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Overview of Hagerty Inc. (NYSE: HGTY)
Hagerty Inc. is a purpose-driven automotive enthusiast brand that has carved a unique niche in the specialty vehicle insurance and car culture ecosystem. Headquartered in Traverse City, Michigan, the company combines insurance services, membership programs, valuation tools, live events, and digital marketplaces to create a comprehensive platform for car enthusiasts worldwide. With its roots as a niche insurance provider for collector cars, Hagerty has evolved into a global lifestyle brand dedicated to 'saving driving' and fueling car culture for future generations.
Core Business Segments
Hagerty operates across three primary business segments:
- Specialty Vehicle Insurance: Hagerty offers tailored insurance solutions for classic cars, collector vehicles, and other enthusiast automobiles. It partners with leading underwriting carriers to provide policies that meet the unique needs of car collectors and enthusiasts.
- Membership and Community: The Hagerty Drivers Club (HDC) is the world's largest membership organization for car lovers, boasting over 865,000 members. HDC provides exclusive benefits, including roadside assistance, automotive discounts, and access to premium content and events.
- Marketplace and Valuation: Hagerty’s digital marketplace connects buyers and sellers of collectible cars, while its proprietary valuation tools offer data-driven insights into vehicle values, enabling enthusiasts to make informed decisions.
Unique Value Proposition
What sets Hagerty apart is its holistic approach to the automotive enthusiast market. Beyond insurance, the company fosters a sense of community through its events, media content, and membership programs. Signature events like the Greenwich Concours d’Elegance and the Amelia Concours d’Elegance bring car lovers together, while its media arm produces engaging content, including valuation insights, automotive entertainment, and educational resources. The company’s digital tools, such as the Hagerty Valuation Tool, further enhance its value proposition by providing trusted data and market analysis.
Market Position and Industry Context
Hagerty operates within the specialty insurance and automotive lifestyle industries, targeting a growing market of car enthusiasts. With approximately 67 million Americans identifying as car enthusiasts, Hagerty capitalizes on this passion by integrating insurance with cultural and community-driven initiatives. The company's focus on collector and enthusiast vehicles differentiates it from traditional insurance providers, while its commitment to preserving car culture aligns with the values of its customer base.
Revenue Streams and Business Model
Hagerty generates revenue through a diversified business model:
- Insurance Premiums: A significant portion of revenue comes from underwriting and servicing specialty vehicle insurance policies.
- Membership Fees: The Hagerty Drivers Club provides recurring subscription revenue while fostering customer loyalty.
- Marketplace Transactions: Hagerty earns fees from its digital marketplace, which facilitates the buying and selling of collectible vehicles.
This multi-faceted approach allows Hagerty to mitigate risks associated with economic cycles and broaden its revenue base.
Challenges and Competitive Landscape
Hagerty faces challenges from competitors in both the insurance and digital marketplace sectors. Traditional insurers, as well as emerging digital platforms, present competition. Additionally, the company must navigate macroeconomic factors such as inflation, consumer spending trends, and the evolving automotive landscape, including the rise of electric and autonomous vehicles. However, Hagerty’s focus on community, culture, and comprehensive services provides a competitive edge.
Commitment to Purpose
Hagerty’s mission to 'save driving' underscores its commitment to preserving the joy of driving and car ownership. Through initiatives like Hagerty Impact, the company aims to create positive change within the automotive community while promoting sustainability and inclusivity.
Conclusion
Hagerty Inc. is more than an insurance provider; it is a cultural cornerstone for automotive enthusiasts. By integrating insurance, membership, valuation tools, events, and media, Hagerty has created a dynamic ecosystem that resonates with car lovers worldwide. Its unique blend of business acumen and cultural engagement positions it as a leader in the specialty automotive market.
Hagerty, an automotive lifestyle brand and specialty insurance provider, will present at the KBW Insurance Conference on September 8, 2022, at 3:15 p.m. ET. CEO McKeel Hagerty will engage in a fireside chat addressing various industry and company topics. The live webcast can be accessed here, with a replay available for 365 days. Based in Traverse City, Michigan, Hagerty aims to preserve car culture and operates multiple membership programs and insurance services for automotive enthusiasts.
Hagerty (HGTY) has appointed Patrick McClymont as its new Chief Financial Officer, effective September 6, 2022, succeeding Fred Turcotte, who will retire but remain as a senior advisor through 2023. McClymont brings extensive experience from various leadership roles in finance, including past CFO positions at IMAX and Sotheby's. The transition aims to strengthen Hagerty’s financial strategy as it pursues global growth opportunities. CEO McKeel Hagerty acknowledged Turcotte's contributions to the company’s success over the last decade.
Broad Arrow Auctions, a subsidiary of Hagerty (HGTY), achieved remarkable sales of $55.3 million during its inaugural auction at the Monterey Jet Center on August 18. A total of 88 percent of the 93 lots were sold, featuring notable highlights like the 1957 Ferrari 250 GT LWB selling for $5.5 million and the 1995 Ferrari F50 reaching a record price of $5.175 million. The auction was buoyed by a strong turnout and participation from global bidders, showcasing a solid demand in the collectible car market.
Hagerty reported a 23% increase in Total Revenue for Q2 2022, reaching $206.0 million, and a 26% year-to-date growth at $373.8 million. The number of Total Members rose by 9% to 2.5 million. Despite strong revenue growth, the company faced a net loss of $5.5 million, down from $12.5 million in Q2 2021. The acquisition of Broad Arrow Group is set to enhance Hagerty's market position. The company anticipates activating State Farm's agents for classic car policies in 2023, aiming to boost customer engagement.
Hagerty (HGTY) has announced a definitive agreement to acquire the remaining 60% of Broad Arrow Group for $64.8 million in an all-stock deal, expected to close on August 16, 2022. This follows an earlier investment where Hagerty acquired 40% equity in Broad Arrow. The acquisition aims to enhance Hagerty's Marketplace strategy, providing new platforms for buying, selling, and financing collectible cars. Over the last year, Hagerty's members have engaged in transactions worth nearly $12 billion, indicating strong market potential in the collector car segment.
Hagerty (HGTY), a leading specialty insurance provider, has appointed Russell Page as its Chief Data and Information Officer. His responsibilities include overseeing data strategies, technology advancements, and data security. Page aims to enhance Hagerty's data infrastructure and ensure quality data access, which is crucial for the company's growth. With a background in innovation at General Motors and DaRK Capital, he is set to maximize the value of recent tech investments. COO Collette Champagne emphasized the importance of top-notch technology practices to better serve Hagerty's members and drive growth.
Hagerty, Inc. (NYSE: HGTY), a leading specialty insurance provider for automotive enthusiasts, will report its Q2 2022 financial results after market close on August 10, 2022. A conference call to discuss these results will take place at 5:00 pm ET, with a live webcast available on the investor relations website. Interested parties can join via dial-in or access a webcast replay for 90 days afterward. Hagerty aims to preserve car culture through various membership and insurance products.
Hagerty (NYSE: HGTY) has appointed Jay Koval as Senior Vice President of Investor Relations, a new role aimed at enhancing the company's investor engagement. Reporting to CFO Frederick J. Turcotte, Koval will focus on building relationships with the investment community and communicating Hagerty's strategy for value creation. With over 20 years of capital markets experience, Koval previously developed investor relations programs at Brown-Forman and Starwood Hotels and Resorts, significantly increasing their market capitalizations.
The 2022 Greenwich Concours d'Elegance, held from June 3-5 in Greenwich, Connecticut, attracted over 8,000 attendees celebrating car culture. The event featured 140 historically significant vehicles and included activities like the Hagerty Drivers Foundation's unveiling of the 1952 Hudson Hornet.
Highlights included the Cars & Community event showcasing 125 vehicles, and participation from over 600 youth in activities. A significant charity contribution supported local students.
Hagerty, a leading specialty insurance provider focused on automotive enthusiasts, has launched a new digital classifieds platform for Hagerty Drivers Club (HDC) members to buy and sell collectible vehicles. The platform aims to tap into the estimated 43 million insurable vehicles in the U.S., with HDC members recently transacting around 280,000 collector cars valued at $9.5 billion in 2021. The platform offers no listing fees and features a messaging system, attracting nearly 1,000 listings shortly after its launch.
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