Hagerty, Inc. (HGTY) Bundle
A Brief History of Hagerty, Inc.
Company Overview
Hagerty, Inc. is a prominent insurance provider specializing in classic automobiles and related services. As of 2024, the company has experienced significant growth in its premium revenue streams and market presence.
Financial Performance
For the nine months ended September 30, 2024, Hagerty reported the following financial metrics:
| Metric | 2024 (in thousands) | 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Commission and Fee Revenue | $333,817 | $287,972 | 15.9% |
| Earned Premium | $474,917 | $384,498 | 23.5% |
| Net Income | $69,863 | $19,137 | 265.1% |
| Basic Earnings Per Share | $0.09 | $0.04 | 125.0% |
Premium Growth
As of September 30, 2024, Hagerty's earned premium at Hagerty Re was $474.9 million, representing a $90.4 million increase from the previous year. This growth is attributed to the expansion of subject premiums written through the company's MGA subsidiaries.
| Region | Subject Premium (2024) | Subject Premium (2023) | Change (%) |
|---|---|---|---|
| U.S. | $689,745 | $590,205 | 16.8% |
| Canada | $49,192 | $45,320 | 6.2% |
| U.K. | $(156) | $7,713 | -102.0% |
Membership and Marketplace Revenue
Membership, marketplace, and other revenue totaled $99.6 million for the nine months ended September 30, 2024, marking a 20.4% increase compared to the prior year. The breakdown of this revenue includes:
| Type of Revenue | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Membership Fees | $42.4 | $39.5 | 7.2% |
| Marketplace Revenue | $38.3 | $24.8 | 54.2% |
| Other Revenue | $18.8 | $18.3 | 2.9% |
Operating Expenses
Hagerty's total operating expenses for the nine months ended September 30, 2024, amounted to $313.3 million, reflecting a 20.7% increase from $259.5 million in 2023. Key components include:
| Expense Type | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Salaries and Benefits | $161.0 | $160.1 | 0.5% |
| Ceding Commissions, Net | $221.9 | $181.2 | 22.5% |
| Losses and Loss Adjustment Expenses | $226.5 | $159.5 | 42.1% |
Claims and Loss Ratios
The company faced significant claims due to Hurricane Helene, which resulted in estimated losses of $24.7 million. The overall loss ratio for the nine months ended September 30, 2024, was 47.7%, compared to 41.5% in the previous year.
| Metric | 2024 | 2023 |
|---|---|---|
| Loss Ratio (Including Catastrophe Losses) | 47.7% | 41.5% |
| Loss Ratio (Excluding Catastrophe Losses) | 40.6% | 40.0% |
A Who Owns Hagerty, Inc. (HGTY)
Ownership Structure
As of 2024, Hagerty, Inc. (HGTY) operates under a complex ownership structure involving various classes of stock and units within its subsidiary, THG. The ownership percentage of Hagerty, Inc. in THG has changed over time, reflecting various exchanges of units for shares of common stock. The latest data indicates that Hagerty, Inc. holds approximately 26.1% of the total THG units outstanding.
Major Shareholders
The major shareholders of Hagerty, Inc. include institutional investors, retail investors, and insiders. The following table summarizes the ownership distribution among key stakeholders.
| Shareholder Type | Ownership Percentage | Number of Shares/Units |
|---|---|---|
| Hagerty, Inc. (controlling interest) | 26.1% | 89,980,363 THG units |
| Other THG Unit Holders | 73.9% | 255,178,346 THG units |
| Institutional Investors | Approx. 40% | Not disclosed |
| Insider Ownership | Approx. 5% | Not disclosed |
Stock Performance and Financial Data
Hagerty, Inc. has shown significant financial growth in recent quarters. Key financial metrics for the nine months ended September 30, 2024, are as follows:
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Total Revenue | $908.3 million | $755.2 million | 20.2% |
| Net Income | $69.9 million | $19.1 million | 265.1% |
| Earned Premium | $474.9 million | $384.5 million | 23.5% |
| Membership Revenue | $99.6 million | $82.7 million | 20.4% |
Convertible Preferred Stock
Hagerty, Inc. has issued Series A Convertible Preferred Stock, with 8,483,561 shares outstanding as of September 30, 2024. This stock was issued for an aggregate purchase price of $80 million, reflecting a per-share price of $9.43.
Recent Changes in Ownership
Recent transactions have impacted the ownership structure, particularly the exchange of THG units for Class A Common Stock. The following table summarizes the changes in THG unit ownership over recent quarters:
| Period | THG Units Held by Hagerty, Inc. | THG Units Held by Other Unit Holders | Total THG Units Outstanding |
|---|---|---|---|
| September 30, 2024 | 89,980,363 | 255,178,346 | 345,158,709 |
| September 30, 2023 | 84,479,065 | 255,499,164 | 339,978,229 |
Investment and Growth Plans
In 2024, Hagerty, Inc. acquired Consolidated National Insurance Company for $19.3 million, aiming to enhance its underwriting capabilities and expand its product offerings.
Hagerty, Inc. (HGTY) Mission Statement
Mission Overview
Hagerty, Inc. (HGTY) is dedicated to providing unparalleled services and products tailored for automotive enthusiasts. The mission statement emphasizes a commitment to preserving the automotive lifestyle and ensuring that members enjoy their passion for classic and collector vehicles.
Core Values
- Community: Engage and connect automotive enthusiasts.
- Passion: Foster a love for classic and collector vehicles.
- Innovation: Continuously improve and expand service offerings.
- Integrity: Uphold the highest ethical standards in all operations.
Financial Performance
As of September 30, 2024, Hagerty reported robust financial results, showcasing the effectiveness of its mission in driving business growth.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income | $69.9 million | $19.1 million | 265.1% |
| Commission and Fee Revenue | $333.8 million | $288 million | 15.9% |
| Membership Revenue | $41.5 million | $32.6 million | 27.3% |
| Total Revenue | $908.3 million | $755.2 million | 20.2% |
Membership and Growth
The company has focused on increasing membership and enhancing member engagement, which is reflected in the significant growth of the Hagerty Drivers Club (HDC).
| Membership Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| HDC Paid Member Count | 867,596 | 815,007 | 6.5% |
| Policies in Force | 1,494,510 | 1,401,037 | 6.7% |
| Vehicles in Force | 2,553,589 | 2,378,883 | 7.3% |
Operational Efficiency
Hagerty has maintained a strong operational focus, resulting in improved financial ratios and efficiency metrics.
| Operational Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Loss Ratio | 60.0% | 41.1% | 46.0% |
| Adjusted EBITDA | $104.6 million | $78.4 million | 33.4% |
| Basic EPS | $0.09 | $0.04 | 125.0% |
Strategic Initiatives
Hagerty has launched various strategic initiatives aimed at enhancing customer experience and expanding market reach. These initiatives align with the company's mission to create a vibrant community for car enthusiasts.
Conclusion
Hagerty, Inc. continues to execute its mission effectively, as evidenced by its strong financial performance, growing membership base, and commitment to operational excellence.
How Hagerty, Inc. (HGTY) Works
Business Model Overview
Hagerty, Inc. operates primarily in the automotive insurance space, specializing in classic and collector vehicles. The company utilizes a Managing General Agent (MGA) model, allowing it to underwrite and manage insurance policies while partnering with various insurance carriers for risk transfer.
Financial Performance
For the nine months ended September 30, 2024, Hagerty reported total revenue of $908.3 million, marking a 20.3% increase from $755.2 million in the same period of 2023.
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Commission and fee revenue | $333,817 | $287,972 | $45,845 | 15.9% |
| Earned premium | $474,917 | $384,498 | $90,419 | 23.5% |
| Membership, marketplace and other revenue | $99,573 | $82,700 | $16,873 | 20.4% |
| Total revenue | $908,307 | $755,170 | $153,137 | 20.3% |
Insurance Operations
Hagerty's insurance segment is characterized by a focus on high-net-worth individuals and vehicles, with significant growth in both new and renewal policies. The total written premium for the nine months ended September 30, 2024, was $827.1 million, up from $714.3 million in 2023, representing a 15.8% increase.
Claims and Losses
Losses and loss adjustment expenses totaled $226.5 million for the nine months ended September 30, 2024, which is a 42.1% increase from $159.5 million in 2023. The loss ratio for this period was 47.7%, compared to 41.5% in the previous year, influenced by significant claims related to Hurricane Helene.
Membership and Marketplace Revenue
Membership, marketplace, and other revenue reached $99.6 million for the nine months ended September 30, 2024, an increase of 20.4% year-over-year. Membership fee revenue alone accounted for $42.4 million, while marketplace revenue contributed $38.3 million.
| Revenue Breakdown | 2024 (in thousands) | 2023 (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Membership Fees | $42,385 | $39,528 | $2,857 | 7.2% |
| Marketplace Revenue | $38,300 | $24,800 | $13,500 | 54.2% |
| Other Revenue | $18,800 | $18,300 | $500 | 2.9% |
Operational Metrics
As of September 30, 2024, Hagerty reported that it had 1,494,510 policies in force, an increase from 1,401,037 in 2023. The policies in force retention rate was 88.8%.
Cash Flow and Liquidity
Net cash provided by operating activities for the nine months ended September 30, 2024, was $189.6 million, up from $132.2 million in 2023, reflecting a 43.4% increase. The company maintained strong liquidity with total cash and cash equivalents of approximately $100 million.
Debt and Financing Activities
During the nine months ended September 30, 2024, Hagerty utilized available liquidity to reduce outstanding borrowings by $10.5 million and paid a cash dividend of $5.6 million on its Series A Convertible Preferred Stock.
Investment Portfolio
The diversification of Hagerty Re's investment portfolio included the purchase of investment-grade fixed maturity securities. The company reported interest and other income of $27.9 million for the nine months ended September 30, 2024, a significant increase from $15.7 million in 2023.
How Hagerty, Inc. (HGTY) Makes Money
Revenue Streams Overview
Hagerty, Inc. generates revenue primarily through three key streams: earned premiums, commission and fee revenue, and membership, marketplace, and other revenue. As of September 30, 2024, the total revenue amounted to $908.3 million, reflecting a 20.3% increase from $755.2 million in the same period of 2023.
Earned Premiums
For the nine months ended September 30, 2024, earned premiums at Hagerty Re totaled $474.9 million, up from $384.5 million in 2023, marking a 23.5% increase. This growth is attributed to the increase in subject premiums written through the company's Managing General Agent (MGA) subsidiaries.
| Period | Earned Premiums (in millions) | Change ($ million) | % Change |
|---|---|---|---|
| 2024 (9 months) | $474.9 | $90.4 | 23.5% |
| 2023 (9 months) | $384.5 | - | - |
Commission and Fee Revenue
Commission and fee revenue for the nine months ended September 30, 2024, reached $333.8 million, reflecting a 15.9% increase from $288.0 million in 2023. This increase was driven by a $36.9 million rise in revenue from renewal policies and a $9.0 million increase from new policies.
| Period | Commission and Fee Revenue (in millions) | Change ($ million) | % Change |
|---|---|---|---|
| 2024 (9 months) | $333.8 | $45.8 | 15.9% |
| 2023 (9 months) | $288.0 | - | - |
Membership, Marketplace, and Other Revenue
Membership, marketplace, and other revenue amounted to $99.6 million for the nine months ended September 30, 2024, which is a 20.4% increase compared to $82.7 million in 2023. Membership fee revenue specifically was $42.4 million, up 7.2% from 2023.
| Period | Membership, Marketplace, and Other Revenue (in millions) | Change ($ million) | % Change |
|---|---|---|---|
| 2024 (9 months) | $99.6 | $16.9 | 20.4% |
| 2023 (9 months) | $82.7 | - | - |
Operating Expenses
Total operating expenses for the nine months ended September 30, 2024, were $847.9 million, an increase of 14.9% from $738.3 million in 2023. Major components of these expenses included salaries and benefits, ceding commissions, and losses and loss adjustment expenses.
| Expense Type | 2024 (in millions) | 2023 (in millions) | Change ($ million) | % Change |
|---|---|---|---|---|
| Salaries and Benefits | $161.0 | $160.1 | $0.9 | 0.5% |
| Ceding Commissions, Net | $221.9 | $181.2 | $40.7 | 22.5% |
| Losses and Loss Adjustment Expenses | $226.5 | $159.5 | $67.1 | 42.1% |
| Total Operating Expenses | $847.9 | $738.3 | $109.6 | 14.9% |
Profitability Metrics
Hagerty reported a net income of $69.9 million for the nine months ended September 30, 2024, compared to $19.1 million in 2023. This significant increase of 265.1% reflects the robust growth in revenue across all segments of the business.
| Period | Net Income (in millions) | Change ($ million) | % Change |
|---|---|---|---|
| 2024 (9 months) | $69.9 | $50.7 | 265.1% |
| 2023 (9 months) | $19.1 | - | - |
Key Performance Indicators
As of September 30, 2024, Hagerty had 1,494,510 policies in force, with a retention rate of 88.8%. The total number of vehicles insured reached 2,553,589.
| Metric | 2024 | 2023 |
|---|---|---|
| Policies in Force | 1,494,510 | 1,401,037 |
| Policies Retention Rate | 88.8% | 88.7% |
| Vehicles in Force | 2,553,589 | 2,378,883 |
Hagerty, Inc. (HGTY) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Hagerty, Inc. (HGTY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Hagerty, Inc. (HGTY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Hagerty, Inc. (HGTY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.