Insurance stocks were hit hard in trading yesterday in the wake of Munich Re's earnings downgrade.
The setbacks were fuelled by an announcement from US broker Merrill Lynch, that the worries about insurers' balance sheet's were "getting worse".
The sector was also hurt by the fallout from last week's news from the world's largest insurer, American Insurance Group, which last week took a £1.7bn of liability claims charge.
Allianz, where Munich Re holds a 20% stake, hit a 10-year low, falling 4.4% to €64.80 (£42.76). Swiss Re was 3.6% off at SFr75.30 (£33.80).
