German insurance group Munich Re sent a chill through its sector when it issued a shock profit warning yesterday due to ongoing volatility in markets. Its shares dived 7.3 per cent to €107.88.

“This is a double whammy for Munich Re. They have already been punished by declines in the stock market and now they are being punished again by accounting,” said Mark Satori, head of European equities at Fox-Pitt Kelton. The insurance company will have to revalue its assets in the light of recent stock market declines.