Last week the FTSE 100 plunged below the 4,000 mark as recession fears hit the markets, with financial and mining stocks suffering the worst losses. French and German markets were also hit hard.

But the FTSE bounced back this week; there was even a surge following Alistair Darling’s pre-Budget report.

The share prices of Aviva and Prudential plummeted last week, but listed insurers didn’t suffer too badly this week. There were still casualties, with shares in Legal & General dropping 18.05% to 63.10p and prices for Brit Insurance falling 11.01% to 196p per share.

Aviva’s luck was down again too as its shares plunged 12.9% to 330.75p. Others, including Amlin, JLT, Hiscox, Admiral and Beazley Group, suffered only slight dips.

But the big insurance companies didn’t fare as badly as some banking stocks. Lloyds TSB shares were down 22.41% to 160.60p, although the largest faller was Royal Bank of Scotland, with a drop of 31.18%. Clearly investors are not impressed that a deal has not yet been struck over the sale of the bank’s insurance arm.

Barclays, meanwhile, enjoyed a small 4.15% rise in its share price after shareholders overwhelmingly approved its plan to raise £7bn from Middle Eastern investors. This followed initial fierce opposition when some said the bank should have accepted offers of support from the UK government instead.

Some AIM-listed insurers had a more volatile week.

Resources In Insurance recorded a 15% drop to 42p, Jelf’s price fell 14.04% to 73.50p, while Abbey Protection shares went down 6.25% to 60p. Leo Insurance Services experienced the biggest drop. Its shares on AIM were down 25% to 1.50p, the lowest they have been this year. At their peak the shares were 9p.

Homeserve, which specialises in insuring household items such as boilers or domestic appliances, was the week’s biggest AIM casualty. Its shares tumbled by almost 29% to 352p after it admitted to investors that its customer retention rates might fall to 83%.

Richard Harpin, Homeserve’s chief executive, told the Financial Times that the forecast fall was a “prudent” step.