Insurers have slipped back after a cautious note from Deutsche Bank.
The bank said: "We highlighted in September that the sector could withstand a 20% fall in markets. This has now come to pass, but while balance sheets look thinner, the majority of insurers continue to look robustly capitalised.
"At current market levels, new equity issuance thus seems unlikely, but the degree of uncertainty in the world remains high, and companies may start reassessing dividend levels.
"The sector remains exposed to financial market movements. We have further cut stated earnings forecasts for 2009 by 15%, and price targets by 12%. Moreover, we have cut expected dividends at a number of companies, amounting to 10% on average across the sector.
"The major risk factor for the sector remains the direction of financial markets, and the possibility that stronger capital measures may be necessary in a further sharp downturn. Other risks remain catastrophic loss events, reserve risks, cyclicality in property and casualty markets, and regulatory risks."
Its new price targets - while admittedly above the current levels - are 605p for Aviva from 621p, 105p for Legal & General from 125p, 130p for Old Mutual from 165p, 607p for Prudential from 680p, 249p for Standard Life from 266p and 150p for RSA Insurance from 160p.
In the market, Aviva is down 55.25p to 389.75p, L&G is 3.7p lower at 78.3p, Old Mutual has lost 12.5p to 64.8p, Prudential is off 53.25p at 375.5p, Standard Life has dropped 22.5p to 237.5p and RSA has slipped 7.6p to 124.3p.
Overall, with Wall Street down 260 points, the FTSE 100 index is now 237.2 points lower at 4157.0.
