AI Analysis | Feedback

Here are 1-2 brief analogies for Hagerty:

• Progressive for classic and collector cars.
• A premium AAA for car collectors and enthusiasts.

AI Analysis | Feedback

• Classic Car Insurance: Provides specialized insurance coverage for collector and enthusiast vehicles.
• Hagerty Drivers Club: A membership program offering benefits like roadside assistance, valuation tools, and event access.
• Valuation Tools & Data: Offers data-driven tools and market insights for valuing collector vehicles.
• Hagerty Marketplace: An online platform for buying and selling collector cars and related items.
• Events & Media: Creates and hosts automotive lifestyle events and produces enthusiast-focused content.

AI Analysis | Feedback

Hagerty (HGTY) primarily sells to individuals rather than other companies. Its major customer categories include:

• Classic and Collector Vehicle Owners: These are individuals who own vintage, classic, exotic, or other collectible automobiles and motorcycles. They are the core customer base, seeking specialized insurance coverage, valuation services, and community events tailored to their unique vehicles and the collector car lifestyle.
• Automotive Enthusiasts and Lifestyle Seekers: This category includes individuals who are passionate about cars, motorsports, and automotive culture, even if they don't currently own a "classic" vehicle. They engage with Hagerty through memberships (like the Hagerty Drivers Club) for access to exclusive content, events, roadside assistance, and discounts, connecting with the broader automotive community.
• Future Collectors and Next-Generation Enthusiasts: Hagerty also targets younger individuals and those new to the collector car hobby. This includes heirs of classic vehicles or emerging enthusiasts looking for resources, education, and pathways to enter or grow within the world of classic and collectible car ownership and appreciation.

AI Analysis | Feedback

Nationwide Mutual Insurance Company

AI Analysis | Feedback

McKeel Hagerty Chief Executive Officer & Chairman of the Board

McKeel Hagerty is the Chief Executive Officer and Chairman of the Board of Hagerty, an automotive enthusiast brand and specialty insurance provider. He has been the driving force behind Hagerty's growth from a local insurance agency started by his parents in 1984 to a publicly traded company. He became Co-CEO in 2000 and sole CEO in 2012. McKeel was also a co-founder and general partner of Grand Ventures, a Michigan-based venture capital firm providing early-stage capital and strategic support to emerging companies. He served as the international board chair for YPO, a global leadership organization for chief executives, from 2016-2017.

Patrick McClymont Chief Financial Officer

Patrick McClymont joined Hagerty as Chief Financial Officer in September 2022. Prior to Hagerty, he was the CFO of Orchard Technologies, a residential real estate services company. He also served as CFO for two publicly-listed companies: IMAX Corporation, an entertainment technology company, and Sotheby's, a leader in auctions and private art sales. Before his CFO roles, Patrick was a Partner Managing Director and Head of the Global Transportation & Infrastructure Group at Goldman, Sachs & Co. for 15 years.

Jeff Briglia President of Insurance

Jeff Briglia was appointed President of Insurance at Hagerty, effective July 1, 2024, leading all aspects of the company's insurance operations. He brings 22 years of insurance experience to Hagerty. Most recently, he served as President and CEO of Plymouth Rock Assurance's Direct and Partner Group, where he focused on driving growth and profitability for their direct-to-consumer business. His past executive leadership roles include positions at Metromile (COO and Chief Insurance Officer), Progressive, Allstate, and Mercury Insurance.

Coco Champagne Chief Human Resources Officer & Administrative Officer

Collette "Coco" Champagne serves as Hagerty's Chief Human Resources Officer & Administrative Officer. She has been a member of the Hagerty Executive Team for over a decade. Prior to her current role, she managed sales and service operations and was promoted to Vice President of Human Resources in 2002, and later to Senior Vice President and Chief People Officer. In 2018, she was promoted to Chief Operating Officer before assuming her current role. Before joining Hagerty in 1999, Coco was an officer of a national bank focused on retail consumer lending.

Kenneth Ahn President of Marketplace & Radius

Kenneth Ahn serves as President of Hagerty Marketplace & Radius, a role he took on after Hagerty's acquisition of Broad Arrow Group in 2022. He co-founded Broad Arrow Group and served as its CEO prior to the acquisition. Before Broad Arrow Group, Ken was the President of RM Sotheby's, a major collector car auction house, where he expanded its global footprint, formed strategic partnerships, and launched a collector car financing business. He also served as Sotheby's Senior Vice President for Strategy and Corporate Development, focusing on growth strategies, investments, and M&A. Ken began his career as a strategy and management consultant at the Boston Consulting Group and was a Vice President in the Investment Banking Division at Goldman Sachs.

AI Analysis | Feedback

The key risks to Hagerty's (HGTY) business include its dependence on the classic car and enthusiast market, exposure to catastrophe losses and underwriting risks, and intense competition in its operational markets.

1. Market Dependence on the Classic Car and Enthusiast Market: Hagerty's financial performance is closely tied to the health and appeal of the classic and enthusiast car market. A downturn in economic conditions or a shift in consumer preferences away from collectible vehicles could significantly impact the company's insurance premiums, membership subscriptions, and event revenues.
2. Catastrophe Losses and Underwriting Risks: As an insurance provider, Hagerty is vulnerable to substantial financial losses from unexpected catastrophic events, such as major earthquakes or devastating hurricanes. For instance, recent hurricane activity (e.g., Hurricane Helene and Milton) has directly led to lowered profit outlooks and increased loss ratios for the company. Beyond specific catastrophes, the company faces inherent underwriting risks, including unexpected increases in the frequency or severity of claims.
3. Intense Competition: Hagerty operates in highly competitive environments across its business segments. It faces competition from traditional insurers like State Farm and Allstate, as well as specialized classic car insurers such as Grundy Insurance and American Collectors Insurance. Additionally, its media and events platforms compete with other automotive media outlets and event organizers. This intense competition could put pressure on pricing, market share, and profitability.

AI Analysis | Feedback

null

AI Analysis | Feedback

• The estimated global transaction value for collector cars is over $50 billion per year.
• The total value of collector cars globally is estimated to be $1.6 trillion, with approximately $1 trillion of that residing in the U.S.
• In the U.S., the total addressable market (TAM) for registered classic/collector/enthusiast vehicles is estimated at 43 million.

AI Analysis | Feedback

1. Expansion of State Farm Partnership: Hagerty plans to significantly expand its State Farm Classic Plus program across the U.S. by 2026, aiming to add approximately 525,000 policies. This initiative is expected to accelerate new business growth and policy conversions, materially expanding Hagerty's customer acquisition funnel and recurring commission revenues.
2. New Strategic Partnerships: Hagerty has announced new partnerships with Liberty Mutual and Safeco, which are designed to offer enhanced collectible car insurance to their customers. These alliances are anticipated to expand Hagerty's distribution channels, bringing in tens of thousands of new customers and bolstering market reach.
3. New Product Launches and Market Expansion (Enthusiast+): The introduction and rollout of the "Enthusiast+" product are key to targeting the modern collectible vehicle segment (post-1980 vehicles). This product aims to unlock a new, substantial market segment that could significantly enhance Hagerty's growth trajectory by catering to a younger demographic of enthusiasts.
4. Increased Underwriting Risk and Premium Retention: Beginning in 2026, a new fronting arrangement with Markel will allow Hagerty to control 100% of the premium and risk, a 25% increase from the current 80% quota share. This shift is expected to enhance profitability through increased underwriting and investment income, providing greater operational control.
5. Growth in Membership and Marketplace Services: Hagerty anticipates continued growth in its Membership, Marketplace, and other revenue segments. This growth is driven by initiatives such as the expansion of European auctions, higher inventory sales, and robust activity in private transactions, contributing to the overall increase in revenue.

AI Analysis | Feedback

Share Issuance

• Hagerty went public via a SPAC merger with Aldel Financial Inc. in December 2021, a transaction that delivered up to $820 million in gross proceeds to the combined company.

Inbound Investments

• The December 2021 SPAC merger included a $704 million Private Investment in Public Equity (PIPE) led by strategic investors State Farm and Markel Corporation.
• In June 2023, Hagerty raised $105 million in capital from existing strategic investors, comprising $80 million of convertible preferred equity and a $25 million commitment of long-term debt financing for Hagerty Reinsurance Limited. These funds were earmarked for profitable growth initiatives and ongoing technology investments.

Outbound Investments

• Hagerty has acquired several classic car events, including the Amelia Island Concours d'Elegance, the Concours d'Elegance of America, and the Greenwich Concours d'Elegance.
• The company has been expanding its network of "Garage + Social" locations.
• Hagerty launched Hagerty DriveShare, a classic car rental business.

Capital Expenditures

• Hagerty's capital expenditures were $43 million in 2021, $44 million in 2022, $26 million in 2023, and $21 million in 2024.
• For 2025, Hagerty anticipates approximately $20 million in additional expenditures, primarily focused on its new technology platform, Duck Creek.
• These investments are intended to enhance business operations, improve customer interactions, and drive operating efficiencies and future margin expansion.