Insurance businesses were hit by the Brexit vote as shares fell heavily across the sector today, with shares in Aviva down 17% at the opening of business.

Insurer L&G also saw its shares fall 15%, with other insurers hit heavily as the market reacted.

Standard Life reinforced its durability, stating that it was previously successful in adapting to changing markets and regulation. "Consequently, we will have the required measures in place to help ensure we can continue to support our customers and clients and our other stakeholders across our group as the negotiations develop," it said in a statement.

Lloyds, the insurance market that allows insurance firms to passport into the EU via its market in London, had been campaigning heavily for months against a Leave vote, as exiting the Single Market will challenge its business model. However the market’s chairman John Nelson said that he was confident that Lloyds would stay at the centre of the global specialist and reinsurance sector.

The investment wing of insurer Royal London, RLAM, was pessimistic about the wider economic fallout.

Piers Hillier, chief investment officer at Royal London Asset Management, said: ‘On the back of this morning’s result we expect the UK will fall into a recession. Unfortunately I see unstable market conditions lasting for between three and five years whilst new trade agreements are drawn up.’

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By GlobalData

‘It is our view that the UK government will be left with no choice but to stimulate the economy through fiscal and monetary means, flooding the system with liquidity if necessary.’

From a regulatory angle, the accountants saw an element of stability in the forthcoming arrangements.

Jonathan Howe, UK insurance leader at PwC, said: "To answer the first question insurance companies will be asking – Solvency II will almost certainly remain – too much time, money and effort has been invested and the regulation is enshrined in UK Law. Additionally, the insurance industry should not expect significant dissolution of ‘cumbersome’ EU regulation, given the perception that the UK has a history of ‘gold plating’ insurance regulation.

"The Lloyd’s & London Market and General Insurance Market make extensive use of passporting. The loss of these rights could see insurers being forced to restructure and facing large operational, regulatory and tax costs as they adapt to such a change.

"Many non UK insurance companies from areas such as the USA and Asia currently use the UK as their European headquarters and as a ‘gateway’ into Europe through EU/EEA passporting. There is a real risk that these rights could be eliminated and insurers will be thinking about the best location for their bases in the future."

"Aviva will continue to monitor the technical implications of the vote to leave, which will only be resolved after several years of negotiating a new relationship between the UK and the EU."

And the Association of British Insurers (ABI) moved to reassure customers.

Director general of the ABI Huw Evans said: "The UK insurance and long-term savings industry is strong and built to protect customers from market uncertainty and shocks. Customers should remember we remain part of the EU until the process of leaving is complete and they should therefore avoid hasty decisions about their financial matters. For the UK Government, it will be important now to focus on ensuring the UK remains a globally competitive place to do business with the best possible future trading network with the EU and the wider world."