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Hagerty (NYSE: HGTY) reported what executives described as its strongest first-quarter performance to date, driven by record policy additions, accelerating premium growth and improved adjusted earnings. The company also reported weaker GAAP results, which management attributed to accounting impacts tied to a new reinsurance structure.
On the company’s Q1 2026 earnings call, CEO and Chairman McKeel Hagerty said written premiums increased 18% year over year, ahead of the company’s full-year expectations. He said the quarter marked Hagerty’s 13th consecutive quarter of executing on its growth strategy and that the company added a record 112,000 policies during what is typically a seasonally lighter quarter.
CFO Patrick McClymont said written premium totaled $289 million in the quarter, up 18% from the prior-year period. Earned premium rose 42% to $240 million, reflecting both premium growth and Hagerty Re assuming 100% of the underwriting risk on the company’s U.S. book of business beginning Jan. 1.
Hagerty reported 15% growth in policies in force. Retention was 89%, which management characterized as industry-leading. McKeel Hagerty said growth was driven by new business count rather than rate increases, distinguishing the company from broader trends in standard auto insurance.
McClymont said Hagerty Re’s combined ratio was approximately 87% in the quarter, with a 38% loss ratio. The company also reduced reserves by $6 million due to favorable prior-year development; during the Q&A, McClymont said the reserve reduction was approximately $6.5 million and was predominantly related to the 2025 accident year.
Adjusted EBITDA increased 77% to $85 million. McClymont said adjusted EBITDA is the metric management believes best reflects operating momentum given the accounting complexity in the current year.
Despite the premium growth, Hagerty reported a 5% decline in GAAP revenue and a net loss of $13 million for the quarter. Executives said the divergence between underlying business performance and GAAP results was due to the company’s new fronting arrangement with Markel.
McClymont said that under the new structure, MGA commission revenue and associated ceding commission expense that previously appeared gross on the income statement now eliminate in consolidation, explaining why reported revenue declined even as written premiums rose.
The quarter also included $89 million of costs from the amortization of deferred ceding commissions tied to policies written before 2026. McKeel Hagerty described the charge as “settling the tab on the old structure,” adding that the costs are expected to wind down to zero by year-end 2026.
Hagerty reported a Q1 loss before taxes of $21 million, a net loss attributable to Class A common shareholders of $7 million, and GAAP basic and diluted loss per share of $0.06, based on 101 million weighted average Class A shares outstanding. Adjusted diluted loss per share was $0.04, based on 361 million fully diluted shares.
Management highlighted Hagerty’s partnership with State Farm as a major contributor to policy growth. McKeel Hagerty said the State Farm Classic+ program is expected to have 19,000 agents selling new business in 40 states by year-end. He also said the conversion of State Farm’s existing 525,000 collector car policies to Hagerty’s platform remains on pace, with most expected to be converted by the end of 2027.
In response to an analyst question, McClymont said State Farm conversions are not seasonal and are based on the rollout schedule with State Farm. He said Hagerty expects to be selling in almost all states by the end of 2027, though some states could stretch beyond that due to regulatory complexity.
Executives also pointed to Hagerty’s independent agency channel, which includes 50,000 agents, as an area with significant potential. McKeel Hagerty said the company is investing in tools such as straight-through processing and automated systems to help agents identify enthusiast vehicles already in their books of business.
Marketplace activity was another focus of the call. McKeel Hagerty said Broad Arrow Auctions generated $111 million in total sales during a two-day sale at Amelia Car Week in Jacksonville, Florida, 50% higher than any prior Amelia auction. The event had a 92% sell-through rate and set 12 pricing records. The top sale was a 2003 Ferrari Enzo that sold for more than $15 million.
McKeel Hagerty said the auction results reflect demand for modern enthusiast vehicles and support Hagerty’s broader business model, adding that “every car that trades hands at a Broad Arrow auction is a potential Hagerty insurance policy.”
Marketplace revenue was $26 million in the quarter, down 12%. McClymont said the decline reflected lower inventory sales compared with the prior year’s one-time sale at the Academy of Art University, despite record auction results at Amelia.
Management also said Broad Arrow’s Porsche Air|Water auction in April saw sales rise 30% year over year with an 84% sell-through rate. In May, Broad Arrow is scheduled to return as the official auction partner of the Concorso d’Eleganza Villa d’Este with BMW Group on Lake Como, Italy.
Hagerty reaffirmed its full-year 2026 guidance, calling for written premium growth of 15% to 16%, adjusted EBITDA of $236 million to $247 million, and a GAAP net loss of $41 million to $51 million. McClymont said the company is trending toward the high end of those ranges but will revisit its outlook after the second quarter.
McClymont cautioned analysts against annualizing the first-quarter adjusted EBITDA result, noting the business remains seasonal and that expenses are expected to ramp through the year as Hagerty invests in headcount, technology, claims capabilities, B2B distribution, Broad Arrow, its digital marketplace and other initiatives.
For 2027, McClymont said Hagerty expects a more normalized income statement after the 2026 accounting transition, with revenue growth more closely tracking written premium growth. He also said the company anticipates another year of mid-teens written premium growth while continuing to invest for long-term member growth.
Hagerty ended the quarter with $212 million in unrestricted cash, more than $1.1 billion in total investments and $229 million in total debt, including $110 million of leverage tied to Broad Arrow’s loan portfolio.
Hagerty is a specialized automotive lifestyle and insurance company that caters primarily to collectible car enthusiasts. Its core business offers classic vehicle insurance policies designed to protect antique, vintage and specialty automobiles, motorcycles and boats, typically featuring agreed-value coverage, flexible usage options and access to restoration services. Beyond insurance, Hagerty operates community and content services under its automotive lifestyle brand.
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