First quarter 2026 Highlights
-- Completed strategic evolution to assume control of Markel program and
100% of premium post transition to fronting arrangement
-- Strong underlying operational performance with growth in written premiums,
earned premium and members
-- Transition to fronting arrangement resulted in decrease to reported
revenue as previously disclosed
-- Written Premium increased 18% to $289 million
-- Policies in force increased 15% to 1.8 million with a record
112,000 new policies added in the first quarter
-- Earned premium increased 42% to $240 million
-- Net Loss of $13 million, including $89 million of pre-tax Markel Fronting
Arrangement transitional costs, compared to Net Income of $27 million in
the prior year period
-- Adjusted EBITDA (a non-GAAP measure) increased 77% to $85 million,
compared to $48 million in the prior year period
-- Reaffirmed 2026 Outlook for Written Premium growth of 15% to 16%
TRAVERSE CITY, Mich., May 6, 2026 /PRNewswire/ -- Hagerty, Inc. $(HGTY)$ makes it easier and more enjoyable for car enthusiasts to drive and celebrate the vehicles they love -- through specialty vehicle insurance, live and digital auctions, engaging media and events, and the Hagerty Drivers Club, the world's largest membership community of car lovers. Today the company announced financial results for the three months ended March 31, 2026.
"First quarter results and the breadth of momentum across our ecosystem give us increasing confidence in our full year outlook that we reaffirmed today. We delivered 18% written premium growth in the first quarter, ahead of our full year outlook, and earned premium growth of 42% with the January 1, 2026 increase in quota share to 100%. 2026 is performing better than expected economically, even if the financial presentation looks different as we transition to the new Markel Fronting Arrangement. The presentation is different but the business is not, as we delivered another quarter of record growth," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.
"Our business momentum is showing up across the ecosystem - and Broad Arrow is no exception. During the first quarter, Broad Arrow hosted the most successful sale in the 31-year history of Amelia Car Week, delivering $111 million in total sales with a 92% sell-through rate and over 1,000 bidders from 23 countries. Results like this are the product of four decades of building trust, one member and one partner at a time, and they reflect exactly the kind of member-centric company that Hagerty is building for the long-term," added Mr. Hagerty.
FIRST QUARTER 2026 FINANCIAL HIGHLIGHTS
-- First quarter 2026 Written Premium increased 18% year-over-year to $289
million
-- First quarter 2026 Earned Premium increased 42% year-over-year to $240
million, driven by the combination of strong written premium growth and
the January 1, 2026 transition to 100% quota share under the new fronting
arrangement
-- Policies in Force Retention was 88.5% as of March 31, 2026
compared to 89.0% in the prior year period, and policies in force
count increased 15% year-over-year to 1.8 million
-- First quarter 2026 Commission and fee revenue decreased 84%
year-over-year to $16 million, as Markel commission revenue is eliminated
upon consolidation under the new fronting arrangement
-- First quarter 2026 Marketplace revenue decreased 12% year-over-year to
$26 million, with strong year-over-year growth in auction sales at The
Amelia offset by lower inventory sales from the prior year's one-time
sale of vehicles acquired from The Academy of Art University Collection
-- First quarter 2026 Membership and other revenue increased 6%
year-over-year to $22 million
-- Hagerty Drivers Club (HDC) paid members increased 6%
year-over-year to over 940,000
-- First quarter 2026 Net investment income increased 13% year-over-year to
$10 million
-- First quarter 2026 Total Revenue decreased 5% year-over-year to $312
million, reflecting the transition to the Markel Fronting Arrangement
-- First quarter 2026 Loss before taxes of $21 million, including $89
million of Markel Fronting Arrangement transitional costs
-- First quarter 2026 Hagerty Re Loss Ratio was 38.4% compared to 42.0% in
the prior year period, including $6 million of favorable prior accident
year loss development
-- First quarter 2026 Hagerty Re Combined Ratio was 86.5% compared to
88.5% in the prior year period
-- Transition to new fronting arrangement and Article 7 reporting results in
a different classification of certain expenses, impacting the
period-to-period comparability of Policy acquisition costs, net (+$25
million), Underwriting and other insurance expenses (+$58 million), and
Selling, general, and administrative expenses (-$72 million)
-- First quarter 2026 Net Loss of $13 million, including $89 million of
pre-tax Markel Fronting Arrangement transitional costs, compared to Net
Income of $27 million in the prior year period
-- First quarter 2026 Adjusted EBITDA (a non-GAAP measure) increased 77%
year-over-year to $85 million, compared to $48 million in the prior year
period
-- First quarter 2026 Basic and Diluted Loss Per Share were $(0.06);
Adjusted Diluted Loss Per Share (a non-GAAP measure) was $(0.04)
-- The Company had $212 million of unrestricted cash and $229 million of
total debt, $110 million of which was back leverage for Broad Arrow
Capital's portfolio of loans collateralized by collector cars
The definitions and reconciliations of non-GAAP financial measures are provided under the heading Key Performance Indicators and Certain Non-GAAP Financial Measures at the end of this press release.
2026 OUTLOOK - SUSTAINED COMPOUNDING GROWTH
We believe 2026 is on track to be another great year of underlying profit growth for Hagerty as our team executes on our long-term plan to deliver compounding premium growth through investing in our long-term competitive advantages with our member-centric approach. As of January 1, 2026, we moved to a 100% quota share arrangement with our long-term partner, Markel, where we retain 100% of the premium and risk from our high-quality, historically low volatility underwriting. We also remain focused on delivering this growth more efficiently through the benefits of scale, continued cost discipline, and investments in our technology platform.
-- For full year 2026, Hagerty anticipates:
-- Written Premium growth of 15% to 16%
-- Total Revenue change of (12)% to (11)%, as Markel-related
commission revenue is eliminated under the Markel Fronting
Arrangement1
-- Net Loss of $(51) million to $(41) million, including $190
million of Markel Fronting Arrangement transitional costs2
-- Adjusted EBITDA of $236 million to $247 million
2026 Outlook ($) 2026 Outlook (%)
2025
in thousands Results Low End High End Low End High End
------------- ----------- ---------- ---------- -------- --------
Total Written
Premium $1,193,548 $1,373,000 $1,385,000 15 % 16 %
Total
Revenue(1) $1,456,389 $1,280,000 $1,300,000 (12) % (11) %
Net Income
(Loss)(2,
3) $149,225 $(51,000) $(41,000) N/M N/M
Adjusted
EBITDA(4) $236,791 $236,000 $247,000 -- % 4 %
---------- ---------- -------- --------
(1) Revenue guidance reflects the accounting impact of the Markel Fronting
Arrangement. Beginning in 2026, we now control the Essentia book of
business with the benefit of our MGA services received by Hagerty Re and
not Essentia. As a result, commission revenue and the associated ceding
commission expense for policies issued through the Markel Fronting
Arrangement are now eliminated in consolidation. Although we expect the
arrangement to result in increased profitability (as reflected in
Adjusted EBITDA), reported commission revenue and ceding commission
expense will be significantly lower than prior periods, affecting
period-to-period comparability. 2025 commission revenue associated with
our alliance agreement with Markel was $437 million and ceding commission
expense related to the Company's reinsurance quota share agreement with
Markel was $344 million in 2025.
(2) The projected Net Loss includes approximately $190 million of pre-tax
transitional costs related to the Markel Fronting Arrangement
representing deferred ceding commissions paid to Markel for policies
written prior to January 1, 2026, which will be fully amortized ratably
over the remaining term of those policies throughout 2026. This
amortization will decline from $89 million in Q1 2026 to approximately
$10 million in Q4 2026 as 2025 policies expire. Excluding these
transitional costs, we expect 2026 to reflect underlying profitability
improvement.
(3) Full year 2025 Net Income includes (i) the benefit from the $42 million
release of a portion of our valuation allowance, partially offset by a
$32 million loss related to the change in value of the TRA liability; and
(ii) a $21 million reduction in reserves in the fourth quarter, primarily
related to favorable development for the 2024 accident year and
improvement in current accident year experience.
(4) See Non-GAAP Financial Measures below for additional information
regarding this non-GAAP financial measure.
N/M = Not meaningful
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