Hagerty's Q2 2025 Earnings Call: Navigating Contradictions in Revenue Growth, Premium Dynamics, and Market Behavior

Marketplace Revenue Growth and Guidance, Premium Growth and Factors Affecting It, Premium Growth and Market Dynamics, Insurance Market and Consumer Behavior are the key contradictions discussed in Hagerty's latest 2025Q2 earnings call.



Revenue Growth and Strategic Initiatives:
- Hagerty reported an 18% increase in total revenue to $369 million for the second quarter of 2025.
- Growth was driven by a 11% increase in written premium due to new business gains, a 12% growth in commission revenue, and a 68% jump in membership Marketplace and other revenue.
- Expansion into specialty insurance offerings and simplifying membership experiences contributed to this growth.

Operating Profitability and Earnings:
- Operating margins increased by 210 basis points, resulting in a 46% increase in net income and a 28% rise in adjusted EBITDA.
- This was attributed to disciplined cost management and synergies from integration and technology replatforming.

European Expansion and Auction Success:
- Hagerty's European auction business saw a 78% sell-through rate at the Villa d’'Este auction, marking a significant step in European expansion.
- This success was due to partnerships in Belgium and Switzerland, indicating strong demand and potential for future growth.

State Farm Partnership and New Business:
- The integration with State Farm is expected to roll out in 25 states by year-end, positioning Hagerty for significant new business gains.
- This partnership is set to accelerate growth, with plans for both new business and rollovers of existing State Farm books.

Markel Fronting Arrangement and Risk Retention:
- Hagerty announced a new fronting arrangement with Markel, transitioning to full risk retention by moving to a 100% premium and risk share starting in 2026.
- This change is expected to increase profitability through additional underwriting and investment income, and enhanced operational control.