HGTY · Hagerty, Inc.

Hagerty’s Q1 2026 results reflect a pivotal strategic inflection point—the full implementation of its Markel Fronting Arrangement effective January 1, 2026—under which Hagerty Re assumes 100% of premium and risk for its insurance book. This structural shift explains the stark divergence between strong underlying operational performance and weaker headline GAAP metrics: written premium grew 18% to $289 million and earned premium surged 42% to $240 million, yet total revenue fell 5% to $312 million due to the elimination of $84 million in commission revenue previously recognized from Markel. The $13 million net loss includes $89 million in non-recurring transitional costs tied to amortizing deferred ceding commissions on pre-2026 policies—a one-time, declining expense expected to fall to ~$10 million in Q4 2026. Critically, Adjusted EBITDA jumped 77% to $85 million, confirming management’s assertion that the fronting arrangement enhances long-term profitability by boosting underwriting profits and investment income by 25%. Guidance remains unchanged: 15–16% written premium growth and $236–247 million Adjusted EBITDA for 2026, underscoring confidence in the model’s scalability. Operational drivers include record new policy volume (112,000 added), 89% retention, and Broad Arrow’s record $111 million Amelia auction—evidence of cross-ecosystem momentum. Management explicitly attributes success to trust-based partnerships (e.g., State Farm rollout, nine of top ten insurers) and technology-enabled distribution, positioning Hagerty to compound growth toward its 3 million policy target by 2030.