Hagerty, a prominent automotive lifestyle and insurance enterprise, recently announced its robust performance for the first quarter of 2026. The company experienced a remarkable surge in written premiums and adjusted EBITDA, showcasing its strong operational health. Despite a reported decline in GAAP revenue, attributed to specific accounting adjustments related to a new reinsurance framework, Hagerty's leadership remains optimistic, reaffirming its full-year financial projections. This positive outlook is fueled by a consistent increase in new policy acquisitions, successful strategic collaborations, and impressive results from its auction segments, all pointing towards a trajectory of sustained expansion.
Hagerty's Stellar Q1 2026 Performance Driven by Strategic Growth and Market Dominance
In the initial quarter of 2026, Hagerty, under the leadership of CEO McKeel Hagerty, marked a period of exceptional growth, demonstrating its strongest first-quarter results to date. Written premiums soared by 18% year-over-year, reaching an impressive $289 million, surpassing the company's annual growth expectations. This robust performance is primarily attributed to a record-breaking influx of 112,000 new policies, a significant achievement, especially considering the quarter's typically slower seasonal trends. This consistent upward trajectory reflects the company's thirteenth consecutive quarter of executing its growth strategy effectively.
Chief Financial Officer Patrick McClymont highlighted that earned premiums also saw a substantial increase of 42%, totaling $240 million. This was bolstered by Hagerty Re's assumption of 100% underwriting risk for the company's U.S. business book starting January 1st. Policy retention remained exceptionally high at 89%, a figure McClymont proudly noted as an industry benchmark. The company's growth strategy emphasized expanding its customer base through new policy acquisitions rather than relying on rate adjustments, setting it apart from broader trends in standard auto insurance markets.
Despite these operational triumphs, Hagerty faced a 5% decrease in GAAP revenue, resulting in a net loss of $13 million. This discrepancy between strong operational performance and GAAP results was explained by accounting changes stemming from a new fronting agreement with Markel. McClymont clarified that certain MGA commission revenues and associated ceding commission expenses, previously reported gross, now net out in consolidation, impacting the reported revenue figures. Additionally, $89 million in deferred ceding commission amortization costs from pre-2026 policies contributed to the loss, with these costs expected to diminish to zero by the close of 2026.
Strategic partnerships, particularly with State Farm, proved instrumental in driving policy growth. McKeel Hagerty announced that the State Farm Classic+ program is projected to involve 19,000 agents in 40 states by year-end, actively selling new business. The conversion of State Farm's 525,000 existing collector car policies to Hagerty's platform is also progressing as planned, with most conversions anticipated by the end of 2027. The independent agency channel, boasting 50,000 agents, represents another significant growth area, with Hagerty investing in advanced tools for streamlined processing and automated systems to assist agents in identifying enthusiast vehicles within their portfolios.
Hagerty's marketplace segment, particularly Broad Arrow Auctions, reported stellar results. A two-day sale at Amelia Car Week in Jacksonville, Florida, generated a record $111 million in sales, marking a 50% increase over previous Amelia auctions. The event achieved a 92% sell-through rate and established 12 new pricing records, with a 2003 Ferrari Enzo fetching over $15 million. While marketplace revenue saw a 12% decline to $26 million due to lower inventory sales compared to a unique prior-year event, the success of the Amelia auction underscores the strong demand for modern enthusiast vehicles. Upcoming events, such as the Porsche Air|Water auction and the Concorso d’Eleganza Villa d’Este in Italy, are set to further bolster the company’s auction presence.
Looking ahead, Hagerty reaffirmed its full-year 2026 guidance, projecting written premium growth of 15% to 16%, adjusted EBITDA between $236 million and $247 million, and a GAAP net loss of $41 million to $51 million. McClymont indicated that the company is trending towards the higher end of these projections. He cautioned against annualizing first-quarter adjusted EBITDA, emphasizing the seasonal nature of the business and planned investments in personnel, technology, claims capabilities, B2B distribution, Broad Arrow, and its digital marketplace throughout the year. For 2027, Hagerty anticipates a return to a more normalized income statement post-accounting transition, with revenue growth aligning closely with written premium growth, and continued investment in long-term member expansion. The quarter concluded with a healthy financial position, including $212 million in unrestricted cash, over $1.1 billion in total investments, and $229 million in total debt.
Hagerty's latest earnings call reveals a company deftly navigating accounting complexities while demonstrating impressive underlying business growth. Their focus on expanding policy count through strategic partnerships and excelling in the enthusiast vehicle market positions them for continued success. The emphasis on sustained investment in various growth drivers, from agent tools to digital platforms, highlights a forward-thinking approach that prioritizes long-term value creation. It's a clear signal that Hagerty understands the unique needs of its niche market and is committed to reinforcing its leadership within the automotive lifestyle and insurance sector.