Hagerty, Inc.

What they do

Hagerty provides collector car and enthusiast vehicle insurance through its Managing General Agent (MGA) operations and reinsurance subsidiary, Hagerty Re. It also offers a membership product (Hagerty Drivers Club), media and entertainment platforms, and a marketplace for buying and selling vehicles, including financing solutions. The company operates under a fronting arrangement with Markel, assuming 100% of the risk and controlling underwriting and claims.

Revenue drivers

• Insurance (Written and Earned Premium) — Primary revenue source; earned premium grew 42% to $492 million in H1 2026, driven by the Markel Fronting Arrangement and growth in subject premiums.
• MGA+ Commission and Fee Revenue — Commissions and fees from underwriting/servicing policies for carriers; H1 2026 revenue was $287 million, up 18% year-over-year, but consolidated commission revenue fell 84% due to the fronting arrangement.
• Marketplace — Auctions and financing; Q2 2026 revenue grew 48% year-over-year to $40 million, with H1 revenue up 17% to $65 million, driven by live auction sales and financing from the upsized BAC Credit Facility.
• Membership and Other — Hagerty Drivers Club subscriptions and other revenue; Q2 2026 revenue was $21 million, up 3% year-over-year, with paid members over 962,000.

Recent performance

For H1 2026, written premium grew 19% to $713 million and earned premium increased 42% to $492 million. Net loss was $5 million, including $153 million of pre-tax transitional costs from the Markel Fronting Arrangement, compared to net income of $74 million in the prior year. Adjusted EBITDA increased 32% to $160 million, and operating cash flow rose 91% to $186 million. Policies in force grew 19% to 1.9 million members, with retention at 88.2%.

Strategy

Hagerty is focused on fully owning the economics of its U.S. insurance book through the Markel Fronting Arrangement, which gives it 100% risk assumption and expanded underwriting authority. The company is investing in its ecosystem—membership, media, events, and marketplace—to drive member engagement and retention. It is expanding geographically, including the planned acquisition of Bennetts, a UK motorcycle insurance broker, to triple its scale in that market. Management emphasizes compounding growth from a high-retention, long-policy-life model and cross-selling across segments.

Risks

• Transitional costs and revenue disruption — The Markel Fronting Arrangement caused a $153 million pre-tax charge in H1 2026 and eliminated a significant portion of commission revenue, which could pressure reported results.
• Dependence on Markel — Hagerty relies on Markel as its fronting carrier and related party; changes in this relationship could impact operations.
• Underwriting and catastrophe risk — Assuming 100% of risk increases exposure to underwriting volatility, catastrophe losses, and reinsurance counterparty risk.
• Marketplace cyclicality — The marketplace segment is sensitive to collector car market conditions, tariffs, and consumer spending, which could reduce transaction volumes and financing demand.

Outlook

Management increased the 2026 full-year outlook to written premium growth of 16%–17%, net income of $18–$30 million, and Adjusted EBITDA of $270–$280 million. They expect continued benefits from the Markel Fronting Arrangement and growth across all segments, including the Bennetts acquisition in Q3 2026. The company anticipates lower reported revenue due to the elimination of commission revenue but higher profitability from full risk retention.