May 2015 CATEX Reports

Reports

Issue 46

May 2015

In this Issue

What does the fight about PartnerRe mean?

Why Axis is insisting it's a better fit

John Charman weighs in on the proposed merger

The "End of Reinsurance"?

Berkshire AGM and Loeb riposte to Buffett

Roger hopes the CAT models are better than the polling models

Quick Links

Contact

Princeton: 609 683 0888

Stephanie.Fucetola@catex.com

London: +44 (0)20-7816-2691

Martin.Robinson@catex.com

Dear Colleague,

We are trying a new format for this version --it is designed for easy reading on mobile phones and other portable devices.

We are of course retaining the links embedded in the stories but are going to keep photos out of this version. When we added the photos the reduced horizontal capacity ended up with the vertical scroll going on and on and on. Your opinions are indeed welcome.

Let's get started then.

The past several years have seen many articles and quotes about how reinsurance is no longer profitable and that premiums are at or near their so called "technical levels".

Yet everywhere you look more and more money is coming into the sector. Most of it is coming in as Insurance Linked Securities but a fair amount of the new money is also backing new reinsurance companies that have hedge funds managing their investment portfolios.

This month's stories are no exception. Warren Buffett lamented the popularity of reinsurance investments at his annual general meeting in Omaha and said that reinsurance is "a business whose prospects have turned for the worse."

Yet more and more money continues to come into the sector. Don't those investors read the same articles we do? If people such as Warren Buffett are saying that the business is bad why is there supposedly a long line of new investors?

The IRS is asking the same question apparently and has issued new rules for comments as it seeks to qualify the differences between just who and what is a reinsurer and what might be a hedge fund seeking a lower tax rate.

We're beginning to ask a slightly different question. Of course we've seen the onslaught of new investment in reinsurance but we've also noticed the recent consolidation of already pretty good sized markets as they merge to become giants.

We know that the popular theory is that stand-alone reinsurers don't have much of a future but we're happy to see John Eikann argue strongly against that idea.

We don't see what's so bad about being a stand alone reinsurer if you don't compromise your underwriting and price down just to intake premium.

There may well come a day when those so called "pure-play" reinsurers will be back in fashion. Maybe the large M&A-created risk bearers will want to cede risks all the way off their balance sheets.

Our regular Roger Crombie column is here too. Roger comments on the failures of the pollsters to forecast the UK general election results and wonders, if by extrapolation, the science of polling models has any correlation with the science of CAT modelling. We hope not.

Of course we are beginning with the industry fallout over the PartnerRe-Axis-Exor affair.

As always if you have any questions or comments about the newsletter or CATEX and its product suite please contact me.

Thank you very much.

Sincerely,

Stephanie A. Fucetola

Senior Vice President/CATEX

Is the Page Turning

Sometimes things happen that when you look back you can see them as epochal events that marked the end of an era or the start of a new one.

There are some obvious ones that come to mind. The Sarajevo assassination of the heir to the Hapsburg throne in 1914 is said to have marked the end of centuries of control by European royal families. The assassination of John Kennedy in Dallas in 1963 is said to have marked the beginning of the social upheavals in the US for the next decade.

It's not only assassinations that are epochal events. In 1965, to the horror of the audience, Bob Dylan's "roadies" rolled out mountains of amplifiers and sound equipment to the stage at the Newport Jazz Festival. Then Dylan walked out onto the stage with an electric guitar and played a rock & roll set. He was roundly booed and jeered for having "sold out" folk music to rock and roll but after that nothing was the same in music.

Curiously it is rare that someone present during these events recognizes it for what it is -something that will ripple forward across generations. We may be seeing something like that right now in the reinsurance industry.

Consider the basics -this is a well-worn road so feel free to skip ahead -there is more capacity now in the market than ever before and premium prices continue to tumble. Even those who feel the market may be finally bottoming out are still gloomy enough to think that rate decreases NOT reaching 10% will indicate that an end to the free fall may be near.

Warren Buffett who has made more money in this business than just about anyone is lamenting the fact that reinsurance has now become a "fashionable asset class" and the line of deep-pocketed investors lined up around the block still waiting to come in means that reinsurance returns will never be the same.

Warnings, some apocalyptic in nature, that medium and small reinsurers had better merge with other risk bearers or face extinction are commonplace. Merger activity would have one's head spinning with announcements coming seemingly every month.

One such announcement came in January and when it came it barely raised an eyebrow. PartnerRe announced that it had been examining the future of reinsurance and decided because of the nature of the market that it would be helpful to have a global insurance presence too.

You've heard the logic before -only a large multi-line, multi-national (re)insurer can provide a client the full service today's clients need and have the risk distribution to provide a full line of coverage for that client at competitive pricing etc., etc., etc.

PartnerRe looked around and, depending on what version you believe, decided that Axis Capital was the right fit for it. Axis is a large global insurer with a well-developed insurance operation. PartnerRe figured that the time and expense and uncertainty involved in building and growing a similarly sized and operated business was prohibitive. Buying, or should we say "merging" with "equals" seemed to be the better course.

The Axis CEO, Albert Benchimol had spent the three years prior to his tenure at Axis with PartnerRe and was well known to them and Benchimol knew the PartnerRe executives.

There was the little matter of Costas Miranthis, who was the PartnerRe CEO, which had to be addressed. After discussions with Axis it was decided that Benchimol would become CEO of the newly merged company (although Partner shareholders would own 51% of it) so Miranthis moved on immediately -with a severance reported to be about $17 million.

Of course Benchimol couldn't take over yet because there was the little matter that the newly formed company had yet to be approved by both boards and the PartnerRe shareholders. Named as the new interim PartnerRe CEO was David Zwiener an outside member of the PartnerRe board. Perhaps as a logical incentive, Zwiener is to receive a $3.5 million cash bonus upon completion of the Axis deal.

It did seem a little odd -after all Miranthis resigned immediately before the deal was announced. The CEO of the smaller (not by that much but smaller just the same) was to be the CEO of the new entity and the interim CEO of Partner had a lot of money on the table as an incentive to get the merger done.

Technically it was an acquisition by PartnerRe of Axis but some observers think it is clear that the deal is an acquisition in all but name, with PartnerRe's board and management surrendering control of the company to Axis CEO Albert Benchimol.

Some were puzzled that Axis would be picking up more reinsurance exposure --a lot of it --in a time when the cyclical and structural pressures on the industry could not be any more stark.

But, as we said, at the most only eyebrows were raised. Maybe it was a good deal for PartnerRe. The new entity would be a behemoth with combined gross premiums in excess of $10bn and a top-five ranking among global reinsurers. Plus Benchimol's knowledge of PartnerRe would help quickly identify the $200 million in cost savings the deal was expected to yield.

And, most important, conventional wisdom had it that "pure" reinsurers were a thing of the past and didn't stand much a chance in the risk integrated world of the 21st century. After all, clients were interested in being nurtured by their (re)insurer from the cradle to grave of the risk cycle.

Well someone didn't get that memo. That someone in this case is John Eikann the heir to the Italian Fiat Agnelli fortune who is the CEO of Exor Ltd., the Agnelli family investment vehicle.

In fact just about everything that John Eikann has said and done in his takeover effort of PartnerRe flies in the face of the so-called conventional wisdom about the future prospects of the reinsurance industry we've been hearing lately.

We hate to do this but it may be a useful exercise. Just exactly from whom have we really been hearing this so called conventional wisdom?

Is it from the people already running very large insurance and reinsurance operations with global reach and diverse lines of business? Are they who are saying that only companies of their status stand the best chance to succeed?

Nobody running one of those big companies has failed to point out these exact attributes (that their own companies possess) as reasons why their company is well positioned for the future. Point taken. Signal sent. Message received by the broker community and cedent buyers. Over and out. (We're strong enough and big enough to handle all your needs.) We get it.

Who else has been talking about how important it is to become a very large insurance and reinsurance operation with global reach and a diverse coverage offering of many lines of business?

Two groups quickly come to mind. First there are those who in the hunt, who hope to become just such an entity, and who are signaling to potential acquisition targets or aquirors, shareholders and possibly even their own Board members that consolidation brings the benefits of the "bigger is better strategy".

Then there are of those who have been acquired or who have been merged already into parts of a larger whole.

Hefty shareholder payments and executive golden parachutes aside, the public post acquisition statements from those who've run well established franchises for years always seem a bit rehearsed to us.

We strain to find any sign of discord or unhappiness at the fact that they've been swallowed up and are no longer in control of their own fate but rarely do. The line is always toed -at least until the employment contracts terminate or the individually owned share sale lock-in periods expire.

Sometimes it's interesting to see who is not commenting on events. Silence can tell you just as much as words in some cases. This may be one of those times. We could give you a list of pure-play reinsurers and risk bearers with heavy reinsurance footprints but you wouldn't be seeing any quotes from them lately. Eikann may be speaking for more of them than he knows.

Since this is in the public domain we can mention it. It is reported that Dinos Iordanou and Arch have made several "friendly approaches" to Axis Capital dating back to 2012.

Apparently, according to reports, when John Charman was the Axis CEO he rebuffed Arch's interest. Insurance Insider reports that the Axis proxy statement filed in connection with the PartnerRe bid showed that again in June 2014 Axis rebuffed an "informal oral communication regarding a potential transaction".

How informal? Well, as a publicly traded company prudence always wins so the proxy continued saying "After consideration of all relevant factors by the Axis board of directors and the senior management, the Axis board of directors determined that it would be preferable for Axis to continue to pursue its strategy as an independent company."

If the "informal oral communication" did come from Arch this time it was Albert Benchimol who said no.

The real question is, should the PartnerRe board recommend that the Exor bid be accepted, what will happen to Axis? Axis will receive the $300 million break-up fee from Partner should the Exor bid win but would Axis themselves then be a takeover target?

Back to Iordanou and his supposed interest in Axis. Writing on May 18th about that "interest" Charlie Thomas of Insurance Insider asks "Is now the right time to significantly increase one's specialty insurance and reinsurance presence. But maybe the canny Iordanou --like the Agnelli's -- feel the doom mongering around the international (re)insurance market is a little overdone."

Has anyone seen Bob Dylan's guitar lately?

Pure-play Reinsurers back in vogue?

Just as we were finishing this newsletter word arrived that the PartnerRe board rejected the Exor bid but agreed to engage in talks with the Agnelli-backed firm.

The PartnerRe board said that it still supported the Axis merger and that the Exor bid was not high enough to secure the board's approval.

For the first time however the PartnerRe board provided details as to why they don't support the Exor bid. Their reasoning is illuminating as it's clear, that while they have taken on board the share valuation concerns of shareholders, the board thinks that much more value will accrue to shareholders if the Axis deal proceeds.

And, to dispel the "bird in the hand is worth two in the bush" idea, advanced by certain shareholders, that getting their money now is better than waiting to see if the newly merged company actually does lead to increased share value, PartnerRe points out just how uncertain (in their view) the Exor bid is. There is no guarantee that any bird may actually be "in the hand".

We're getting this from the Insurance Insider and you can read the details here.

If you read the PartnerRe concerns about the Exor bid you can begin to understand a bit more clearly as to why they have apparently dug their heels in and favored the Axis bid despite pressure from large shareholders to accept the Exor bid.

Aside from some "housekeeping" issues, although not trivial, such as noting that there is no deal break-up fee if Exor walks away before the deal is done and that as of yet Exor has not ensured that the Exor subsidiary that will actually acquire PartnerRe is fully funded, the Board's concerns still boil down to a belief that by selling their shares now once and for all to Exor demands a far higher premium than what the Agnellis have offered.

The PartnerRe board is fortunate to have the Axis proposal in place or the sound of trampling feet (of shareholders headed toward them) would be heard by the Partner board. As it is probably the existence of the Axis bid will allow for some breathing space now for the board but you can be sure that the Agnellis will take care of the housekeeping issues and take them off the table.

The focus will be back where it should be. The shareholders need to decide whether they want to take the cash now or sign up for a longer term commitment with a joint PartnerRe-Axis entity that its advocates claim will create significantly more shareholder value.

This is why they have votes. It will be interesting to see what happens but the betting here is still on the Exor bid.

And if John Eikann is successful in acquiring PartnerRe we are very interested in seeing how that story unfolds. His statements indicate that he believes the executive talent at Partner is deep enough so that he believes it's likely that its leaders are already on the payroll.

But it is his premise that there will always be a need for a pure-play reinsurer, with highly rated paper, that is most interesting. In a time when others are rushing to combine forces watching a highly rated, well capitalized and well run PartnerRe function as a stand-alone reinsurer would be a relief in some sense.

This market is replete with headlines: "too big to fail", "systemic risk", "trillions of dollars in global exposures needing coverage", "emerging markets", "broker consolidation", "risk bearers big enough to provide life-cycle coverage of a risk", "ILS", "unproven claims paying abilities", etc., etc., and people actually think that there is no room for a highly rated stand alone reinsurer that can take these types of liabilities off a balance sheet?

People forget why reinsurers were needed in the first place. If this gets any more "clubby" we will need to dredge up the "LMX spiral" and the Gooda Walker files. Creating large entities to capture all of the risk chain sounds great when you're looking for premium wherever you can but it can be a problem if you're paying for the whole claim.

AXIS Founder John Charman weighs in

Like everyone else Endurance CEO John Charman has an opinion about PartnerRe. Remember, he is the founder of Axis and still a substantial shareholder in Axis. After the second bid from Exor he called on Axis' board to bow out of the fight for PartnerRe.

He said "I think it would be against the best interests of Axis shareholders to see the company make a competitive, overly dilutive bid for PartnerRe in the market conditions that we're going to see over the next two to three years." Well, we did say he remains a major shareholder and "dilutive" is not so nice a word to any shareholder anywhere.

During the Q1 earnings call this week Charman said that he believes reinsurance renewal pricing and CAT risk in particular are near the pricing point beyond which underwriters will not go.

He said "I think we're at that tipping point where I think so much margin has been given away. It's still a very profitable business, as long as you choose your cedent wisely, but I do believe that margins are getting to a point where the market will push back a bit."

To be fair, we have heard this kind of prediction before and not from Charman but it's what he next said that had us realize how bad things really are. He noted the upcoming Florida renewals and said that they will be "interesting" to see whether the market reduces its prices by more than single digits.

Ouch. This is the "tipping point"? More premium decreases on Florida wind but hopefully only a decrease in the "single digits"? Things are bad.

Charman is a pragmatist beyond anything else and hopefully is predicting that the rate or velocity of the decreases needs to level out before it plateaus and hopefully begins in the other direction. At least that's what we hope he is thinking.

The End of Reinsurance?

One of the headlines we saw this month read "Catastrophe deals threaten reinsurance sector collapse". Naturally we had to read on after a headline like that.

The study, by the Cass Business School, at the City University, London was a "three-year study of the reinsurance sector by a team of business school academics."

You wouldn't have found us out protesting with the Red Guard in the anti-intelligentsia "Cultural Revolution" in China in 1967 but we admit we were relieved that it was only a "team of business school academics" that were predicting the end of reinsurance.

We went to school too and can well remember the necessary, insular sheltering environment extant at universities. We read on.

The bottom line of the study was that it found that some companies are now packaging together catastrophe risks in a similar way to the carving up of subprime mortgages by big banks before the financial crisis.

The study concluded that it was possible that mainstream insurers were potentially spreading risks to parties that didn't fully understand them.

Hmm. This has been a complaint for as long as pension funds and capital market investors have been coming into this space in a very big way. And there is a legion of people out there, in the market, that are still pursuing the so called "Holy Grail" of secondary risk trading that would, if it succeeded, disperse risks to buyers far less understanding of them than presumably sophisticated pension funds and capital market investors.

The study wasn't done quite yet and noted that the reinsurance market had become over-reliant on catastrophe models to assess the risks and warned that "As other financial industries have collapsed, in part through their reliance on inaccurate models, so, too, reinsurance places itself at risk of collapse.

We are embarrassed to say that we filed the story away thinking that we would not use it. There are enough people talking gloom and doom right within our industry.

Then we saw this article titled "Catastrophe Bonds Risk Subprime Slice-Up, Swiss Re Says." Swiss Re CFO David Cole is quoted saying "It's important for traditional players like us and regulators that we make sure we don't get into a situation where you start having all sorts of packaging, repackaging, slicing and dicing and then risks ending up on balance sheets where they really shouldn't be."

Needless to say we quickly dug up the Cass Business School story.

That legion of people out there wandering around talking about trading of risks on a secondary market? Don't count Cole among them.

He said "There may be some folks out there who think they can come in and out of the market almost like a day trader, but I would really caution them against that as it's a market that is exposed to significant risks."

Traditional reinsurers like Swiss Re are not about to start chopping any risk up to sell on any market other than their own. If an investor wants to buy a piece of that risk we suspect that Cole would point them to Swiss Re stock.

Remember though that Aon Benfield predicts that by 2018 there will be $150 billion in alternative capital in the industry.

It is the risks underwritten by this capital that are the potential "chopping, slicing and dicing" targets noted by both Swiss Re and the Cass study.

The traditional insurers would tell you to buy their stock if you wanted to invest in their underwriting risk expertise.

Buffett says Reinsurance now 'fashionable"

As already noted the Berkshire Hathaway Annual General Meeting was held in Omaha earlier this month. As usual the event attracted thousands and Warren Buffett's every word was studied and pored over by analysts everywhere.

Two interesting points came up. One arose at the meeting when Buffett was commenting about his belief that reinsurance "is a business whole prospects have turned for the worse and there's not much we can do about it."

He said that hedge funds are setting up offshore reinsurers to gain a tax advantage, underwriting a small amount of business as a "facade". The resulting competition has driven down prices and the low interest rates are pressuring investment portfolios.

You of course have read about Buffett's pleasure at the immense amount of premium income the Berkshire insurance and reinsurance subsidiaries generate. He has referred to it as "float" and Berkshire invests that money and earns interest on it.

A year ago he got pretty elated about the whole process and essentially said that if his underwriters continue to write at a profit "our float will be cost-free, much as if someone deposited $62 billion with us that we could invest for our own benefit without the payment of interest."

Now we're not the sharpest knives in the drawer, by any stretch, but when we read that last year we couldn't help but notice the similarity between what Buffett is doing and what the hedge fund reinsurers are hoping to do --but not on a scale as large as Berkshire and its $62 billion in float.

Obviously a company can only generate $62 billion in premium if they are writing business so we are not remotely suggesting that Berkshire is not underwriting risk --of course it is.

But the mechanics seem to be not entirely different than what hedge funds such as Third Point and Greenlight Capital are either doing or hope to do. It's a little bit like the difference between a Piper Cub and an Airbus 380. They're both planes but one is a giant and the other is small.

We will admit that we were distracted by the size differential of the Berkshire $62 billion float compared to anyone else. We overlooked the mechanics.

So here is the second point that arose concerning reinsurance and it didn't happen at the Omaha meeting. One person who hasn't overlooked the mechanics is Third Point founder Daniel Loeb.

Loeb was quoted shortly after the Berkshire AGM as saying that Mr. Buffett "has a lot of wisdom, but I think we need to be aware of the disconnect between his wisdom and how he behaves."

Criticism of Buffett is so rare that Loeb's comments garnered headlines. He went on to note that "I love reading Warren Buffett's letters and I love contrasting his words with his actions," he said. Lest anyone think it was a put-down, he quickly added, "He's a very wise guy."

Loeb was speaking at a hedge fund conference in Las Vegas so he was in front of a very friendly audience. But we were struck that Loeb didn't go a bit further and point out the similarities between say for example the hedge fund reinsurer model and what Berkshire has been doing for years.

Loeb continued saying of Mr. Buffett "I love how he criticizes hedge funds, yet he had the first hedge fund," Mr. Loeb said. "He criticizes activists, he was the first activist. He criticizes financial services companies, yet he loves to invest in them. He thinks that we should all pay taxes, yet he avoids them himself."

No word on when the two will next meet...

A prediction for the CAT models?

Roger looks at the UK election polling data

The General Election held in the UK on May 7 produced a major shock, which has relevance to the insurance industry.

The shock was not that 1.1 million people voted for a party whose manifesto included extending human rights to "all sentient creatures", which would have made treading on an ant a capital offence.

The shock was not that the third most popular party gained 12.6% of all votes cast yet earned just 0.15% of the seats in Parliament.

The shock was not that a 20-year-old was elected to Parliament, the youngest Member in almost 350 years, with a stated agenda of breaking up the country.

No, none of those constituted a shock outcome.

The shock was that the election polls were consistently wrong, from the start of the campaign to the finish. The predictive modelling on which the polls are based turned out to be useless.

All 11 of the major national polls were at sea. Not just the polls of, say, the Guardian newspaper, the left wing's house organ, which consistently put its preferred party ahead in the polls, when every other poll had them, at best, neck and neck. In reality, the party was always miles behind. Had the Guardian used properly disinterested polling techniques, it would still have been completely wrong. Polling is a desperately flawed science.

Before the election, people were ashamed to admit that they planned to vote for the Conservatives, who won the election by a clear margin over all the others put together. In part, the "shame" people felt occurred because the British media relentlessly portray anyone who does not believe in unlimited national borrowing, taxing and spending as deranged. To admit to voting for a right-of-centre party is to be pilloried as heartless and lacking in compassion.

Voting in the UK is a private business. How one votes is secret. Only at the polling booth (or table, mostly; the British don't have booths) need a voter tell the truth. Polls rely on self-description, and Internet polls on self-selection. The endless reams of waffle that the media spewed out as a consequence of the polls were based, almost entirely, on false data.

Insurance companies' databases are full of information supplied by insureds. Rates are set based on the information in the database and the output of predictive computer models. Many insureds tell the truth about their risks, one imagines. Perhaps most insureds do. Using this self-prepared data, insurance companies apply the latest modelling techniques. Some of the companies take the commercial models as a starting point and prepare from them their own, individual forecasts. It's not a widely different process from political polling - with one exception.

A pollster who gets it wrong simply goes home and sends an invoice for his services. Insurance companies live and die, literally, by the efficiency of their rate-setting. If an insurance company were to establish its premiums using techniques as spectacularly wrong as those of the political pollsters, its executives would be out of work and their former employers out of business.

In the case of the insurance companies, the driver - money - is of such critical importance that companies must get it right. Pollsters, like their kin the weather forecasters, are under no such obligation. Right, wrong, who cares?

An interesting proof of this theory was that British bookmakers' odds on the election were keenly different from those suggested by the polls. Money talks.

(I was polled, by telephone. I was asked if I believed David Cameron's promise that, if re-elected, he would hold an in/out referendum on Britain's continued membership in the EU. My reply was "Yes, but". The "but" related to my belief that the referendum would be managed and accompanied by dire threats from all the parties and the media of the doom that would follow if Britain were to abandon the EU.

I was told that my answer had to be Yes or No, without ands, ifs or buts. I believe that Cameron has backed himself into a corner and will have no choice but to hold a referendum of some sort, so I answered Yes. There was no room in the poll results for my real views)

If you're concerned over a British exit from the EU, don't be. The country will stay in, regardless of the referendum. If, by some weird twist of fate, voters should reject the EU, they will be asked to vote again, and if necessary again, until they get it right. (For what it's worth, it's also crystal clear that Scotland will strike out for independence and penury within two or three years.)

I mention all this to show the importance of predictive modelling. Be certain that your company uses it better than the UK pollsters did, or face the consequences.

**************************

Roger Crombie is an American Society of Business Publication Editors national award winner. An English chartered accountant who lives in Eastbourne, on England's South Coast, he writes and broadcasts news and opinion in the US, UK, Bermuda and the Caribbean, in print and online. His main beat is insurance and financial services, with 30-year sidelines in music and humour. All views expressed in Roger's columns are exclusively his own. Contact Roger at roger.crombie@catex.com.

May 26, 2015

Quick Bytes

Yes, we did say "no photos" but this guy is a lot bigger now than he was in this picture and we want to keep him happy....Something surprising is that the Insider is reporting that cedents are increasingly benefiting from revenue sharing agreements with the brokers that place their programs. For the brokers, the willingness to share their commission is another sign of the competitive market. Didn't we see this, or something close to it, when Eliot Spitzer was was the AG in NY?.....Incredibly, some 150 American workers are killed on the job every day. According to a study by the AFL-CIO, the largest alliance of US labor unions, North Dakota is the deadliest state with 56 people killed on the job since 2013...Aspen CEO Chris O'Kane, commenting on the state of the property catastrophe reinsurance market said "I think some of that commoditized property cat is not as much fun as it was"...Munich Re's CEO Nikolaus von Bomhard hit the proverbial nail on the head when he identified the low interest rates (already hurting reinsurer investment returns) that are pushing investors to look for new asset classes. He said "The liquidity thus created also has a secondary effect of generating very intensive competition in the reinsurance market." We would call that a "double whammy"...A new study said that it's a stroke of luck that no major hurricanes rated Category 3 or higher have struck US soil in 9 years. The average wait time for a similar 9 year drought is every 177 years...Watch out New York and London. Willis CEO Dominic Casserly, commenting on Willis' acquisition of the 70% stake in French broker Gras Savoye that it didn't already own said "Although it's not fashionable, France is the fifth largest B2B market in the world" and that 100% ownership of Gras will give Willis more access to the French market where more multinational firms are headquartered than any other...North Korea's Kim Jong-Un has reportedly had his Defense Minister executed because, among other reasons, he fell asleep at a meeting Kim was chairing. Maybe we've secretly wished for that sort of power but actually doing it is another matter...