Insurer shares tumble on fears of €1 trillion Greek default

AXA’s share price tumbled 4.83% yesterday, leading the way in a bloody day for insurer stocks as the eurozone crisis reared its head once again.

Aviva plummeted 4.68% and Allianz fell 3.75%.

The Institute of International Finance believes that a disorderly Greek default could trigger €1 trillion of euro losses and suck Spain and Italy back into the quagmire.

The Greek government is fighting to get bondholders to accept a voluntary writedown on their assets. Such an agreement would also avoid triggering insurance payouts in the form of derivative instruments called credit default swaps (CDS).