Slide 1: Investor Presentation
“Investor Presentation Speakers: McKeel Hagerty | Chief Executive Officer HAGERTY Patrick McClymont | SVP & Chief Financial Officer
Slide 2: Forward Looking Statements / Non-GAAP Financial Measures
FORWARD LOOKING STATEMENTS / NON-GAAP FINANCIAL MEASURES This presentation contains forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. These forward-looking statements ref
Slide 3: Key 2022 Highlights and 2023 Outlook
Total Revenue growth of 27% Written Premium growth of 15% Broad Arrow Group acquisition » Three live auctions with $86 million in total vehicle sales » Expect to begin writing new policies in 2023 State Farm partnership progressing well through the testing phase and regulatory approval process Pivot
Slide 4: Hagerty Marketplace
» Significant adjacent market opportunity with ~300,000 cars transacting for ~$12.5 billion through Hagerty’s insurance book in 2022 » Executed three live auctions with $86 million in total vehicle sales helping drive $14 million in Marketplace revenue in 2022 » Other opportunities include insurance
Slide 5: Hagerty + State Farm Partnership
HAGERTY + STATE FARM PARTNERSHIP » Digital and technology teams are progressing through the testing phase and regulatory approval process » Expect to begin activating State Farm’s approximately 19,200 agents to sell classic car policies in 2023 » Anticipated average annual revenue per customer: $85-
Slide 6: 2023 - Pivot to Profitability
» Total Revenue growth of 22-26% powered by Written Premium growth of 11-13% » Sustain double-digit Written Premium growth trajectory » Deliver an unmatched online and live Marketplace experience » Drive loyalty, referrals and incremental revenue and profit from Membership » Continue evolution into
Slide 7: 2023 Outlook
2023 OUTLOOK Strong top-line momentum expected to continue in 2023 with significantly improved profitability 2022 Results 2023 Outlook 2022 Results vs 2023 Outlook in thousands Low End Range High End Range Low End Range High End Range Total Revenue $787,588 $961,000 $993,000 22% 26% Total Written Pr
Slide 8: Revenue Components
REVENUE COMPONENTS 1 Includes base commissions, payment plan fees and contingent underwriting commissions. 2 Currently applies to U.S. and U.K. programs. Generally described as an arrangement where underwriting risk and profit is shared proportionately. $154 $197 $83 $112 $13 $21$58 $64 Q4 2021 Q4 2
Slide 9: Adjusted EBITDA and Earnings Analysis
1 Adjusted EBITDA and Net Income (Loss) in 2022 were negatively impacted by $16.5 million in losses related to Hurricane Ian and increased 2022 U.S. reserves, as well as a $4.1 million reduction in CUC. 2 See Appendix for additional information regarding this non-GAAP financial measure. $(66) $(32)
Slide 10: Full Year 2022 Financial Highlights
1 Hagerty’s 2022 loss ratio of 45.3% includes the $10.0 million impact from Hurricane Ian (2.5%) and increased U.S. reserves of $6.5 million (1.6%). 2 See Appendix for additional information regarding this non-GAAP measure. FULL YEAR 2022 FINANCIAL HIGHLIGHTS 45.3% Loss Ratio1Total Revenue 88.0% Ret
Slide 11: Appendix
APPENDIX
Slide 12: On Mission, On Track: 2022 Progress
On Mission On Track 2022 + Beyond Full Year 2022 Progress Insurance » Grow omnichannel distribution (onboard new partners and deepen existing) » Expand share of insurance underwriting profit » Deliver frictionless experience (sales, service, claims) » State Farm partnership progress continues with r
Slide 13: Quarterly Key Performance Indicators
3 Hagerty’s 2022 loss ratio of 45.3% includes the $10.0 million impact from Hurricane Ian (2.5%) and increased U.S. reserves of $6.5 million (1.6%). 2 Metrics measured as of the end of the period. 1 See Appendix for additional information regarding these non-GAAP financial measures. QUARTERLY KEY PE
Slide 14: Historical Written Premium Growth
HISTORICAL WRITTEN PREMIUM GROWTH Total U.S. Auto Written Premium U.S. Auto Written Premium Annual Growth Growing during good times and bad 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 0 100 200 300 400 500 600 700 800 2006 2007 2008 2009 2010 2011 2012 2
Slide 15: Proven Track Record of Profitable Long-Term Growth
PROVEN TRACK RECORD OF PROFITABLE LONG-TERM GROWTH 1 Hagerty’s 2022 loss ratio of 45.3% includes the $10.0 million impact from Hurricane Ian (2.5%) as well as the increased U.S. liability reserves of $6.5 million (1.6%). Recently implemented rate changes expected to drive 2023 loss ratios in line wi
Slide 16: Historical Seasonality Trends
Total Written Premium New Business Count (Insurance) HISTORICAL SEASONALITY TRENDS $ IN THOUSANDS Q1 Q2 Q3 Q4 Total 2018 82,514 137,943 123,385 86,621 430,463 2019 96,732 158,501 142,030 99,747 497,010 2020 112,421 184,423 163,520 117,870 578,234 2021 133,707 208,091 192,091 140,417 674,306 2022 154
Slide 17: Historical Seasonality Trends: Revenue and Operating Income
21% 27% 28% 25% Q1 Q2 Q3 Q4 —% 10% 20% 30% 40% (8)% 47% 52% 9% Q1 Q2 Q3 Q4 (30)% (20)% (10)% —% 10% 20% 30% 40% 50% 60% 70% Total Revenue Operating Income 5 YEAR AVERAGE 5 YEAR AVERAGE Geographic footprint of our North American book creates seasonal differences by quarter for revenue and operating i
Slide 18: Revenue Components by Quarter
1 Includes base commissions, payment plan fees and contingent underwriting commissions. REVENUE COMPONENTS BY QUARTER 50 53 57 60 63 70 79 83 89 94 107 112 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 46 72 68 50 54 83 76 58 62 96 86 64 Q1 2020 Q2 2
Slide 19: Supplemental Financial Information: Policies and Vehicles in Force
1 Metrics measured as of the end of the period. SUPPLEMENTAL FINANCIAL INFORMATION Policies and Vehicles in Force Policies in Force1 Q1 2021 Q1 2022 Q2 2021 Q2 2022 Q3 2021 Q3 2022 Q4 2021 Q4 2022 % Growth U.S. 1,020,638 1,101,557 1,051,423 1,124,545 1,072,634 1,140,892 1,080,909 1,147,920 6% CAN 12
Slide 20: Supplemental Financial Information: Members and Users
Guest User Counts Q4 2021 Q4 2022 U.S. 1,116,451 1,202,465 Canada 73,321 79,497 7% growth Total Guest User Count 1,189,772 1,281,962 Guest User An individual who has created an online profile by providing email, establishing a password, and verifying email. Paid Membership Counts U.S. Q4 2021 Q4 202
Slide 21: Adjusted EBITDA
Adjusted EBITDA We define Adjusted EBITDA as consolidated net income (loss) (the most directly comparable GAAP measure) before interest and other income (expense), income tax (expense) benefit, and depreciation and amortization, adjusted to exclude (i) restructuring, impairment and related charges,
Slide 22: Adjusted EPS Reconciliation
Adjusted EPS The most directly comparable GAAP measure is basic earnings per share ("Basic EPS"), which is calculated as Net income (loss) attributable to controlling interest divided by the weighted average of Class A Common Stock outstanding during the period. We caution investors that Adjusted EP
Slide 23: Never Stop Driving
Never Stop Driving HAGERTY