Hagerty Reports First Quarter 2026 Results; Reaffirms 2026 Growth Outlook

First quarter 2026 HighlightsCompleted strategic evolution to assume control of Markel program and 100% of premium post transition to fronting arrangement Strong underlying operational performance with growth in written premiums, earned premium and members Transition to fronting arrangement resulted in decrease to reported revenue as previously disclosed Written Premium increased 18% to $289 million Policies in force increased 15% to 1.8 million with a record 112,000 new policies added in the first quarter Earned premium increased 42% to $240 million Net Loss of $13 million, including $89 million of pre-tax Markel Fronting Arrangement transitional costs, compared to Net Income of $27 million in the prior year period Adjusted EBITDA (a non-GAAP measure) increased 77% to $85 million, compared to $48 million in the prior year period Reaffirmed 2026 Outlook for Written Premium growth of 15% to 16%Hagerty, Inc. (NYSE: HGTY) makes it easier and more enjoyable for car enthusiasts to drive and celebrate the vehicles they love — through specialty vehicle insurance, live and digital auctions, engaging media and events, and the Hagerty Drivers Club, the world's largest membership community of car lovers. Today the company announced financial results for the three months ended March 31, 2026."First quarter results and the breadth of momentum across our ecosystem give us increasing confidence in our full year outlook that we reaffirmed today. We delivered 18% written premium growth in the first quarter, ahead of our full year outlook, and earned premium growth of 42% with the January 1, 2026 increase in quota share to 100%. 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," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty."Our business momentum is showing up across the ecosystem - and Broad Arrow is no exception. During the first quarter, Broad Arrow hosted the most successful sale in the 31-year history of Amelia Car Week, delivering $111 million in total sales with a 92% sell-through rate and over 1,000 bidders from 23 countries. 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," added Mr. Hagerty.First quarter 2026 Written Premium increased 18% year-over-year to $289 million First quarter 2026 Earned Premium increased 42% year-over-year to $240 million, driven by the combination of strong written premium growth and the January 1, 2026 transition to 100% quota share under the new fronting arrangement Policies in Force Retention was 88.5% as of March 31, 2026 compared to 89.0% in the prior year period, and policies in force count increased 15% year-over-year to 1.8 million First quarter 2026 Commission and fee revenue decreased 84% year-over-year to $16 million, as Markel commission revenue is eliminated upon consolidation under the new fronting arrangement First quarter 2026 Marketplace revenue decreased 12% year-over-year to $26 million, with strong year-over-year growth in auction sales at The Amelia offset by lower inventory sales from the prior year's one-time sale of vehicles acquired from The Academy of Art University Collection First quarter 2026 Membership and other revenue increased 6% year-over-year to $22 million Hagerty Drivers Club (HDC) paid members increased 6% year-over-year to over 940,000 First quarter 2026 Net investment income increased 13% year-over-year to $10 million First quarter 2026 Total Revenue decreased 5% year-over-year to $312 million, reflecting the transition to the Markel Fronting Arrangement First quarter 2026 Loss before taxes of $21 million, including $89 million of Markel Fronting Arrangement transitional costs First quarter 2026 Hagerty Re Loss Ratio was 38.4% compared to 42.0% in the prior year period, including $6 million of favorable prior accident year loss development First quarter 2026 Hagerty Re Combined Ratio was 86.5% compared to 88.5% in the prior year period Transition to new fronting arrangement and Article 7 reporting results in a different classification of certain expenses, impacting the period-to-period comparability of Policy acquisition costs, net (+$25 million), Underwriting and other insurance expenses (+$58 million), and Selling, general, and administrative expenses (-$72 million) First quarter 2026 Net Loss of $13 million, including $89 million of pre-tax Markel Fronting Arrangement transitional costs, compared to Net Income of $27 million in the prior year period First quarter 2026 Adjusted EBITDA (a non-GAAP measure) increased 77% year-over-year to $85 million, compared to $48 million in the prior year period First quarter 2026 Basic and Diluted Loss Per Share were $(0.06); Adjusted Diluted Loss Per Share (a non-GAAP measure) was $(0.04) The Company had $212 million of unrestricted cash and $229 million of total debt, $110 million of which was back leverage for Broad Arrow Capital's portfolio of loans collateralized by collector carsThe definitions and reconciliations of non-GAAP financial measures are provided under the heading Key Performance Indicators and Certain Non-GAAP Financial Measures at the end of this press release.We believe 2026 is on track to be another great year of underlying profit growth for Hagerty as our team executes on our long-term plan to deliver compounding premium growth through investing in our long-term competitive advantages with our member-centric approach. As of January 1, 2026, we moved to a 100% quota share arrangement with our long-term partner, Markel, where we retain 100% of the premium and risk from our high-quality, historically low volatility underwriting. We also remain focused on delivering this growth more efficiently through the benefits of scale, continued cost discipline, and investments in our technology platform. For full year 2026, Hagerty anticipates: Written Premium growth of 15% to 16% Total Revenue change of (12)% to (11)%, as Markel-related commission revenue is eliminated under the Markel Fronting Arrangement1 Net Loss of $(51) million to $(41) million, including ~$190 million of Markel Fronting Arrangement transitional costs2 Adjusted EBITDA of $236 million to $247 million 2026 Outlook ($) 2026 Outlook (%) in thousands 2025 Results Low End High End Low End High End Total Written Premium $1,193,548 $1,373,000 $1,385,000 15 % 16 % Total Revenue1 $1,456,389 $1,280,000 $1,300,000 (12) % (11) % Net Income (Loss)2, 3 $149,225 $(51,000) $(41,000) N/M N/M Adjusted EBITDA4 $236,791 $236,000 $247,000 — % 4 % 1 Revenue guidance reflects the accounting impact of the Markel Fronting Arrangement. Beginning in 2026, we now control the Essentia book of business with the benefit of our MGA services received by Hagerty Re and not Essentia. As a result, commission revenue and the associated ceding commission expense for policies issued through the Markel Fronting Arrangement are now eliminated in consolidation. Although we expect the arrangement to result in increased profitability (as reflected in Adjusted EBITDA), reported commission revenue and ceding commission expense will be significantly lower than prior periods, affecting period-to-period comparability. 2025 commission revenue associated with our alliance agreement with Markel was $437 million and ceding commission expense related to the Company's reinsurance quota share agreement with Markel was $344 million in 2025. 2 The projected Net Loss includes approximately $190 million of pre-tax transitional costs related to the Markel Fronting Arrangement representing deferred ceding commissions paid to Markel for policies written prior to January 1, 2026, which will be fully amortized ratably over the remaining term of those policies throughout 2026. This amortization will decline from $89 million in Q1 2026 to approximately $10 million in Q4 2026 as 2025 policies expire. Excluding these transitional costs, we expect 2026 to reflect underlying profitability improvement. 3 Full year 2025 Net Income includes (i) the benefit from the $42 million release of a portion of our valuation allowance, partially offset by a $32 million loss related to the change in value of the TRA liability; and (ii) a $21 million reduction in reserves in the fourth quarter, primarily related to favorable development for the 2024 accident year and improvement in current accident year experience. 4 See Non-GAAP Financial Measures below for additional information regarding this non-GAAP financial measure. N/M = Not meaningful Conference Call DetailsHagerty will hold a conference call to discuss the financial results on Wednesday, May 6, 2026 10:00 am Eastern Time. A webcast of the conference call, including its Investor Presentation highlighting first quarter 2026 financial results, will be available on Hagerty's investor relations website at investor.hagerty.com. The dial-in for the conference call is (877) 423-9813 (toll-free) or (201) 689-8573 (international). Please dial the number 10 minutes prior to the scheduled start time.A webcast replay of the call will be available at investor.hagerty.com following the call.Forward-Looking StatementsThis press release 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 Hagerty's future operating results and financial position, Hagerty's business strategy and plans, products, services, and technology implementations, market conditions, growth and trends, expansion plans and opportunities, and Hagerty's objectives for future operations. The words "anticipate," "believe," "envision," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," "ongoing," "contemplate," and similar expressions, and the negatives of these expressions, are intended to identify forward-looking statements.Hagerty has based these forward-looking statements largely on current expectations about future events, which may not materialize. Actual results could differ materially and adversely from those anticipated or implied in forward-looking statements. These factors include, among other things, Hagerty's ability to: (i) compete effectively within Hagerty's industry and attract and retain insurance policyholders and paid Hagerty Drivers Club ("HDC") subscribers; (ii) maintain key strategic relationships with Hagerty's insurance distribution and underwriting carrier partners; (iii) prevent, monitor, and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages, or other issues with Hagerty's technology platforms or use of third-party services; (v) accelerate the adoption of Hagerty's membership and marketplace products and services, as well as any new insurance programs and products offered; (vi) successfully implement the fronting arrangement consummated with Markel and realize the anticipated benefits while also managing the increased exposure to underwriting volatility, catastrophes, reinsurance counterparty risk, and legal, compliance, and regulatory risks resulting from the shift to Hagerty Re assuming 100% of the risk for policies written through this arrangement; (vii) underwrite and price new products, including Enthusiast+, consistent with expected loss ratios and risk tolerances; (viii) execute Broad Arrow's private sale, auction, and financing strategies; (ix) manage the cyclical nature of the insurance business and broader macroeconomic conditions, including inflation, interest rates, and potential recessionary pressures; (x) achieve Hagerty's investment objectives and avoid losses in the investment portfolio; (xi) address unexpected increases in the frequency or severity of claims, including catastrophe losses; and (xii) comply with numerous laws and regulations applicable to Hagerty's business, including without limitation state, federal, and foreign laws relating to insurance and rate increases, privacy and cybersecurity, marketing and advertising, digital services, accounting matters, tax, anti-money laundering, and economic sanctions.The forward-looking statements in this release represent Hagerty's views as of the date hereof. You should not rely on forward-looking statements as predictions of future events. We operate in a very competitive and rapidly changing environment and new risks emerge from time to time. This presentation should be read in conjunction with the information included in filings with the SEC and press releases. Understanding the information contained in these filings is important in order to fully understand Hagerty's reported financial results and business outlook for future periods. In addition, this presentation contains certain "non-GAAP financial measures". The non-GAAP measures are presented for supplemental informational purposes only. These financial measures are not recognized measures under GAAP and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP are provided in the appendix to this presentation.

Hagerty Reports First Quarter 2026 Results; Reaffirms 2026 Growth Outlook

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