"We think Hurricane Irma could be a top 5 most costly hurricane in the U.S, although the losses could be in-line-to-lower than market expectations," Sarah DeWitt, an analyst at JPMorgan, said in a note Monday.
AIR Worldwide, a catastrophe modeling firm, said Monday it expects industry insured losses stemming from Hurricane Irma to range between $20 billion and $40 billion, below their initial forecast.
"Our sense is losses could be at the lower end of the range as the storm weakened faster than expected," DeWitt said.
Hurricanes have put markets on edge over recent weeks, as investors show signs of unease when it comes to assessing the impact of these natural disasters on certain markets, including insurance and airlines.
Shares of Travelers Cos., Progressive and American International Group rose 2.3 percent, 2.2 percent and 1.7 percent, respectively.
Shares of reinsurers, who could have been on the hook for extensive Florida damage because smaller insurers in the state are their customers, surged.
Everest Re Group and XL Group saw their shares soar 4.3 percent and 5 percent, respectively, and were among the best performers in the S&P 500.
The SPDR S&P Insurance exchange-traded fund (KIE) rose 2.2 percent.
Meanwhile, Delta Air Lines' stock climbed 2.9 percent while American Airlines rose 5.2 percent. Carnival, a cruise line company, also saw its shares advance 3.2 percent.
"Hurricane Irma was tough, but it looks like it wasn't as bad as some expected," said Randy Frederick, vice president of trading and derivatives at Charles Schwab. "Towards the close on Friday, you saw a bit of a sell-off as ... people braced for the worst."
The anticipation of Irma making landfall in Florida initially raised concern over U.S. economic growth. In fact, economists at Goldman Sachs lowered their third-quarter GDP estimate to 2.0 percent from 2.8 percent on Saturday noting, "We find that major natural disasters are associated with a temporary slowdown in most major growth indicators."
Gold and U.S. Treasurys sold off Monday as investors lowered their exposure to traditional safe haven assets. The benchmark 10-year note yield rose to trade at 2.136 percent while gold futures for December delivery dropped 1.2 percent to settle at $1,335.70 per ounce.
Geopolitical tensions were also back on the menu Monday as the U.N. Security Council is expected to vote on a resolution regarding North Korea. The U.S. wants the Security Council to place an oil embargo on the Asian nation. However, experts are skeptical about whether Russia and China would support such a measure.
"The [Trump] administration faces a battle to win UN Security Council approval of its call for an oil embargo and a partial naval blockade of the country," said Jonathan Fenby, chairman of TS Lombard in China. "Russia is hostile, calling new sanctions 'premature.' China's foreign minister has suggested it agrees more measures are needed but sources in Beijing say the leadership still opposes cutting off oil supplies."
Tensions between the Asian country and the West have escalated as of late, after North Korea failed to back down on its continuation of missile launches.
Investors were relieved, however, after North Korea's dictator, Kim Jong Un, chose to hold a party over the weekend, instead of opting for another missile launch. North Korea did say on Monday that the U.S. would pay a "due price" for spearheading a U.N. resolution against the country's recent nuclear test, according to Reuters.
Overseas, European stocks rose, while markets in Asia closed on a mostly positive note.
— CNBC's Christina Wilkie and Reuters contributed to this report.