match. ... It's a great way for me to prepare for Melbourne."
Ferrer conceded he was outmatched.
"He was better than me. He played a really good match," Ferrer said. "I tried but maybe I played at a deficit all the time. I fought, but with Djokovic at the moment it's difficult to beat him."
Nadal has had a sore left shoulder since the end of last season and looked out of sorts in his one-sided loss to Ferrer on Friday. But the 25-year-old Spaniard showed signs he is returning to old self against Federer. He took a 3-0 lead in the first set and was never seriously threatened by his Swiss rival, who lost to Djokovic in the semifinals in 44 minutes.
The third-ranked Federer struggled with unforced errors and an inconsistent serve. His game improved in the second set, but Nadal ended the match with a blistering forehand into the corner.
"It was a positive match," said Nadal, who plans to take a break after the Australian Open to rest his shoulder. "I played better than yesterday and that was the most important."
Federer downplayed the two losses this week, insisting he was feeling good and the time on court will serve him well ahead of the season's first tournament in Qatar next week.
"It's about getting ready and feeling fine out there and enjoying a great atmosphere here and having the chance to play world class players," Federer said. "Trying a few things, see where you are at and see where the other guys are at."
"Obviously, I could tell Novak and Rafa are playing really well," he added. "That is not a surprise to me. I expected them to be in good shape for next year and they proved that to me this weekend."
SI
Football Association report says Luis Suarez evidence 'unreliable'
Luis Suarez gave "unreliable" evidence to the body that was investigating claims he racially abused Patrice Evra, according to a report published by the Football Association.
Liverpool's Suarez was given an eight-match ban and a £40,000 fine after he clashed with Manchester United's Evra.
The report says Suarez has "damaged the image of English football around the world".
Two similar offences in future could lead to "a permanent suspension".
The incident happened during the 1-1 draw at Anfield on 15 October.
The report states that, after being tackled by the Uruguayan, Evra asked Suarez why he had kicked him, to which the forward replied in Spanish: "Because you are black."
When Evra challenged him to repeat the answer and said he would "punch him", Suarez said: "I don't speak to blacks."
Suarez is said to have used the term "negro" seven times in around two minutes.
In giving the reasons for the length of the ban, the report said: "Given the number of times that Mr Suarez used the word 'negro', his conduct is significantly more serious than a one-off use of a racially offensive term and amounts to an aggravating factor."
The FA and Liverpool were given the findings on Friday by the Independent Regulatory Commission. Both parties have the right to an appeal and must reply by 13 January.
The 115-page document details the conversation between the two players.
The report concludes: "Mr Evra was a credible witness. He gave his evidence in a calm, composed and clear way.
"It was, for the most part, consistent, although both he and Mr Suarez were understandably unable to remember every detail of the exchanges between them.
"Mr Suarez's evidence was unreliable in relation to matters of critical importance. It was, in part, inconsistent with the evidence, especially the video footage.
"For example, Mr Suarez said that he pinched Mr Evra's skin in an attempt to defuse the situation. He also said that his use of the word 'negro' to address Mr Evra was conciliatory and friendly. We rejected that evidence.
"To describe his own behaviour in that way was unsustainable and simply incredible given that the players were engaged in an acrimonious argument.
"That this was put forward by Mr Suarez was surprising and seriously undermined the reliability of his evidence on other matters.
"There were also inconsistencies between his accounts given at different times as to what happened."
Suarez was found guilty on the "balance of probability" - a lower standard than the criminal standard of "beyond all reasonable doubt".
According to the report, Evra admitted that he begun the exchange with Suarez by referring to the Uruguayan's sister in Spanish.
The report added: "After the referee Andre Marriner separated them, Mr Suarez said that he turned to Mr Evra and said, 'Por que, negro?'
"He [Suarez] said that he used the word 'negro' at this point in the way that he did when he was growing up in Uruguay, that is as a friendly form of address to people seen as black or brown-skinned or even just black-haired.
"He [Suarez] said that he used it in the same way that he did when he spoke to Glen Johnson, the Liverpool player.
"He [Suarez] said in no way was the use of the word 'negro' intended to be offensive or to be racially offensive. It was intended as an attempt at conciliation."
The entire conversation took place in Spanish and linguistic experts Professor Peter Wade and Dr James Scorer helped the panel with the meaning of the phrases.
The commission added: "In our judgment, Mr Suarez's use of the term [negro] was not intended as an attempt at conciliation or to establish rapport; neither was it meant in a conciliatory and friendly way."
In the report, Suarez claimed: "I would refer to Glen Johnson as 'negro' in the same way that I might refer to Dirk Kuyt as 'Blondie' - because he has blond hair, or Andy Carroll as 'Grandote' - 'Big Man' - because he is very tall.
"Where I come from it is normal to refer to people in this way by reference to what they look like. There is no aggression in referring to somebody in this way and there is certainly no racial connotation."
After the match Evra and United manager Sir Alex Ferguson both spoke to the referee about the incident, while Liverpool manager Kenny Dalglish remarked to referee Marriner in reference to Evra, "Hasn't he done this before?"
Despite the punishment, the commission conceded: "This case is not about whether Mr Suarez is in fact a racist. Indeed, the commission will no doubt conclude that there are some indications that he is not."
Suarez's defence was that he had been called "South American" in a derogatory way by Evra. But the commission added: "We found that Mr Evra did not use the words 'South American' when speaking to Mr Suarez."
Evra, Ryan Giggs, Kuyt, Liverpool's director of football Damien Comolli and Dalglish all gave evidence at the hearing.
After the initial ban was announced on 21 December, Liverpool's players wore T-shirts to support the Uruguayan while warming up for their match against Wigan. A day earlier the Anfield club released a statement saying they were "very surprised and disappointed with the decision of the Football Association commission to find Luis Suarez guilty of the charges against him".
Bynum returns, leads Lakers over Nuggets
Andrew Bynum provided the Los Angeles Lakers with a powerful performance in his season debut, following a four-game suspension that carried over from the playoffs.
It all would have been for naught, however, had it not been for some clutch shooting in the fourth quarter by Kobe Bryant and a couple of equally critical hustle plays by Derek Fisher and Pau Gasol in the final minutes.
Bynum scored 29 points on 13 for 18 shooting and grabbed 13 rebounds, leading the Lakers to a 92-89 victory over the Denver Nuggets on Saturday. The 7-foot center played 31 1/2 grueling minutes, helping the Lakers win their third straight following their first 0-2 start since 2002-03.
"They were looking for me a lot. I was a focal point early in the offense, so I knew the quicker I got down the court, the better it was," said Bynum, who made four of his first five shots and finished the first quarter with 10 points. "I was winded like crazy. I couldn't breathe in the first six minutes. Defensively, getting back and all those things require me to be in better condition. So it's going to take a little while."
Bynum was suspended without pay for the first four games because of a flagrant foul against Dallas' J.J. Barea in Game 4 of the Western Conference semifinals. The original ban was five games, but was reduced on Dec. 23 as a result of a shortened schedule caused by the lockout.
"I really didn't have the highest expectations," said the seven-year veteran, who totaled 41 points and 23 rebounds in two preseason games against the Clippers. "I just wanted to come out and be aggressive. I wanted to get it down low, and when I got it, I made shots."
Bryant, bogged down by foul trouble, had 17 points along with nine assists and 10 rebounds. The Lakers overcame 2-for-24 shooting from 3-point range.
Reserve forward Al Harrington had 21 points for the Nuggets, who have lost 25 of their last 29 road games against the Lakers.
"The game of basketball treats you badly sometimes," Denver coach George Karl said. "No one feels very good right now. They hurt us rebounding the ball and they hurt us with Bynum's power underneath the basket. They've very good at playing an aggressive style of disrupting you, with guys coming at you on pick-and-rolls."
The Lakers missed their first 12 shots from 3-point range - all in the first half - before Matt Barnes connected with 11:11 left in the third to put Los Angeles ahead 49-47. The Nuggets weren't much better from behind the arc, missing nine of their first 10 before finishing up 7 for 26.
Trailing 71-69 after three quarters, the Lakers tied it four times before Harrington's 3-pointer gave Denver an 85-80 lead with 5:29 to play. Bynum guided in a pass above the rim from Bryant and converted the ensuing free throw to narrow the gap to 89-87 with 3:23 left.
Fisher, who fouled out with six points in his 500th consecutive game, missed a 3-point shot trying to beat the 24-second clock - but hustled all the way to the other side of the court to fall on the loose ball and managed to get a timeout with 2:29 remaining and the Lakers still down by two.
"I haven't seen it on tape yet, and I'm sure it doesn't look very graceful. But I'm glad it helped us get a win," the 37-year-old Fisher said with a chuckle. "You see a ball free and you go for it, especially at that time of the game. To make hustle plays and do the little things, that's the team that we're becoming - a team that can figure out a way to grind out wins.
"Once I saw the ball bounce long (Ty) Lawson and I were kind of bumping into each other shoulder-to-shoulder and I started to lose my balance," Fisher explained. "So it was somewhat surprising that I was still able to figure out a way to find the basketball as I was stumbling and regain control before going out of bounds."
Bryant tied it 89-all with a pair of free throws, and Bynum blocked a layup by Nene with 2 minutes left before converting a layup at the other end for a 91-89 lead with 1:50 to go.
The Nuggets had a few opportunities to pull it out. But Gasol blocked a layup by Lawson, who missed two free throws the next time the Nuggets had possession. Danilo Gallinari had a chance to tie it, but blew an easy fast-break layup with Steve Blake on his heels after Bryant missed a jumper at the other end.
"We get three layups and a couple of free throws in the last three minutes, and we miss all of them," Karl lamented. "Our offensive confidence is a little short right now."
Fisher's consecutive-game streak is the longest among active NBA players. Former Lakers forward A.C. Green, a teammate of Fisher's during the 1999-00 season, holds the league record with 1,192 in a row.
`That's what's so amazing about what he was able to accomplish - especially as a big guy out there banging with the best of them," Fisher said. "For him to be able to have done what it took mentally, emotionally, spiritually and physically to be prepared to go to work every single day for all those seasons was a big-time example for me.
"It's not like I'm chasing any type of number, but I just try to bring the same mentality to work, whether it's 500 or 1,000. I'm nowhere close to his streak, but I still take great pride in coming to work every day. Those experiences with him were great. We talked a lot and I learned a lot from him."
Bryant, who averaged 27.8 points through the first four games despite playing with a torn ligament in his right wrist, missed his first three shots and played more than 14 scoreless minutes before ending the drought on a floater that put the Lakers ahead 38-36 with 3:40 left in the second quarter.
SI
Baptiste, Bravo toast of T&T
Sprinter Kelly-Ann Baptiste and West Indies batsman Darren Bravo were named the Trinidad & Tobago Sportswoman and Sportsman of the Year.
This followed the inaugural version of the rebranded Spirit of Sport Awards on Wednesday at the Hyatt Regency Hotel.
The 25-year-old Baptiste grabbed a bronze medal in the women's 100 metres at this year's World Championships in Daegu, South Korea, clocking 10.98 seconds to finish behind American winner Carmelita Jeter and Jamaica's Veronica Campbell-Brown.
She became the first female sprinter from the two-island republic to earn a medal at a global championship which also helped to earn her the Best Sport Performance award.
Baptiste was also part of the T&T 4x100m women's relay team which finished fourth at the World Championships, earning them the team performance-of-the-year award.
The 22-year-old Bravo was one of the most consistent batsmen for West Indies in the past year, earning the top men's performance award.
He gathered 949 runs at an average of 49.94 in 20 innings from 10 matches, scoring three hundreds and three half-centuries.
His 195 against Bangladesh at the Sher-e-Bangla Stadium last month was his maiden Test hundred and his highest score for the year, and he followed up with two hundreds in successive Tests against India on the road.
Bravo also scored 511 runs at 30.05 in 20 innings from 21 one-day internationals, and supported with 90 runs at an average of 30.00 from three innings in the same number of Twenty20 Internationals.
The other big winner of the night was West Indies Women's off-spinner Anisa Mohammed. She claimed awards for the Best Breakthrough Performance, Most Consistent Performer and Record-breaking Performance of the Year.
Her breakthrough and record-breaking performances came in the Women's ODI format of the game, when she captured seven wickets for 14 runs from 8.3 overs against Pakistan Women in Bangladesh to help West Indies Women win the ICC Women's World Cup qualifier.
This followed a home series three months earlier in which she grabbed two five-wicket hauls against the same opponents to help the Windies Women dominate.
Mohammed was the most successful bowler in Women's one-day international during the last year, claiming 37 scalps at an average of 7.05 which bore testimony to her consistent performances. She also grabbed 10 wickets at 12.30 apiece in seven T20Is this year.
Job losses dominate headlines in 2011
Many businesspeople were hoping that 2011 would be the year when the economy finally kicked into recovery mode. It didn’t work out that way.
For most, it was another year of trying to do more with less, a continuing fight for survival. Job losses continued to devastate families, while pay cuts and freezes and reduced hours were the price paid by many to keep their employment. Businesses will doubtless be hoping that 2011 was a year of bottoming out.
The economy
Late this year it was revealed that Bermuda’s gross domestic product (GDP) shrank for a second year in 2010. The 1.9 percent contraction, after inflation was taken into account, was much less severe than 2009’s 8.1 percent shrinkage, but nevertheless confirmed what most of us already knew that the Island had endured a second year of recession.
Whether or not the economy grew in 2011, for most people it didn’t feel like it.
The job losses continued unabated. In September, Citi Hedge Fund Services relocated 105 jobs from Bermuda to North America in the biggest publicly revealed jobs blow of the year. At the same time, the Willowbank hotel closed, costing some 46 jobs. More jobs were shed at Aircraft Services Bermuda (35), Butterfield Bank (25), Universal Electric (18), Citco (15), Allied World Assurance Company (15), Bermuda Press (14), Bacardi (13), CD&P (13) and Appleby (11). These were some of the double-digit and higher job losses reported by this newspaper, but many more posts were undoubtedly shed without being publicised.
Many of the jobs disappearing had been held by expatriates. As hundreds more departed the Island, the economy suffered from the absence of their rent payments and local spending, adding to the pain. In July, the then Economy Minister Kim Wilson revealed that the number of guest workers holding one- to five-year work permits had dropped by more than 1,500 in the space of four months through the end of March, representing a 15 percent drop.
The job losses continued even after Government knocked two percentage points off the rate of payroll tax from the start of April, reversing an increase implemented a year earlier, and returning the rate to 14 percent.
Retail sales continued to fall. October was the 42nd consecutive month that retail sales volume fell. With two months of figures still to come in, it appears that 2011 will be the fifth consecutive year of falling sales volume.
Struggling retailers were given a helping hand in October by Premier and Finance Minister Paula Cox, who announced relief from payroll tax for the sector, thought to employ around 4,000 people, for the next six months. At the same time she added ten percentage points to the rate of customs duty paid on goods purchased overseas and brought in through LF Wade International Airport by residents, raising the rate to 35 percent. This move, she said was aimed at helping the retail sector.
However, this sparked increased demand for couriers, who were able to ship in goods at a lower rate of duty than that paid at the airport. Retailers called for rates on shipped-in personal goods to be raised, producing a war of words in the media between the competing interests. With Government stating in its Pre-Budget Report in December that it is considering harmonising duty rates for personal imports, it appears that retailers may win the argument in the end.
Inflation remained modest, with the Consumer Price Index averaging around 2.5 percent for most of the year. However, in October the rate crept up to 2.9 percent, driven by higher healthcare costs and higher fuel costs, adding to hard-up residents’ bills.
Interest rates remained at record lows, but that did not prevent more people falling into arrears with their loans and mortgages. Data published by the Bermuda Monetary Authority showed that at June 30, 6.7 percent of local banks’ loan books were classed as “non-performing loans”, or more than 30 days in arrears, a steep, 24 percent rise from the first quarter.
Departures
Some well known characters announced their retirement from high-profile jobs during 2011.
HSBC Bermuda CEO Philip Butterfield announced he will be stepping down next May, to be replaced by the current deputy CEO Richard Moseley. Bermudian Mr Butterfield has been with the bank 12 years, eight of them as CEO.
Axis Capital Holdings CEO John Charman will also be stepping down next year, but will remain with the company he founded in the wake of the 9/11 attacks ten years ago in the role of chairman. His long-time colleague, Axis chairman Michael Butt, who in 2011 received an OBE for his services to the reinsurance industry, will step down in May to make way for Mr Charman and will remain on the board of directors. Albert Benchimol will become the new Axis CEO.
Ascendant Group announced that its CEO Vince Ingham was to retire at the end of 2011 after 25 years with the company and the electricity provider is still hunting for a replacement.
Meanwhile Sheila Lines will step down from the CEO role at telecommunications group KeyTech, to be replaced by Lloyd Fray. Insurer Argus Group Holdings Ltd also had a new CEO from the start of 2011, with Alison Hill succeeding the long-serving Gerald Simons.
Insurance
The Island’s biggest industry proved its worth to the world once again, as it paid out billions of dollars in catastrophe claims in what was one of the most expensive years on record for natural disasters. A horrendous earthquake and tsunami in Japan proved to be one of the costliest natural disasters in history, while earthquakes in New Zealand, floods in Australia, Thailand and Denmark, and tornadoes, wildfires and Hurricane Irene in the US, kept the claims rolling in. Swiss Re estimated that 2011 catastrophes cost insurers about $108 billion, second only to 2005 when Hurricane Katrina struck the US.
In a special report on the Island, rating agency AM Best predicted that the Bermuda market was on track to make a slight profit for the year as a whole, remarkable not only because of the huge claims, but also because investment income continued to be squeezed by record low interest rates.
PartnerRe alone was hit by catastrophe losses of more than $1.3 billion. Flagstone, Platinum and Omega were among those whose share prices took a particularly severe battering over their disaster losses.
Omega was also at the centre of a partial takeover saga involving former Flagstone chairman Mark Byrne, who tried to buy a quarter of the company in a deal which would have made him Omega’s executive chairman. The deal fell apart after Omega declared in its interim statement that catastrophe losses for the year had been $6 million more than previously estimated and Mr Byrne said he considered the original offer to have lapsed.
Mr Byrne made a second offer of 74p per share which was rejected by the Omega board.
The largest takeover saga was that involving US reinsurer Transatlantic Holdings. In June, Allied World announced it had agreed to merge with Transatlantic in a deal valued at $3.2 billion. In July, Validus, who in 2009 had acquired IPC in similar circumstances, came in with a rival bid valued at $3.4 billion. Allied World pulled out in September and Validus followed suit in November after months of claims and counter-claims and legal wrangling. In the end, it was Alleghany Corp that struck the deal.
Redomiciling activity that had been a feature of the previous three years slowed down, although Lancashire Holdings changed its tax base to the UK.
Insurance regulator the Bermuda Monetary Authority moved a big step nearer gaining the goal of “third-country equivalency” with the Solvency II rules for insurers, set to take effect in the European Union in 2013. Inspectors from Europe visited in May to run the rule over the Island’s insurance supervision.
In October, they released their findings that Bermuda’s regulation was broadly equivalent with the stringent new rules. In addition, the report hinted at the possibility of segmented equivalency, which would mean Bermuda’s captive insurers would be treated differently according to their lower risk profile. This is something Bermuda had lobbied for and the industry will breathe a huge sigh of relief if it can be realised, as it will mean Bermuda should not be put at a disadvantage to jurisdictions like Cayman, who have chosen not to pursue equivalency.
Telecommunications
The run-up to the long-awaited liberalisation of the telecommunications sector proved to be somewhat tempestuous in 2011.
CellularOne and M3 Wireless announced a merger deal in May that created the new company CellOne, which claimed to have a market share of just over half.
But the controversy started after Digicel’s acquisition’s of Internet service provider Transact from the Igility Group of Companies, announced in September. Weeks later, Digicel launched a long distance service through Transact, using Internet-based voice-over IP. This sparked a flurry of legal action from rivals who claimed Digicel was going beyond what its licence permitted, while Digicel’s position was that Transact was offering the service, as it was allowed to do.
Chief Justice Richard Ground eventually referred the case to the Telecommunications Commission and Digicel resumed marketing the long distance service in December.
Also in December, the House of Assembly passed the Regulatory Authority Bill and the Electronic Communications Bill, which will replace rules restricting what services telecoms players can offer with a “universal licence” that will allow companies to offer packages of different services. The legislation will also create a new independent regulator to oversee the industry.
Banking
Butterfield Bank had dominated the banking headlines in recent years, but a year of stabilisation in 2011 saw less news coming out of the venerable institution. Three successive quarters of modest profits suggested that it is back on an even keel. However, the bank did find itself in the news in the latter part of the year after it introduced a new online banking platform, which had some teething problems. Customers initially complained of lost payee lists and an absence of payee ID when transferring funds to third parties, among other problems.
Capital G Bank made progress with its amalgamation with First Bermuda Group and opened a new bank branch at the corner of Church Street and Par-la-Ville Road at FBG’s former headquarters.
Financial institutions faced increasingly strict reporting requirements on the holdings of their American customers as the US clamped down on tax evasion. HSBC Private Bank, including its Bermuda branch, caused a stir in July by announcing that it would no longer service US citizens living outside the US.
Bermuda Commercial Bank, awakened from four years of limbo in 2010 when it was bought out by Permanent Investments Ltd, enjoyed a rejuvenation in 2011 and recorded profits of $12.6 million for the 12 months through September. Even after a $10 million, one-off gain was stripped out, profits more than doubled from the year before.
The prospect of better times ahead for the Bermuda economy will depend heavily on a continuing economic recovery for the Island’s biggest trading partner, the United States.