Insurers face £2.6bn tsunamis bill

EARLY estimates of damage from the catastrophic Asian tidal waves is put at around $5bn (£2.6bn), capping a disaster-laden year for insurers already facing huge payouts for the worst hurricane season for decades;

Shares in London took the tragedy in their stride, the FTSE 100 rising 9.1 to 4807.2. Even stocks in Lloyd's insurers, airlines and most travel operators held their nerve.

However, First Choice was under pressure after it said its UK companies had nearly 1,200 customers in areas affected, with one death reported so far.

It added that the disaster is not expected to have a 'material impact' on the current year's financial performance.

While damage estimates are sketchy, Gerhard Berz, a top risk researcher at reinsurance giant Munich Re, estimated the economic cost of the devastation at $13bn, though he stressed it was a gut feeling.

However, according to most analysts, the economic consequences for the countries involved is slight with the blow falling heaviest on poor rural communities and sparing big industrial centres.

Sri Lanka, where tourism is a large part of the economy, will be hit harder. And the future of the tiny island nation of the Maldives may be in the balance.

Before the tsunamis, reinsurance giant Swiss Re said the total economic loss from natural and man-made disasters this year was $105bn.

? The dollar hit a fresh record low against the euro for the fifth consecutive trading session, falling as far as 1.3646.