Shares in Britannic Assurance have dived following news of falling profits, although the Britannic Group insists other parts of the business – including Britannic Money – are performing well.
Britannic blames Assurance profits that are “significantly below” market expectations upon poor stock market performance may force it to defer bonuses to policyholders and cut share dividends.
But the group says Britannic Money's results should slightly exceed expectations, while Britannic Asset Management's result should come in slightly below.
Shares in the company have dropped 50% in response to the news.
Britannic says it could survive if stocks fell to lower levels but said it was taking “prudent, precautionary action” to maintain its financial strength.
Bryan Portman, managing director, says: “We have to take account of where the markets are, and 2003 is looking more difficult than people forecast.”