Shareholders panicked over the effects of an economic downturn on investments held by insurers Aviva and Prudential.

Prudential and Aviva bear brunt as cash call fears hit insurers

Fears that insurers could be forced to call on shareholders to boost their finances sent stock prices tumbling yesterday despite assurances that the industry remained in good shape.

Insurers Aviva and Prudential suffered the biggest falls as shareholders panicked over the effects of an economic downturn on investments held by the two groups.

Aviva lost more than 12% of its value after a similar fall on Thursday, while Prudential fell 10% after a 20% drop the previous day.

Prudential had a surplus of £1.4bn in the summer and it is understood that it would take a fall of more than 40% in the market from the end of September before it needs to consider boosting its reserves. Aviva, which owns Norwich Union, had £1.9bn of surplus capital in June. (Source: Guardian)

If you thinking of ending your policies, don’t.

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