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][12] - Net income rose by 11% to $47 million compared to $43 million a year earlier, with adjusted EBITDA increasing by 20% to $64 million [16][17] - Operating margins improved by 70 basis points to 13%, with operating profit reported at $48 million [14][17] Business Line Data and Key Metrics Changes - Earned premium for Hagerty Reinsurance increased by 12% [7] - Membership marketplace and other revenue surged by 68% to $48 million, attributed to higher inventory sales and the launch of the European auction business [7][13] - Commission revenue grew by 11% to $143 million [12][13] Market Data and Key Metrics Changes - The company reported a retention rate of 89%, which is considered industry-leading [12] - The two-year rate of written premium growth during the first half was over 30%, with expectations for mid-teen growth in the second half [12][17] Company Strategy and Development Direction - The company aims to expand specialty insurance offerings, simplify the membership experience, and grow its marketplace business internationally [8][9] - A new fronting arrangement with Markel will allow Hagerty to control 100% of the premium and risk starting in 2026, enhancing profitability and operational control [10][11] - The Enthusiast Plus program was launched to target modern enthusiast vehicles, aiming to capture a larger share of the collectible market [8][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 13% to 14% revenue growth for 2025, driven by strong marketplace gains and written premium growth [17] - The partnership with State Farm is expected to significantly contribute to new business, with plans to expand into 25 states by the end of the year [46][52] - The company sees a long runway for growth, with only 6.7% penetration in its target market of 35 million collectible cars [19] Other Important Information - The company has filled three key positions to strengthen its leadership team, which is expected to contribute to long-term success [84] - 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 [9][29] Q&A Session Summary Question: Marketplace revenue performance and outlook for Q3 and Q4 - Management noted strong private sales and inventory sales in Q2, with upcoming auctions expected to drive incremental growth in the second half [23][27] Question: Incremental technology spending outlook for 2026 - Management clarified that the increased spending is not a one-time expense but necessary for ongoing technology and marketplace initiatives [28][30] Question: Earnings impact from the Markel shift - The transition to 100% quota share is expected to yield significant underwriting profit and investment income, enhancing overall profitability [33][34] Question: Current market dynamics and customer shopping behavior - Management indicated a balanced market with muted growth expectations, but strong quote volume and confidence in new business [37][38] Question: Addressable market for European expansion - Management expressed excitement about the European auction expansion, focusing on high-demand segments and building a strong team [41][44] Question: State Farm integration progress - The integration is progressing well, with new business already operational in 17 states and plans to roll over existing business [46][48] Question: Pricing trends and competition - Management acknowledged soft pricing trends in the collector car market but noted stability in premium rates and competitive dynamics [75][79] Question: Initiatives to increase vehicles per policy - The launch of the Enthusiast Plus program aims to increase acceptance of additional vehicles on policies, potentially raising average premiums [80][82]