Figures from Lipper show the FTSE All Share was down by 34 per cent over the year but Legal & General ‘s share price plummeted by 75 per cent in fears over capital reserves.
Aviva has also been hit by solvency concerns, with its share price down by 66.8 per cent. Old Mutual, Skandia’s owner, has seen its share price dive by 64 per cent while Prudential has seen a 60 per cent fall over the year.
Standard Life is the only insurer to outperform the FTSE All Share, with its share price falling by a relatively modest 30 per cent.
Richard Jacobs pensions and trustee services managing director Richard Jacobs believes the stockmarket jitters are justified.
He says: “This frightens me silly. I think this is a far more worrying time for life offices than the crash in 2002/03, which supposedly made the sector get its act together. We know what the risks are and I think when firms hit their minimum solvency ratios they will disappear very quickly. I doubt that we will end up with more than half a dozen insurance companies when this crisis is over.”