Insurance stocks have been riding a rollercoaster since last Tuesday's terrorist attacks in the US – and it appears to be a ride that has had more dips than peaks. The realisation that our industry is facing the biggest claims in history was quick to take its toll and markets lost no time in selling their shares.

Sellers did not discriminate between insurers and reinsurers – all insurance stocks were bad in their eyes. The world's largest reinsurer, Munich Re, and Royal & SunAlliance (R&SA) both saw 15% wiped off their values that Tuesday. Prudential lost 12% and CGNU lost 8%.

Over the next few days, as the process of trying to estimate the appalling costs in both human life and property began, insurers saw their share prices continue to fall.

By midday Wednesday, it seemed insurers would bounce back to regain at least some of their losses – Munich Re, CGNU and Prudential ended the day higher than they had been at the close of the previous day's business.

Commentators said investors had overreacted and encouraging prices at the close of business on Thursday reinforced the impression that a sense of reality, however grim, was returning to the markets.

By the close of business on Thursday, R&SA bounced back by 9.72%. Shares in CGNU had made gains of 3% and 2.57% on Wednesday and Thursday respectively and Prudential also climbed back from heavy falls, gaining 6.55% and 1.98% on Wednesday and Thursday.

But the week that saw the most devastating terrorist attack in history was not over yet. With New York still closed, markets in London and Europe saw prices in the insurance sector falling further as selling continued apace. By midday Friday, R&SA was riding the rollercoaster down into another dip, with its share price down 5.79%. CGNU were down 5% and, in Frankfurt, Munich Re were down 1.32%.

Insurance is being hit hard, but it is not the only sector to suffer. Share prices of airlines have dipped sharply as brokerages and credit agencies have produced gloomy financial outlooks for the industry. The International Air Transport Association estimated that flight cancellations alone would cost $10bn (£6.6bn) before the fall in passenger numbers, as seems likely, is taken into consideration.

Ratings agency Standard & Poor's, after predicting a “short and moderate recession in the US”, forecast that the reopening of the New York Stock Exchange would see falls, followed by a rebound. “Industries most impacted by immediate events will be insurance, which is in the early stages of assessing its exposure to Tuesday's attacks, and the airline sector, which is vulnerable to the potential for reductions in travel and higher fuel costs,” it said.

With insurers needing to call on every reserve available to them, it can only be hoped that values rebound those seen before Tuesday's tragic events. And that must happen quickly to bring stability at a time when it is needed most.