Hagerty, Inc. (NYSE: HGTY), a company dedicated to enhancing the experience of car enthusiasts through specialty vehicle insurance, auctions, media, and events, has announced its financial results for the first quarter of 2026. The results reflect a period of considerable momentum and a reaffirmation of the company’s growth outlook for the full year.

1. Executive Insight

McKeel Hagerty, the Chief Executive Officer and Chairman, expressed confidence in the company’s trajectory, stating, “First quarter results and the breadth of momentum across our ecosystem give us increasing confidence in our full year outlook that we reaffirmed today.” He noted an impressive 18% growth in written premiums, exceeding expectations, and a remarkable 42% increase in earned premiums, attributed to the January 1 transition to a 100% quota share under a new fronting arrangement.

Hagerty also highlighted the success of Broad Arrow, the company’s auction subsidiary, which hosted a record-breaking sale during Amelia Car Week. The auction garnered $111 million in total sales, achieving a 92% sell-through rate with participation from over 1,000 bidders spanning 23 countries.

2. First Quarter Financial Highlights

Hagerty's financial performance for the first quarter of 2026 exhibits both challenges and successes:

Written Premiums: Increased by 18% year-over-year to $289 million.

Earned Premiums: Rose by 42% year-over-year to $240 million, fueled by the increase in quota share.

Policies in Force: Retention stood at 88.5%, slightly down from 89.0% in the prior year, with a notable 15% increase in policies in force, totaling 1.8 million.

Commission and Fee Revenue: Experienced a significant decline of 84% year-over-year to $16 million due to the elimination of Markel commission revenue following the consolidation.

Marketplace Revenue: Decreased by 12% year-over-year to $26 million, reflecting strong auction sales at The Amelia but lower inventory sales compared to a one-time sale in the previous year.

Membership Revenue: Increased by 6% year-over-year to $22 million, with Hagerty Drivers Club membership rising to over 940,000.

3. Investment Income and Revenue Trends

Net Investment Income: Increased by 13% year-over-year to $10 million.

Total Revenue: Decreased by 5% year-over-year to $312 million, impacted by the transition to the Markel Fronting Arrangement.

Net Loss: Recorded at $13 million, which includes $89 million in pre-tax transitional costs related to the new fronting arrangement, contrasting with a net income of $27 million in the same period last year.

4. Key Ratios and Loss Metrics

The financial metrics reveal interesting facets of Hagerty's performance:

Loss Before Taxes: Reported at $21 million.

Hagerty Re Loss Ratio: Improved to 38.4% from 42.0% in the prior year, aided by favorable prior accident year loss development of $6 million.

Combined Ratio: Improved to 86.5% from 88.5% year-over-year.

5. Adjusted Financial Measures

Hagerty also reported a significant increase in adjusted EBITDA, a non-GAAP measure, which rose by 77% year-over-year to $85 million, compared to $48 million in the previous year. Basic and diluted loss per share for the first quarter were $(0.06), while adjusted diluted loss per share was $(0.04).

6. Financial Position

Hagerty's financial position remains robust with $212 million in unrestricted cash and total debt of $229 million, which includes $110 million in back leverage for Broad Arrow Capital’s portfolio of loans collateralized by collector cars.

7. Conclusion

As Hagerty navigates through the complexities of its new fronting arrangement, the company has demonstrated resilience and growth potential in the specialty vehicle insurance market. The strong performance metrics and continued expansion of its ecosystem, particularly through Broad Arrow, signal a promising outlook for the remainder of 2026. The company remains committed to serving its community of car enthusiasts and building long-term trust and value.

Original press release