Royal & SunAlliance is facing a £1.2bn deficit on its staff pension scheme, analysts estimate.
Experts at Morgan Stanley believe the UK insurance industry has a £2.8bn shortfall on its pension schemes as a result of stock market falls.
A research note published this week puts R&SA as the worst affected.
It estimates the insurer has a pension scheme deficit of up to £1.2bn.
Morgan Stanley's calculation wipes £848m off its valuation of the company, based on calculations that the analysts described as "optimistic".
The investment bank set a target price for the stock at 73p - about 20% lower than its current price.
The stock fell 3.1%, or 3p, this morning to 94p.
A spokesman for Royal & SunAlliance said: "The assumptions they've used to make the figure of £1.2bn contradict actions we've already announced that we've taken.
"The pension fund scheme was closed in April 2002 and that will reduce the load on the scheme over time."
