Slide 1: Investor Presentation
~ Investor Presentation Speal Mckeel Hagerty | Chief Executive Officer HAGERTY Patrick McClymont | Chief Financial Officer
Slide 2: Forward-looking statements
This presentation contains statements that constitute “forward-looking business, including through any periods of recession, economic downturn statements” within the meaning of the Private Securities Litigation Reform or inflation; (vii) address unexpected increases in the frequency or severity Act
Slide 3: 2023 Outlook vs. 2023 Results
2023 OUTLOOK 2023 RESULTS (AS OF 3/14/2023)* Total Revenue Growth 22% - 26% +27% Written Premium growth 11% - 13% +17% Deliver an unmatched Marketplace experience na +109% Drive Membership revenue na +16% Significantly improve profitability: Net Income $(20)M - $0M $28M Adjusted EBITDA1 $40M - $60M
Slide 4: 2023 highlights: growth and improved profitability
Total Revenue growth of 27% Commission and Fee growth of 19% Written Premium growth of 17% » Added 254,000 new customers » Launched State Farm partnership in four states » Received financial strength rating of A- (Excellent) from AM Best Marketplace growth of 109% Significantly improved profitabilit
Slide 5: Hagerty Marketplace
» Hagerty Marketplace was created by a proven leadership team to help consumers buy, sell, and finance collector cars. » Provide an unmatched online and live Marketplace experience for consumers by serving as the trusted brand for auto enthusiasts, offering certification services, title and escrow,
Slide 6: State Farm partnership
» Began activating State Farm agents to offer State Farm Classic+ policies and Hagerty Drivers Club in four initial states in September of 2023 » 480,000+ existing collector car policies plus HDC enrollment possible on new insurance policies sold by State Farm’s ~19,000 agents » State Farm aligned i
Slide 7: Key 2024 business priorities
Key 2024 business priorities include: » Further improve loyalty to drive renewals and referrals » Enhance member experience in a cost effective and efficient way » Build Hagerty Marketplace into the most trusted and preferred place to buy, sell and finance collector cars » Expand insurance offerings
Slide 8: See Appendix for non-GAAP measure information
1 See Appendix for additional information regarding this non-GAAP measure.
Slide 9: Total Revenue 2023 Highlights
Total Revenue 2023 Highlights Commission + fee revenue (+19%) » Written premium growth of 17% » Policies in Force retention of 89% Membership, marketplace + other revenue (+33%) » Membership revenue growth of 16% » Marketplace revenue growth of 109% » 80% of new insurance customers joined Hagerty Dr
Slide 10: Net Income to Adjusted EBITDA
Net Income Adjusted EBITDA Adjusted EBITDA IN THOUSANDS Q4 2023 Q4 2022 YTD 2023 YTD 2022 Net income (loss) $9,042 $(32,233) $28,179 $2,403 Interest and other income (7,144) (2,403) (22,821) (2,028) Income tax expense 4,591 2,940 16,593 7,017 Depreciation and amortization 10,916 9,550 45,809 33,887
Slide 11: 2024 Outlook
IN THOUSANDS 2023 RESULTS 2024 OUTLOOK ($) 2024 OUTLOOK (%) Total Written Premium $907,175 $1,025,000 - $1,034,000 13% - 14% Total Revenue $1,000,213 $1,150,000 - $1,170,000 15% - 17% Net Income1 $28,179 $61,000 - $70,000 116% - 148% Adjusted EBITDA2 $88,162 $124,000 - $135,000 41% - 53% HAGERTY Q4
Slide 12: Appendix
APPENDIX
Slide 13: Quarterly results 2022 and 2023
Q1 2022 Q2 2022 Q3 2022 Q4 2022 TOTAL Q1 2023 Q2 2023 Q3 2023 Q4 2023 TOTAL 2022 2023 Total Written Premium (thousands) $154,790 $237,697 $222,136 $162,041 $776,664 $182,850 $275,895 $255,569 $192,861 $907,175 Loss Ratio1 41.4% 41.0% 56.4% 41.2% 45.3% 41.3% 42.0% 41.1% 41.5% 41.5% New Business Count
Slide 14: Premium growth and loss performance vs. industry
Hagerty U.S. Auto Premium Growth vs. Industry Top 100 Hagerty U.S. Auto Loss Performance vs. Industry Top 100 Total Percentage Growth Total Loss Performance Hagerty’s full year 2022 loss ratio of 45.3% includes the $10.0 million impact from Hurricane Ian (2.5%) as well as the increased U.S. liabilit
Slide 15: U.S. Auto Written Premium and annual growth
Total U.S. Auto Written Premium U.S. Auto Written Premium Annual Growth
Slide 16: Written premium growth fueled by new members
WRITTEN PREMIUM GROWTH FUELED BY NEW MEMBERS Strong and growing New Business Count EBB iobat New Business Count HAGERTY Q4 2023 | 16
Slide 17: Post 1980 vehicles becoming more impactful for growth
POST 1980 VEHICLES BECOMING MORE IMPACTFUL FOR GROWTH Hagerty Penetration and U.S. Auto Insured Vehicle Count HB Pre 1980 Vehicle Count [Bi Post 1980 vehicle Count 7% annual growth in pre 1980s 18% annual growth in post 1980s 2012 2013 2014 «2015 $2016 2017 «2018 2019 2020 2021 2022 2023 Collectible
Slide 18: Seasonality of revenue and operating income
Total Revenue Operating Income 5 YEAR AVERAGE 5 YEAR AVERAGE 80% 70% 67% 60% 50% 51% 40% 30% 20% 15% 10% 0 (10%) (20%) (30%) (40%) (34%) (50%) $ IN THOUSANDS Q1 Q2 Q3 Q4 Total $ IN THOUSANDS Q1 Q2 Q3 Q4 Total 2019 78,479 109,722 111,472 97,601 397,274 2019 (5,808) 13,247 9,258 (6,149) 10,548 2020 10
Slide 19: Revenue by category
$ IN MILLIONS Commission + fee revenue1 Earned premium in Hagerty Re Membership, marketplace + other revenue 1 Includes base commissions, payment plan fees and contingent underwriting commissions.
Slide 20: Net income to Adjusted EBITDA reconciliation
IN THOUSANDS Q4 2023 Q4 2022 FY 2023 FY 2022 Net income $9,042 $(32,233) $28,179 $2,403 Interest and other income (7,144) (2,403) (22,821) (2,028) Income tax expense 4,591 2,940 16,593 7,017 Depreciation and amortization 10,916 9,550 45,809 33,887 EBITDA $17,405 $(22,146) $67,760 $41,279 Restructuri
Slide 21: Adjusted earnings per share reconciliation
IN THOUSANDS (EXCEPT PER SHARE AMOUNTS) Q4 2023 Q4 2022 FY 2023 FY 2022 Numerator: Net income available to Class A Common Stockholders1 $11,786 $(4,607) $15,881 $32,078 Undistributed earnings allocated to Series A Convertible Preferred Stock 946 — 673 — Accretion of Series A Convertible Preferred St
Slide 22: 2024 Adjusted EBITDA outlook reconciliation
IN THOUSANDS 2024 Low 2024 High Net Income $61,000 $70,000 Interest and Other (Income) Expense (18,000) (18,000) Income Tax (Benefit) Expense 17,250 19,250 Depreciation and Amortization 46,000 46,000 Restructuring, Impairment and Related Charges, Net — — Change in Fair Value of Warrant Liabilities —
Slide 23: Never Stop Driving
Never Stop Driving HAGERTY