FTSE falls as investors fearful of insurance companies

by Kay Murchie

Story link: FTSE falls as investors fearful of insurance companies

The stock market has been volatile of late due to fears of a global recession, however, today, the FTSE 100 has fallen today with well-known insurers suffering heavy falls.

The latest stock market fall slump has renewed fears about the solvency ratios of the big insurance companies, as they may be forced to sell stock into the market if the value of their holdings falls too far.

Consequently, Aviva fell 59p to 292.75p, while Prudential, which has exposure to the troubled US market via its Jackson life insurance company, fell 48p to 246p.

Furthermore, Legal & General lost 9.4p to close at 60.3p after JP Morgan analysts said it is the most likely insurer to issue a profit warning.

Last month, Goldman Sachs issued a note to investors that suggested Prudential and Aviva may consider a merger to ride out the difficult times.