8-K: Hagerty Reports Strong Q1 2026 Results, Reaffirms Outlook

Hagerty, Inc. announced robust first quarter 2026 financial results, showcasing significant written premium growth and improved Adjusted EBITDA, while reaffirming its full-year financial outlook.

Summary

• Hagerty, Inc. reported its financial results for the first quarter ended March 31, 2026.
• The company experienced strong growth in written premiums, up 18% to $289 million, and earned premiums, up 42% to $240 million.
• Policies in force increased by 15% to 1.8 million, with a record 112,000 new policies added in the quarter.
• Adjusted EBITDA saw a substantial increase of 77% to $85 million, compared to $48 million in the prior year period.
• The company reaffirmed its full-year 2026 outlook for written premium growth of 15% to 16%.
• The transition to a 100% quota share under the new Markel Fronting Arrangement was completed on January 1, 2026, which impacts reported revenue but is expected to boost underwriting profits and investment income.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, with strong operational growth metrics and reaffirmed guidance, despite the expected impact of transitional costs on reported net income.

Positives

• Written premium growth of 18% to $289 million.
• Earned premium increased by 42% to $240 million.
• Policies in force grew by 15% to 1.8 million, with a record 112,000 new policies added.
• Adjusted EBITDA increased by 77% to $85 million.
• The Amelia auction sale achieved a record $111 million in total sales with a 92% sell-through rate.
• Hagerty Re combined ratio improved to 86.5% from 88.5% in the prior year.

Negatives

• Reported total revenue decreased by 5% to $312 million, primarily due to the accounting impact of the Markel Fronting Arrangement.
• The company reported a Net Loss of $13 million, compared to a Net Income of $27 million in the prior year, largely due to $89 million in pre-tax Markel Fronting Arrangement transitional costs.
• Commission and fee revenue decreased by 84% to $16 million due to the Markel Fronting Arrangement.
• Marketplace revenue decreased by 12% to $26 million, offset by strong auction sales at The Amelia.

Risks

• Potential for increased underwriting volatility, catastrophes, and reinsurance counterparty risk due to the shift to Hagerty Re assuming 100% of the risk.
• Managing legal, compliance, and regulatory risks associated with the new fronting arrangement.
• Potential for unexpected increases in the frequency or severity of claims, including catastrophe losses.
• Macroeconomic conditions, including inflation, interest rates, and potential recessionary pressures, could impact the insurance business.
• Risks associated with disruptions, interruptions, outages, or other issues with technology platforms or third-party services.

Future Outlook

Hagerty reaffirms its 2026 outlook for written premium growth of 15% to 16%. The company anticipates a total revenue change of (12)% to (11)% due to the Markel Fronting Arrangement. Projected Net Loss for the full year is between $(51) million and $(41) million, including approximately $190 million of transitional costs. Adjusted EBITDA is projected to be between $236 million and $247 million.

Management Comments

• "First quarter results and the breadth of momentum across our ecosystem give us increasing confidence in our full year outlook that we reaffirmed today."
• "2026 is performing better than expected economically, even if the financial presentation looks different as we transition to the new Markel Fronting Arrangement. The presentation is different but the business is not, as we delivered another quarter of record growth."
• "Our business momentum is showing up across the ecosystem - and Broad Arrow is no exception."
• "Results like this are the product of four decades of building trust, one member and one partner at a time, and they reflect exactly the kind of member-centric company that Hagerty is building for the long-term."

Industry Context

StockSavvy.ai notes that Hagerty's Q1 2026 results demonstrate continued strength in the specialty vehicle insurance market, driven by strategic partnerships and a growing enthusiast base. The company's focus on controlling premiums and expanding its ecosystem, including auctions and events, positions it to capitalize on the niche market's growth.

Comparison to Industry Standards

• Hagerty's U.S. Auto Written Premium CAGR of 13% significantly outpaces the Industry Top 100 CAGR of 5% from 2010-2025.
• Hagerty's U.S. Auto Loss Ratio averaged 39%, substantially lower than the Industry Top 100 average of 68% over the same period.

Stakeholder Impact

• Shareholders: The company reaffirms its growth outlook, with strong underlying operational performance, though reported net loss is impacted by transitional costs.
• Members: Continued investment in member-centric approach and claims handling expertise aims to enhance member experience.
• Partners: Expansion of strategic partnerships, such as with State Farm, is a key growth driver.

Next Steps

• Continue to implement the Markel Fronting Arrangement with 100% quota share.
• Accelerate insurance growth with the State Farm rollout.
• Leverage technology to enhance agent distribution and accelerate B2B efforts.
• Further invest in claims handling expertise.
• Refine Hagerty Drivers Club value proposition.
• Invest in technology and Duck Creek implementation.

Key Dates

Recommendation

The company demonstrates strong operational growth and reaffirms its outlook, but the significant transitional costs impacting net income and the accounting changes from the Markel Fronting Arrangement warrant a cautious 'hold' until the full impact of the new structure is clearer and the transitional costs subside.

Keywords

Hagerty, Q1 2026, Financial Results, Insurance, Specialty Vehicles, Adjusted EBITDA, Written Premium, Markel Fronting Arrangement