Financial Data and Key Metrics Changes - Total revenue increased by 18% to $380 million in Q3 2025, driven by a 16% increase in written premium and 18% growth in commission revenue [12][6] - Net income rose by 143% to $46 million compared to $19 million a year earlier, with adjusted EBITDA increasing by 106% to $50 million [16][12] - Operating margins improved by 590 basis points to 9%, with operating profit reaching $34 million, a 240% increase [13][12] Business Line Data and Key Metrics Changes - Membership, marketplace, and other revenue surged by 34% to $56 million, attributed to the launch of the European auction business and growth in inventory sales [12][6] - Earned premium in Hagerty Reinsurance increased by 12%, while the loss ratio for the quarter was 42%, resulting in a year-to-date combined ratio of 89% [12][16] Market Data and Key Metrics Changes - The company reported the highest policy-in-force (PIF) growth in its history in October, with significant contributions from the conversion of State Farm policies [6][12] - The company has established itself as a leading auction house, with a total global vehicle value sold at Broad Arrow Live Auctions reaching $240 million through November 1st [10][12] Company Strategy and Development Direction - The company aims to expand its specialty insurance offerings, simplify the membership experience, and grow its marketplace business internationally [10][9] - A new partnership with Liberty Mutual and Safeco was announced, which is expected to enhance customer engagement and retention [9][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance, highlighting a strong growth trajectory and the importance of long-term planning in the insurance industry [69][4] - The company expects to achieve 14%-15% revenue growth for the full year, with net income projected to grow by 58%-65% [17][12] Other Important Information - The company is transitioning to a new fronting arrangement with Markel, allowing it to control 100% of the premium and risk starting in 2026 [11][12] - A valuation allowance of $38 million was released, contributing to an income tax benefit [15][12] Q&A Session Summary Question: Can you provide quantification on the Liberty Mutual and Safeco partnership? - Management indicated it represents tens of thousands of customers and is a significant opportunity, although specific details were not disclosed [20][21] Question: What is the expected impact of the Enthusiast Plus rollout on PIF growth? - Management stated it is early days for Enthusiast Plus, and while they are optimistic, specific loss results are not yet available [23][24] Question: What is driving the acceleration in written premium growth? - Management noted that the growth is influenced by the seasonal nature of the business and the ongoing conversion of State Farm policies [26][27] Question: How will the transition to the Markel agreement impact liquidity and asset allocation? - Management confirmed that they have allocated investments into high-grade corporate and government bonds, providing protection against interest rate cuts [40][41] Question: What are the expectations for EBITDA growth in Q4? - Management indicated that Q4 is typically a lighter quarter with tighter margins, but no specific spending increases are planned [54][55] Question: How will the new policy acquisition costs impact earnings? - Management stated that it is still a work in progress and details will be shared once finalized [64][63]

Financial Data and Key Metrics Changes - Total revenue increased by 18% to $369 million, driven by an 11% increase in written premium and a 12% growth in commission revenue [6][13] - Net income rose by 11% to $47 million compared to $43 million a year earlier, with adjusted EBITDA increasing by 20% to $64 million [15][16] - Operating margins improved by 70 basis points to 13%, with a significant increase in operating profit to $48 million [15][16] Business Line Data and Key Metrics Changes - Earned premium for Hagerty Reinsurance increased by 12%, while membership marketplace and other revenue surged by 68% due to higher inventory sales and the launch of the European auction business [6][7] - Mission and fee revenue grew by 11% to $143 million, and earned premium increased by 13% to $178 million [14] Market Data and Key Metrics Changes - The company reported a strong retention rate of 89%, contributing to the growth in written premium [13] - The marketplace revenue showed strong performance, particularly in private sales and inventory sales, which were key drivers for year-to-date revenue [24][25] Company Strategy and Development Direction - The company aims to expand specialty insurance offerings, simplify the membership experience, and grow the marketplace business internationally [8][9] - A new fronting arrangement with Markel will allow the company to control 100% of the premium and risk starting in 2026, enhancing profitability and operational control [12][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 13% to 14% revenue growth for 2025, supported by strong business momentum and the integration with State Farm [18][65] - The company is optimistic about the long-term growth potential, particularly in the collectible car market, where current penetration is only 6.7% [20] Other Important Information - The company has filled key positions with experienced talent to support long-term success, including new hires in distribution, insurance products, and brand marketing [86] - The technology spending is expected to trend down as revenue accelerates in 2026 and 2027, following significant investments in a new cloud-based insurance platform [10][29] Q&A Session Summary Question: Marketplace revenue performance and future trajectory - Management noted strong second-quarter performance in private sales and inventory sales, with expectations for continued growth in the second half due to upcoming auctions [24][25] Question: Incremental technology spending outlook for 2026 - Management clarified that the $20 million in technology spending is not a one-time expense but rather an investment in future revenue generation [28][29] Question: Earnings impact from the Markel shift - The transition to a 100% quota share arrangement is expected to yield significant underwriting profit and investment income, enhancing overall profitability [33][34] Question: Customer shopping behavior and market dynamics - Management indicated a balanced market with muted growth expectations, but strong quote volume and confidence in new business generation [37][38] Question: European expansion and addressable market - The company is optimistic about its European expansion, focusing on high-end auctions and private sales, with plans for a larger auction calendar in the coming years [42][45] Question: State Farm integration progress - The integration is progressing well, with the company live in 17 states and plans to expand to 25 states by the end of the year, focusing on both new business and existing customer rollovers [47][52] Question: Pricing trends and competition - Management acknowledged a stable pricing environment in the collector car niche, with no significant changes in competition dynamics [76][81] Question: Initiatives to increase vehicles per policy - The launch of the Enthusiast Plus program aims to increase the number of vehicles per policy by allowing the company to underwrite more diverse vehicle types [82][84]