Shares in insurance companies Aviva and Prudential have fallen. Aviva lost 13% after the speculation about £24 Billion bond portfolio passed, while Prudential shares fell 9.3 perecent.
Shares have fallen almost 30 perecent in 2 days, and nationalisation of insurance companies seems a real possibility, especially after the AIG case. At the same time, although a 40 percent slide in equities would take £700 million of Aviva’s capital, the company have said that would still leave them in a very strong position.
In addition to this, Prudential are also said to have in excess of a billion of capital, so both are for now, in a safe position. But what does the current market hold for insurance companies such as these two and AIG? The market situation is having a very negative effect on these, with shareholders selling and taking the value of stocks down. However, with the amount of capital and the vast value of both companies portfolios, they should be able to survive.
