Confidence in European insurers drops

The cost of credit protection on the subordinated debt of European insurers rocketed in early trading today.

Five-year subordinated credit default swap (CDS) spreads referencing UK insurance group Aviva widened to 670.87 basis points at 12:30pm London time from 515bp at the close of New York trading yesterday. Local rival Prudential saw spreads on its subordinated debt reach 1000bp from 802.51bp, according to data from credit information specialist CMA Datavision.

Elsewhere, Zurich Insurance saw its subordinated CDSs moved out to 249.14bp from 200.4bp and the cost of protection on Assicurazioni Generali

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