Hagerty (HGTY) 2024 KBW Insurance Conference summary

Company overview and business model

• Operates as a lifestyle brand, insurance risk taker, and broker in the collector and enthusiast car market, with primary operations in the US, Canada, and UK.

• Largest player in the specialty car insurance space, focusing on vehicles that appreciate in value and require specialized claims handling.

• Business model includes direct-to-consumer sales, agent/broker channels, and partnerships with major insurance carriers.

• Owns event companies, media, and auction businesses, enhancing authenticity and engagement in the automotive community.

• Growth strategy centers on converting standard market-insured vehicles to specialty insurance and expanding through partnerships.

Market size and customer trends

• Total addressable market in North America is about 46 million registered vehicles of interest.

• Higher market penetration in older vehicles, with newer generations entering the market through different channels like video games and digital media.

• Most specialty vehicles are mis-insured as daily drivers by standard insurers, presenting a significant growth opportunity.

Claims, loss ratios, and operational efficiency

• Specialty vehicles are challenging for standard insurers due to appreciating values and complex repairs.

• Loss ratios are lower and more stable than standard auto, but average premiums are also lower, requiring operational discipline.

• Proprietary repair networks and in-house parts sourcing help control claim severity and support shop partners.