British life assurer Prudential posted a 15 per cent drop in half year operating profit today, hit by falling equity markets and bond losses in the United States.
Like the rest of the European insurance sector, Prudential shares have been hit by concerns that tumbling stock markets are eroding insurance companies' reserves for paying claims and denting their ability to withstand further volatility.
European insurers including Dutch firm Aegon, Dutch-Belgian Fortis have issued warnings about deeply lower profits.
Prudential reported an achieved operating profit of £543 million sterling for the first half of this year, down from £642 million a year earlier.
Prudential shares, which dived 8 per cent yesterday are at their lowest level for six years. They have underperformed the financial sector by 5 per cent and the European insurance index by three since the beginning of this year.
Prudential's bond losses have included a $150 million exposure to WorldCom.