Gallagher Re, the reinsurance division of global insurance broker Arthur J. Gallagher & Co., says Hurricane Isaias is unlikely to influence upcoming 1 January reinsurance renewal discussions.
In post-landfall commentary dated 14 October 2026, the firm points to three factors. First, it expects insured losses, covering wind, coastal storm surge, inland flood and tornado damage, to settle at the lower end of the low-to-mid-single-digit billion range in US dollars, including the anticipated loss to the National Flood Insurance Program (NFIP).
Second, the storm struck a less populated part of Florida’s western Panhandle, with its track slightly east of the densely exposed city of Pensacola and a relatively small radius of maximum winds limiting exposure.
Third, the market is well capitalised: Gallagher Re says record levels of traditional and alternative capacity leave the sector well placed to absorb moderate catastrophe losses, so even a multi-billion-dollar loss would not materially alter pricing expectations, capacity availability or broader market sentiment heading into 2027.
Isaias made landfall on 9 October near Destin as a weakening Category 2 hurricane, with maximum sustained winds of 105 mph (170 kph), Gallagher Re reports. The firm adds that the overall direct economic cost is likely to run roughly 40 to 50% above the final insured total, based on historical norms for tropical cyclones.
It also points out that Isaias peaked as a Category 3 hurricane with 120 mph (195 kph) winds and a minimum pressure of 959 millibars, becoming the first hurricane and first major hurricane of the 2026 Atlantic season before hostile wind shear degraded its centre. Gallagher Re describes it as the first hurricane to make landfall on the US mainland since Milton in 2024.
Drawing on Weather Prediction Centre data, Gallagher Re says the strongest gusts were measured in Okaloosa, Escambia and Santa Rosa counties, reaching or exceeding 100 mph (160 kph). The highest gust in its table was 117 mph (188 kph) at Oriole Beach, followed by 114 mph (183 kph) at Milton. Using modelling from its partner Reask, the firm notes that peak gusts above 100 mph were concentrated near the coast and the landfall location, away from areas of dense, high-value exposure.
According to Gallagher Re, rainfall was heaviest across the western Panhandle and southern Alabama, with totals of 6 to 8 inches or more and a peak of 12.97 inches (329 mm) at Bellwood, Alabama. Flooding extended across Georgia, the Carolinas and Virginia.
The firm records a maximum measured storm surge of 5.57 feet (1.69 metres) at Panama City Beach, where the water level reached 5.59 feet (1.7 metres) above mean higher high water, the second highest at that gauge since 1995, behind only Hurricane Opal’s 6.84 feet (2.08 metres).
Gallagher Re also reports at least 21 confirmed tornadoes across the Southeast between 10 and 11 October, comprising five EF0, eleven EF1 and five EF2 events, with damage surveys continuing.
On wider impacts, Gallagher Re says nearly 900,000 customers lost power at the peak, mostly in Florida and Alabama, and several hundred Gulf Coast flights were cancelled. It reports eight storm-related deaths, six in Florida and two in Alabama.
Offshore oil and gas output was temporarily curtailed, peaking at over 70% of oil production and nearly 60 per cent of natural gas production on 9 October. The firm describes damage in Escambia County to residential and commercial property, including several multi-storey condominium buildings, and notes the destruction of the Milton High School gymnasium in Santa Rosa County.
Gallagher Re places Isaias within an exceptionally quiet season. By mid-October, it says, the Atlantic had produced nine named storms, one hurricane and one major hurricane, with an Accumulated Cyclone Energy (ACE) of 18.0, against a 2016–2025 average of 130.6 and a 1991–2020 climatology of 105.9.
The firm attributes the subdued activity largely to El Niño, which NOAA declared in early June and which Gallagher Re expects to become one of the strongest on record since at least 1850. It cautions that below-average seasons can still bring costly impacts, although US mainland tropical cyclone losses have historically been lower in El Niño years.
Looking ahead, Gallagher Re notes that El Niño typically brings above-normal winter precipitation to the central Gulf Coast. This could ease the region’s drought but raise the risk of flash and urban flooding, and of severe convective storms in late winter and early spring.
