Hagerty (HGTY) KBW Insurance Conference 2025 summary

Business model and growth strategy

• Focuses on insuring special and collectible vehicles, leveraging owners' emotional attachment and care for their cars to drive favorable risk dynamics.

• Employs an omnichannel distribution model: direct-to-consumer, agents/brokers, and exclusive partnerships with major insurers like State Farm.

• Expanded into the automotive trade by acquiring an auction company and launching a digital marketplace, complementing the insurance business.

• Media presence includes a high-circulation magazine and a YouTube channel with 3.5 million subscribers, enhancing brand engagement.

• Membership model fosters customer loyalty, positioning clients as members rather than just policyholders.

Insurance operations and risk management

• Historically operated as an MGA, gradually increasing risk retention, now moving to 100% risk retention from 2026 via a fronting arrangement with Markel.

• Loss ratios are stable and low due to low claim frequency and high customer retention, with business relatively immune to economic cycles and tariffs.

• Premiums for vintage cars are generally lower than for regular cars, offering value and a differentiated service experience.

• New Enthusiast+ program allows underwriting of newer collectible cars, targeting younger demographics and expanding the addressable market.

• Technology investments, including a new Duck Creek platform, aim to improve efficiency and support growth.

Strategic partnerships and expansion

• State Farm partnership is a major growth driver, with a planned roll-in of 525,000 vehicles, representing a significant increase in policy count.

• State Farm relationship is commission-driven (MGA model) with no risk retention, and is unique in the industry.

• Partnerships extend to nearly all top U.S. auto insurers, with ongoing efforts to add more regional and national partners.

• International expansion focuses on auctions and events as entry points, especially in Europe, before launching insurance products.

• Auction business, while smaller than insurance, is profitable and growing, with both live and digital formats contributing to the ecosystem.