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]

Financial Data and Key Metrics Changes - Total revenue increased by 18% to $320 million in Q1 2025, driven by a 12% increase in written premium and a 13% growth in commission revenue [6][12] - Net income rose by 233% to $27 million compared to $8 million a year earlier, with adjusted EBITDA growing by 45% to $40 million [7][16] - Operating margin improved by 360 basis points to 8%, reflecting strong operational performance [14] Business Line Data and Key Metrics Changes - Membership marketplace and other revenue surged by 60% to $50 million, supported by successful auctions [6][13] - Earned premium from the risk-taking entity, AgriLife Reinsurance, increased by 12% [6][12] - The MGA membership and marketplace businesses accounted for nearly half of total revenue, with rapidly expanding margins [14] Market Data and Key Metrics Changes - The company operates primarily in the U.S., with over 90% of revenue generated domestically, providing a buffer against tariff-related impacts [10] - The company reported a loss ratio of 42%, which includes $10 million in losses from Southern California wildfires [12][16] Company Strategy and Development Direction - The strategic priorities for 2025 focus on expanding specialty insurance offerings, simplifying the membership experience, and expanding the marketplace business internationally [7][8] - The company is investing in technology transformation, including a transition to a cloud-based insurance platform, which is expected to enhance efficiency and scalability [9][15] - The company aims to double its policies in force to 3 million by 2030, positioning itself for long-term growth [7][67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering high rates of profitable growth, despite potential market volatility [11] - The company reaffirmed its 2025 guidance, expecting top-line revenue growth of 12% to 13% and net income growth of 30% to 40% [17] - Management noted that while the start of 2025 was solid, growth is anticipated to accelerate in the second half of the year, particularly with State Farm partnerships [41] Other Important Information - The company ended the quarter with $128 million in cash and $147 million in total debt, including $32 million in back leverage for loans collateralized by collectible cars [16] - The company is preparing for significant upcoming auctions, including a partnership with BMW at the Villa D'Este Concorso in Italy [8][66] Q&A Session Summary Question: Can you provide an update on the relative margins generated from marketplace revenues? - Management indicated that the live auction business significantly contributed to profitability, with contribution profit margins around 30% to 35% [20][23] Question: What was the impact of catastrophes on the loss ratio? - Management explained that the loss ratio includes catastrophe losses, but without them, the loss ratio would be in the mid-30s, which is typical for the first quarter [25][27] Question: How are tariffs impacting the business? - Management stated that tariffs are not expected to have a direct impact on the business, with anticipated effects being muted due to the nature of the vehicles insured [30][34] Question: What has been observed regarding shopping behavior recently? - Management noted strong shopping activity industry-wide, although growth was slightly slower than anticipated due to various factors, including weather and large events [35][41] Question: Can you provide visibility on membership and marketplace revenue growth for the full year? - Management affirmed guidance for the entire business, indicating a good start to live auctions and upcoming events that are expected to contribute positively [44][45] Question: What is the status of the Duck Creek technology spending? - Management clarified that the technology spending is ongoing and will not be a one-time expense, as it supports future growth and efficiency [52][56]

Investor Presentation Q1 2025 SPEAKERS: McKeel Hagerty | Chief Executive Officer and Chairman Patrick McClymont | Chief Financial Officer FORWARD LOOKING STATEMENTS / NON-GAAP FINANCIAL MEASURES This presentation contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements we provide, other than statements of historical fact, are forward-looking statements, including those regarding our future operating results and financial position, our ...