Regulation has driven entrepreneurship to near extinction: Saacke

Extra regulatory compliance, including Solvency II, has burdened the industry and increased costs – to the point it has driven entrepreneurship to near extinction, Gunther Saacke, the chief executive officer of Qatar Re, told Intelligent Insurer.

Saacke said: “It’s almost impossible to be a small entrepreneurial team at a small Lloyd’s Syndicate now. There’s so much more needed in order to exist as a syndicate today. The same is true for start-ups.

“The regulatory burden, which could be described as overkill, has driven entrepreneurship into near enough extinction. One lesson for the regulators to think about is what it takes to start a business in an industry that is suffering from an overreaction on what has gone wrong on the banking side, but certainly not on the insurance side.”

On the current market conditions, he explained that due to the cyclical nature of the reinsurance industry, there are recurring themes in the market. One of these is the emergence of multi-year contracts, where clients feel they want to lock in terms.