Insurer Prudential revealed a £3.9 billion hit to its asset management arm as retail investors were scared away by volatile global markets.
The firm said retail investors pulled the funds out of its M&G business during the third quarter after China economic slowdown fears sent markets reeling.
It also cautioned it expects "high levels of volatility and macroeconomic uncertainties" to continue into the fourth quarter.
Shares fell three per cent as the outflows overshadowed figures showing new business profit across the group lifted 13 per cent to £1.8 billion in the first nine months of the year, driven by a 24 per cent jump in Asian new business profit to £976 million.
In the UK, new business profit rose 16 per cent to £231m in the first nine months, lifted by demand for flexible retirement products in the wake of the pension reforms announced by Chancellor George Osborne last April.
Mr Osborne has changed rules so that it is no longer compulsory for retirees to buy an annuity for their pensions, which provides an income for life.
The insurer said: "These results reflect our successful response to the new emerging consumer landscape following significant industry reform."
However, at its M&G asset manager arm, total retail funds under management reduced to £63.5bn at the end of September, down from £73bn a year ago, due to "weak investor sentiment".
In the third quarter, the near-£4bn in fund withdrawals from retail investors far outweighed £1.2bn of inflows from institutional investors.
Financial markets were rocked over the summer by fears of a slowdown in China's economy and an impending interest rate hike in the United States.
Pru said in the US, premium sales fell four per cent to £1.2bn in the first nine months as American investment markets "continued to be influenced by increased volatility and domestic uncertainties in the third quarter".
But chief executive Mike Wells, who took over from Tidjane Thiam in June, said the group made "good progress in the third quarter".
He added Pru was benefiting in the UK from a "proactive response to the changes brought about by pension freedom reforms".
"Overall, our strong performance in 2015 continues to demonstrate the successful execution of our strategy in pursuing clearly defined long-term opportunities in Asia, the US and the UK," he said.
Shore Capital broker Eamonn Flanagan said Prudential had delivered an "excellent" new business performance over the last nine months.
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