European insurers face new costs and travel firms could lose business after tsunami waves killed more than 22,000 in Asia this weekend, but the financial impact is expected to be limited compared with other disasters this year.
The markets took a cautious stance, however, pushing down shares in insurers, reinsurers and tour operators.
Germany's Munich Re, Switzerland's Zurich Financial and other insurers said it was too early to assess the cost of Sunday's deadly waves, which brought havoc to shores from India to Thailand.
"There will be damages, even though for reinsurers they will not be that considerable - first, because not very much is insured in these regions, and then a lot is covered by local (companies)," said Stefan Schuermann, analyst at Helvea.
Rescue workers continued searching for bodies yesterday after the world's biggest earthquake in 40 years, off the Indonesian island of Sumatra, triggered huge waves that flattened houses and hurled fishing boats ashore.
At 1215 GMT, shares in the world's top two reinsurers, Munich Re and Swiss Re, which insure other insurers, were both down 1.9 per cent. Hannover Re was 1.3 per cent lower.
Shares in Europe's largest tourism firm TUI AG also fell, as did German airline Lufthansa, which along with KarstadtQuelle operates travel firm Thomas Cook.
Some analysts doubted, however, that these firms would be badly hurt.
"A lot of people who now want to go to Asia for holiday will go instead to the Mediterranean or North Africa and that will be good for these companies, because margins are a little higher," said one tourism analyst in Germany, asking not to be named.
TUI said that it foresaw no significant impact on sales and earnings from the tsunami, adding that only one per cent of its tourism revenue was generated in the region hit by the disaster.
Airlines Lufthansa and Air France-KLM said they had seen no major cancellations and were flying to the regions as normal.
Swiss International Air Lines, whose volatile stock was down almost seven per cent, added that it had received around 60 cancellations on flights to Bangkok between Sunday and the end of the year.
French holiday village operator Club Mediterranee, whose stock dropped four per cent at the opening, said its insurance would cover any losses from the tsunami waves, which hit its two resorts in the Maldives and one in Thailand.
"The economic impact is clearly on the tourism sector in Southeast Asia because many of the facilities have been destroyed, but the impact for European insurance companies is not quite clear," said Juergen Lukasser, global fund manager for Constantia Privatbank in Vienna. For insurers, the potentially large new losses come on top of a string of storms, typhoons and earthquakes that had already made 2004 the most expensive year to date for the sector, according to research from Swiss Re.
Excluding the tsunami, disasters - both natural and man-made - have killed 21,000 people around the world this year and have prompted claims to property insurers of about $42 billion, according to the research, released this month.
A spokesman for Munich Re said it was too early to tell whether the company's 2004 profit target of €1.8 billion to €2 billion was at risk. In principle, Munich Re assumed that the volume of damage was lower than in cases of large hurricanes, because tsunami waves hit only coastal regions, not the heartland, he said.
Hannover Re said it could not yet determine what impact potential claims might have on its profit target, which it cut earlier this year after hurricanes hit the Caribbean and the United States.
Zurich Financial and Swiss Re also said it was too early to assess damages.
Share prices, however, reflected a market view that reinsurers would pick up most of the tab for the disaster, leaving Europe's primary insurers relatively unscathed.