Shares in Aviva rallied on Thursday after the life and general insurer moved to calm fears over its solvency position by saying it could withstand a further 40 per cent drop in the equity market.

Shares in Aviva have been hit badly by the recent stock market rout, tumbling 23 per cent in the past three weeks and underperforming the FTSE 100. Insurers typically hold much of their assets in equities and as such are seen as leveraged plays on the wider stock market.