Hagerty reports Q3 2024 results

Hagerty held its earnings call on November 7, 2024, highlighting several key achievements:

• The company employed 1,700 people (down from 1,874 total employees in 2022) and saw year-to-date written premium growth of 16%.
• Total revenue for the third quarter increased 17% to $323 million, with written premiums up 13% due to new business growth and retention at 89%.
• Hagerty is on track to add a record 275,000 new members in 2024, with 220,000 new members added in the first nine months. (In 2023, Hagerty insured approximately 2.4 million classic cars.)
• Membership, Marketplace, and other revenue grew 27% to $42 million, while Marketplace revenue alone rose 54%, driven by auction results, higher inventory sales, and increased financing revenue.
• Earned premium for Hagerty Reinsurance increased 24%, supported by written premium growth and quota share expansions.
• For the full year, Hagerty projected total revenue of $1.18 billion with written premium growth of 15%. Estimated net income was expected to be between $65 million and $74 million, with adjusted EBITDA between $110 million and $120 million, including $30 million in catastrophe losses from Hurricanes Helene and Milton.
• The company reported a third-quarter operating profit of $10 million.
• Hagerty was asked whether it could sustain mid-teens revenue growth while keeping expense growth at current levels or if a catch-up in expenses would be necessary. CFO Patrick McClymont explained that Hagerty is structured to deliver mid-teens written premium growth, with even faster growth in its Marketplace business, while maintaining disciplined expense control. The company is currently investing in initiatives such as the State Farm rollout and its technology transformation (Apex/Duck Creek systems). Despite these investments, margin expansion is expected to continue, with further improvements anticipated once these initiatives are completed. Revenue is projected to grow faster than expenses, enabling operational leverage.
• When asked whether rising auto insurance rates impacted shopping behavior and how this affected Hagerty’s new business trends, CEO McKeel Hagerty explained that higher rates across the industry have led more consumers to shop for alternatives, benefiting Hagerty due to its competitive pricing. However, as rate increases slowed during the summer, shopping activity began to level off.
• Hagerty plans to launch its Enthusiast Plus business in early 2025 through its newly acquired insurance company, finalized during the third quarter.