Hagerty Raises Outlook as Premium Growth Accelerates
The company lifted its 2026 adjusted EBITDA forecast to $270 million-$280 million.
Hagerty Inc. (HGTY), the specialty automotive insurer, raised its 2026 forecasts after second-quarter written premium increased 19.2% from a year earlier to $424.5 million. Policies in force rose 19.0% to 1.86 million, while new insurance business climbed 90.0%.
The quarter reflected the shift to a new fronting arrangement with Markel, which increased Hagerty Re’s U.S. quota share to 100% from 80%. The change boosted earned premium while eliminating commission revenue in consolidation, widening the gap between the growth of the insurance business and reported revenue.
Revenue declined 6.5% to $354.8 million, even as earned premium rose 41.7% to $252.0 million. Net income fell 83.0% to $8.0 million, including $64.1 million of Markel transition costs, while adjusted EBITDA increased 2.6% to $74.5 million. The company didn’t provide an earnings-per-share figure in the results.
Written premium accelerated sharply from the first quarter’s implied $288.5 million level. Hagerty Drivers Club paid membership grew 5.9% to 961,929, and vehicles in force increased 13.8% to 3.03 million, though policy retention slipped half a percentage point to 88.2%.
Marketplace revenue rose 47.5% to $39.7 million as live-auction sales and financing revenue increased. Aggregate auction sales more than doubled to $104.4 million, while private sales fell 61.5% to $44.1 million. Broad Arrow Capital’s average loan portfolio expanded 80.2% to $146.4 million.
Hagerty Re’s second-quarter combined ratio held at 89.6% despite a 0.4-percentage-point increase in the loss ratio to 42.7%. For the first half, the combined ratio improved to 88.1% from 89.1%, and operating cash flow rose 91% to $186.2 million.
Hagerty now expects 2026 revenue of $1.325 billion to $1.340 billion and written premium of $1.385 billion to $1.397 billion. The revenue outlook still represents an 8% to 9% decline because of eliminated Markel-related commission revenue, while the written-premium range implies growth of 16% to 17%. The company also expects net income of $18 million to $30 million, replacing its previous forecast for a loss.
Markel transition costs declined from $89 million in the first quarter and are expected to fall to about $37 million in the third quarter and $9 million in the fourth. That step-down underpinned the improved profit outlook after $153.1 million of transition costs pushed the first half to a $4.7 million net loss.