Hagerty, Inc. reported a significant decline in financial performance for the first quarter of 2026, with a net loss of $12.7 million compared to a net income of $27.3 million in the same period of 2025. Total revenue decreased by 5% to $311.8 million, down from $328.3 million year-over-year. The decline was primarily attributed to a substantial drop in commission and fee revenue, which fell by 83.6% to $16.4 million, reflecting changes in the company's business model following the implementation of the Markel Fronting Arrangement effective January 1, 2026. This arrangement shifted the recognition of commission revenue from Hagerty to Hagerty Re, resulting in a decrease in reported revenue.
In contrast, earned premium, net increased by 41.5% to $239.6 million, driven by the company's increased quota share percentage from 80% to 100% under the Markel Fronting Arrangement. The company also reported a rise in losses and loss adjustment expenses, which totaled $97.9 million, a 37.7% increase compared to the previous year. This increase was linked to the expanded risk assumed under the new arrangement. The Hagerty Re loss ratio improved slightly to 38.4% from 42.0% in the prior year, indicating better loss experience.
Operationally, Hagerty's policies in force grew by 4.5% to 1.76 million, and the number of new insurance policies written surged by 102.3% to 111,896. The Hagerty Drivers Club (HDC) paid member count also increased by 1.1% to 940,313, reflecting the company's ongoing efforts to enhance its membership offerings. However, the marketplace segment experienced a decline in revenue, with total marketplace revenue falling by 11.5% to $25.9 million, primarily due to lower inventory sales compared to the previous year.
Looking ahead, Hagerty's management expressed optimism regarding the potential benefits of the Markel Fronting Arrangement, which is expected to enhance operational efficiencies and profitability in the long term. The company anticipates that the transition will stabilize its revenue streams and improve its competitive position in the collector car insurance market. However, management also acknowledged the challenges posed by the current economic environment and the need to navigate ongoing market conditions effectively.
About Hagerty, Inc.
Hagerty, Inc. is a leader in providing insurance, memberships, and marketplace services for collector cars and enthusiast vehicles. Its core offerings include "Guaranteed Value" insurance policies, HDC memberships, and a trusted marketplace for buying, selling, and financing collector cars. The company leverages community engagement, proprietary data, and strategic partnerships to serve automotive enthusiasts globally, fostering loyalty and recurring revenue through an ecosystem of specialized products and services.
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