Royal & Sun Alliance led the revival of the insurance sector on the markets this morning, driven by a 100 point surge in the FTSE and the FSA's re-assurance of the industry's solvency.

Insurers, which are traditionally geared to equity market performance, took heart from the surge in the FTSE. Recoveries in share values underpin the fortunes of insurance stocks, which traditionally invest reserves in the equity market.

Royal & Sun Alliance led the surge, gaining 9.5%. Prudential and Aviva gained 6.9% and 7% respectively, while Friends Provident gained 6.9%.

The market started nervously after confidence in the sector was shaken when AMP chief executive Andrew Mohl admitted its UK arm had run into difficulties. Mohl said several rivals were in financially parlous situations.

This was strongly refuted by the Financial Services Authority. An FSA spokesman said: "We have no idea what Mr Mohl is referring to, or where he is getting his
information from. Certainly not the FSA."

Topics