FRIDAY MARKET CLOSE: Footsie rallies despite insurers’ woes

Assurances from life and pensions companies that the latest regulatory probe into the industry would have a limited impact on their balance sheets helped stem sector losses this afternoon.

The City watchdog is to investigate policies which penalise people who want to switch providers. Its reviews spans pensions, endowments, investment bonds and life insurance and covers 30 million policies sold between the 1970s and 2000.

There was a big fall at Friends Life insurer Resolution, which was set up in 2008 to consolidate the life insurance industry and is a major manager of closed funds. Its shares dived 7.1 per cent to 296.3p.

Phoenix Holdings – the UK’s largest consolidator of closed life assurance funds – tumbled 11.5 per cent to 652p in the FTSE 250 Index, though it had been down more than 20 per cent at one stage.

The falls were more muted elsewhere in the insurance sector, with Aviva off 2.8 per cent at 470.2p, Legal & General down 3.5 per cent at 205p and Standard Life just 1.6 per cent lower at 380.3p.