Gallagher Re, the global reinsurance broker, has warned that the insurance industry is facing yet another multi-billion-dollar loss, this time from a bout of considerable US severe convective storm (SCS) activity spanning 9 to 12 August.
In its latest Event Commentary, Gallagher Re reports that the outbreak struck much of the Plains, Midwest, and Mid-Atlantic regions, with the most significant impacts stemming from a derecho that swept through the Chicago metropolitan area before continuing on to affect Indiana, Ohio, and Kentucky on 11 August.
Gallagher Re further reports that year-to-date industry losses from US SCS activity have now risen above USD $35 billion, as the peril’s “quiet” start during the first three to four months of 2026 has since given way to a prolonged spell of intense activity.
The company points out that the most recent five-year average (2021-2025) for this peril stands at USD $50 billion, and while 2026 has not yet reached that average, the year already ranks as the sixth most expensive on record for the insurance industry Gallagher Re observes that this has become a peril marked by remarkable consistency in loss costs for insurers and reinsurers alike.
Given the extensive damage caused to residential and commercial structures, as well as to vehicles, utility networks, and agriculture and agribusiness, Gallagher Re anticipates the 9-12 August period will drive a low single-digit billion loss for the insurance industry. Gallagher Re further estimates that the overall direct economic cost will be at least 25% higher once uninsured and underinsured assets and other losses are taken into account.
Including this preliminary estimate, Gallagher Re calculates that public and private US SCS losses have now exceeded $35 billion for 2026. Gallagher Re counts at least six outbreaks this year that have resulted in a multi-billion-dollar industry loss, a total surpassed only by 2023, 2024, and 2025. This marks, by Gallagher Re’s reckoning, at least the fourth consecutive year in which US SCS losses have crossed the USD $35 billion threshold on a nominal basis.
Although Gallagher Re observes that 2026 is not currently on pace to reach the record loss levels endured by the US insurance market over the past three years (2023-2025), it remains, in Gallagher Re’s assessment, an upper echelon year for loss costs. Gallagher Re calculates that 2026 currently sits as the sixth costliest calendar year for insured losses on an inflation-adjusted basis on record, and the seventh costliest year on a normalised basis, once historical events are accounted for using today’s exposure, wealth, and other socio-economic factors.
Gallagher Re reports that a confirmed derecho generated exceptional wind damage across northern Illinois and Indiana, before evolving further and causing further damage in Ohio and Kentucky. Gallagher Re notes that more than one million customers across the US were left without electricity at the peak, the majority in Illinois, Indiana, Ohio, and Kentucky.
The company further states that the worst impact occurred in Chicago’s south and west suburbs, where damage to property, including torn-off roofs, structural impacts, and broken windows, as well as to vehicles, infrastructure, vegetation, and crops, was incurred, affecting Tinley Park, Orland Park, Mokena, Flossmoor, Monee, and surrounding communities. Gallagher Re notes that the region had already been affected multiple times this summer by SCS, with clean-up and recovery operations still ongoing as the 11 August derecho unfolded.
Gallagher Re highlights that a defining feature of the 2026 season has been repeated outbreaks across the Midwest and Great Lakes, with Illinois particularly hard hit. The company reports that the state alone has now officially recorded more than 200 confirmed tornadoes year-to-date, a new all-time calendar year record with several months still remaining in 2026, surpassing the previous record of 142 tornadoes confirmed in 2024. Gallagher Re notes that Illinois has recorded the most tornadoes of any US state so far this season, by a wide margin.
