R.F.O. WEALTH ADVICE

13 One of the few companies to register real growth was credit insurance aided by the governments that wanted to promote the industrialization of their countries and promote exports. The reinsurers participated to the creation of credit insurers such as the Société Française d’Assurances pour Favoriser le Crédit , established in 1927. The Wall Street Crash in 1929 was a great surprise for everyone, including most of the foreign insurers active on the US market. Even worse, it was not simply an accident. It was a series of crises with no clear perspective of a constant recovery. When the crisis spread throughout Europe in 1931, the European insurers who were active on the US market were doubly affected. During WWII the US and Great Britain began to plan the reconstruction of a global system with the Atlantic Charter in1941. Then in 1944, 44 nations drafted the new international financial and monetary order in Bretton Woods. At the end of the war, it was politics, not business that prevailed. The efforts to rebuild the economy required the trade of raw materials. Insurance was considered a luxury. The Bretton Woods Agreement had not considered the role which insurance could play in the economy and in general it did not consider the service industry and intangible assets. During the 1960s countries in the world had too many US dollars compared to the US’s gold reserves and so in 1971 Richard Nixon unilaterally cancelled the direct international convertibility of the United States dollar to gold. This marked the end of the Bretton Woods system which had ensured the stability of world currencies. The capital markets rapidly adapted to the new risks linked to the exchange rate fluctuations and inflation. The oil crises in 1973 and 1979 and the subsequent market deregulation changed the insurance scenario once again. The London market too was obliged to change when US management styles and large German insurers began acquiring British companies. Mergers and acquisitions of the old insurance companies became the norm at the end of the 1980s and then continued in the 1990’s. Marika Lion Head Arts and Culture Department R.F.O.