Insurers took a painful tumble when disappointing full-year figures from Zurich Financial Services, and more importantly a warning that there would be no growth in the current year, confirmed the market's worst fears.

Zurich Financial's shares fell 20.2 per cent to SFr549 (€359.01), taking losses since the start of the year to almost 45 per cent. The fall, by far the share's biggest one-day decline, left the company at its lowest level since early June 1997.

The group's credibility began to look strained after its surprise profits warning in February. Yesterday's news of a 5.5 per cent decline in "normalised net profits" failed to meet even lowered expectations. And worse was to come from chairman and chief executive Mr Rolf Hueppi; there would be no growth this year, and no return to the longer-term profits growth target of 10 to 15 per cent until 2002.

Insurance was among the biggest fallers in the FTSE Eurotop-300 series as the Zurich Financial results raised questions about the group's status as a safe haven. The insurance sub index registered a loss of 7 per cent in late afternoon trade.

Among other big guns to register hefty losses were France's AXA, down 9.4 per cent to €111.30 and Germany's Allianz, which lost 5.2 per cent to €309.45.

Elsewhere in financials, Fortis dropped 6 per cent to €25.52 as the Dutch-Belgian group reported 2000 net profits at the low end of expectations. Germany's HypoVereinsbank lost 2.8 per cent to €59.

European technology, media and telecom stocks started badly and got worse as the day continued. One of the most troubled was the Dutch cable company United Pan-Europe Communications, which fell 25 per cent to another record low of €6.

The telecommunications sector fell about 5 per cent, with the worst performer being the Dutch operator KPN Telecom, down 10.5 per cent to €10. France Telecom fell 3.2 per cent to €56.25 after reporting annual profits that were slightly weaker than expected.