HAGERTY INC

Company Overview

HAGERTY INC is a specialty MGA and enthusiast-services company focused on collector cars and enthusiast vehicles, underwriting Guaranteed Value policies, selling HDC memberships, and operating a marketplace (live/digital auctions, private sales, financing via Broad Arrow/BAC). The firm insures ~2.6 million vehicles, estimates a U.S. addressable market of ~48 million insurable vehicles, and generates revenue from MGA commissions/fees (~35% of 2024 revenue), reinsurance premiums (~54%) and membership/marketplace fees. Hagerty Re reinsures the bulk of risk (approximately 80% U.S. quota share) and the company emphasizes data/AI underwriting, a proprietary valuation database, and geographic expansion (U.S., Canada, U.K., parts of Europe). Recent financials show premium growth (total written premium +15.1% in 2024), materially higher net income and Adjusted EBITDA, and meaningful marketplace revenue acceleration.

Executive Compensation Practices

Compensation at a specialty P&C MGA like Hagerty is likely tied to underwriting performance and top-line insurance metrics: written premium growth, policy retention (~90%), combined/ loss ratios (Hagerty Re three‑year loss ratio ~44%), and Adjusted EBITDA or net income given recent profitability improvement. Given the business mix, management incentives probably include short‑term cash bonuses linked to underwriting profitability, retention and premium targets, and long‑term equity awards tied to multi‑year reserve development, capital preservation (regulatory capital ratios) and marketplace growth (Broad Arrow inventory/commission metrics). Regulatory and capital constraints—insurance subsidiary dividend limits and reinsurer/fronting arrangements—can affect available distributable cash and therefore the structure/timing of cash bonuses, pushing a greater share into equity, deferred pay or performance‑vested awards. Compensation design also likely reflects operational goals such as SaaS platform delivery, expansion of fronting/underwriting authority, and dependence on a key related‑party carrier (Markel), so contract/bonus metrics may be explicitly tied to carrier relationships and strategic milestones.

Insider Trading Considerations

Insider trading activity at Hagerty can be influenced by strong seasonality (renewal and revenue peaks in Q2–Q3), material catastrophe exposures (H2 catastrophe risk and recent hurricanes/wildfires), and discrete corporate events (e.g., the July 2025 LOI for a Proposed Fronting Arrangement with Markel). Watch for trades around quarterly results, reserve or TRA reversals, and regulatory approvals for fronting arrangements—these items can move perceived risk-adjusted profitability and therefore executive selling or option exercises. Because insurance subsidiaries face dividend and capital restrictions, insiders may prefer equity exercises or planned trading programs (10b5‑1) timed after strong operating quarters or after clarity on capital/distribution capacity; related‑party concentration (Markel driving ~93% of commission revenue) creates event risk that can prompt clustered insider activity around carrier announcements. For traders/researchers, monitor Form 4 filings closely around earnings, catastrophe loss disclosures, reserve re-estimates, and major strategic milestones (fronting approvals, Broad Arrow auction results).