Hagerty (NYSE:HGTY) reported third-quarter results marked by continued written-premium growth, improved underwriting performance and a higher full-year profit outlook, while management pointed to expansion opportunities through distribution partnerships, auctions and international operations.
Chief Executive Officer and Chairman McKeel Hagerty said the company’s written premium rose 18% in the first nine months of 2026, while adjusted EBITDA increased 43% to $257 million. Net income for the nine-month period was $32 million. The profit measures benefited from $32 million of lower estimated losses, he said.
For the third quarter, Chief Financial Officer Patrick McClymont said written premium increased 16%. The growth was driven by policy count rather than pricing, as Hagerty added members attracted to its insurance offering. The company has 1.9 million policies in force, according to McClymont.
Profit outlook raised as loss experience improves
Hagerty increased its 2026 outlook, now expecting written-premium growth at the high end of its prior 16% to 17% range. The company raised its forecast for GAAP net income to $48 million to $60 million and adjusted EBITDA to $305 million to $315 million.
McClymont said the higher adjusted EBITDA outlook reflected a $26 million reduction in estimated current accident-year losses recorded during the third quarter, as well as operational strength and cost discipline. He said $26 million of the approximately $35 million increase in the midpoint of the adjusted EBITDA forecast was attributable to the loss release, with the remainder coming from the underlying business and operating leverage.
Hagerty Re’s combined ratio was 85.2% during the first nine months. The company’s $32 million of favorable loss development included the third-quarter current accident-year reduction and $6 million of favorable development on 2025 accident-year losses recorded in the first quarter.
Management attributed the improved claims experience to lower physical-damage costs, liability claims running below estimates, investments in claims operations and favorable industry frequency trends. Hagerty said it has expanded its claims team by about 40% over the past two years, including doubling its Material Damage and Special Investigation Units.
McKeel Hagerty said lower driving frequency has aided liability results. He also said the company has directed modest rate increases toward liability lines, while investing in claims handling and fraud detection.
Third-quarter adjusted EBITDA was $97 million. GAAP net income was $36 million, while net income attributable to Class A common shareholders was $8 million. Basic and diluted GAAP earnings per share were both $0.08, and adjusted earnings per share were $0.10 based on 361 million fully diluted shares.
The company cautioned that 2026 adjusted EBITDA includes a $52 million benefit from capitalizing MGA acquisition costs. McClymont said the timing benefit was largely complete as of Sept. 30 and will not recur in 2027, meaning investors should treat it as a one-time tailwind when comparing 2026 with next year.
Revenue mix changes under new fronting structure
Year-to-date GAAP revenue declined 7% to $1 billion despite 18% written-premium growth. McClymont said the decline reflects the company’s Markel fronting transition, under which MGA commission revenue and associated ceding commission expense are eliminated in consolidation.
Third-quarter earned premium rose 42% to $265 million, reflecting written-premium growth and an increase in Hagerty’s quota share to 100%. Commission and fee revenue totaled $22 million and is expected to ramp as State Farm conversions proceed.
Marketplace revenue declined 6% to $32 million. Auction revenue grew 65%, but lower sales of company-owned vehicle inventory offset that growth. McClymont noted that when Hagerty sells cars from its own inventory, it records the full sale price as revenue and the cost of the vehicle as expense, which can create revenue variability depending on inventory sales. Marketplace’s net loss improved by $3 million year over year.
Membership and other revenue totaled $22 million, including 6% growth in paid Hagerty Drivers Club memberships. Net investment income was $13 million, supported by the larger Hagerty Re portfolio and returns from predominantly fixed-income investments.
Distribution, retention and international expansion
McKeel Hagerty said the company remains on track to reach 3 million policies in force by 2030. Its distribution network includes large insurance-carrier partnerships and 54,000 independent agents. State Farm Classic+ policies are now being sold by captive agents in 41 states, and conversion of State Farm’s existing Classic book of 525,000 policies was underway in 26 states at quarter-end.
Management said retention remains consistent with historical levels, with McKeel Hagerty citing 88% retention and a Net Promoter Score roughly double the industry. McClymont said policy growth can vary based on seasonal factors and the timing of State Farm rollouts. The company expects new-business activity to be strongest in the second and third quarters, while the first and fourth quarters are typically quieter.
On Oct. 8, Hagerty closed its acquisition of Bennetts, the second-largest specialty motorcycle insurance broker in the United Kingdom. McKeel Hagerty described the acquisition as modest in size but strategically important, giving the company a base in Europe alongside Broad Arrow’s growing presence there.
The company had $461 million of unrestricted cash and $247 million in total debt as of Sept. 30. McClymont said the cash balance partly reflected timing, as Hagerty was in the process of moving capital into investments, primarily credit investments further down the credit curve than its historical portfolio.
Broad Arrow and collector-market activity
Broad Arrow’s year-to-date auction sales rose 83%, driven primarily by market-share gains since its launch five years ago, McKeel Hagerty said. The company views auctions as both a marketplace business and a customer-acquisition channel that can introduce buyers and sellers to Hagerty insurance, membership and events.
McKeel Hagerty said collector-car values had moved higher in 2026, particularly at the high end of the market. Total Monterey auction sales across all auction houses reached a record $756 million in August, up 75% from the prior year, with modern supercars and hypercars accounting for half of sales.
However, management said it would be prudent not to assume the sharp rise in high-end valuations will continue unchanged. McClymont said the company is completing its 2027 planning process and will provide guidance on its fourth-quarter call.
Management also discussed investments in technology and artificial intelligence, including AI-assisted call summaries and workflow automation. McClymont said the member service center now requires one full-time employee for every 2,800 policies in force, representing a 20% year-over-year productivity improvement. McKeel Hagerty said the company has not yet seen meaningful changes in customer shopping behavior from AI, but is designing future quoting and servicing systems to accommodate it.
About Hagerty (NYSE:HGTY)
Hagerty, Inc is an automotive lifestyle and insurance company focused on enthusiasts and owners of classic, collector and specialty vehicles. The company provides insurance brokerage and related services designed for collector vehicles, with coverage generally underwritten by third-party insurance carriers.
In addition to insurance, Hagerty offers vehicle valuation and pricing information, membership programs, editorial content, events and enthusiast-focused digital services. Its offerings include Hagerty Drivers Club, Hagerty Valuations and Hagerty Marketplace, which connects buyers and sellers of collectible vehicles.
