(Reuters) — Britain's top shares fell as investors looked to the potential cost of Hurricane Sandy on insurers and the U.S. economy.

Volumes were low and the U.S. stock markets will be shut for the day because of the storm that it destined to hit the U.S. East Coast later in the day.

Insurers were among the fallers and energy stocks were dented by a drop in crude prices as the storm saw refineries in the region shut. Airline stocks fell on concerns over flight disruptions.

At 1142 GMT, the FTSE 100 was down 40.71 points, or 0.7% at 5,766.00 points, albeit in low volume of just 17% of the 90-day daily average, reflecting the absence of U.S. trading interest.

October is on track to be the third quietest month for the FTSE 100 this year in terms of volumes, after July and August.

The mid cap FTSE 250 index saw a big hit too, down 0.6%, weighed by big falls from Lloyds of London insurers such as Amlin, Hiscox, Catlin and Lancashire, which shed between 3.2 and 4.0%.

Sandy, which could become the largest storm to hit the U.S. mainland since records began, is headed for the country's most densely populated area, threatening destruction and flooding.

"I think it's fairly natural that the market's fretting a wee bit in terms of potential exposure," said Eamonn Flanagan, analyst at Shore Capital.

"You've got to look at the Lloyds' insurance companies in particular — they're the ones with the big exposures."

Airlines were weak with flights to the U.S. East Coast delayed and cancelled by the hurricane threat. British Airways owner International Consolidated Airlines shed 1.3%.

The big storm weighed on global financial markets already suffering from concerns about the health of the world economy and a relatively gloomy third quarter reporting season, which has so far seen a third of U.K. companies miss expectations.

"Third-quarter earnings have not provided the real boost that some might have looked for, and markets have found it difficult to make real headway as a result," said Chris Beauchamp, Market Analyst at IG.

British oil majors BP and BG Group will kick off the sector's third-quarter reporting season on Tuesday and Wednesday, respectively, with uncertainty about the numbers also weighing on the heavyweight energy sector.

Banks were also weak ahead of trading updates due this week from Barclays, Lloyds and RBS, with investors concerned about the likelihood of more provisions.