Slide 1: Hagerty Q2 2022 Earnings Presentation
Speakers: McKeel Hagerty | Chief Executive Officer Frederick J. Turcotte | SVP & Chief Financial Officer Q2
Slide 2: Forward-Looking Statements / Non-GAAP Financial Measures
HAGERTY Q2 2022 | 2 FORWARD-LOOKING STATEMENTS / NON-GAAP FINANCIAL MEASURES This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. These forwar
Slide 3: YTD 2022 Key Highlights
HAGERTY Q2 2022 | 3 Total Revenue growth of 26% Written Premium growth of 15% Entered into a definitive agreement to acquire the remaining 60% of Broad Arrow Group (Marketplace for buying, selling and financing collector cars) for $64.8 million in stock State Farm partnership has moved into the test
Slide 4: Proven Track Record of Profitable Long-Term Growth
HAGERTY Q2 2022 | 4 PROVEN TRACK RECORD OF PROFITABLE LONG-TERM GROWTH Source: Hagerty Internal Data, S&P Global Market Intelligence (2022) Hagerty U.S. Auto Premium Growth vs. Industry Top 100 Hagerty U.S. Auto - CAGR 13.1% Industry Top 100 - CAGR 4.3% Sustained Growth 5X the Industry Hagerty U.S.
Slide 5: Broad Arrow Group Acquisition
HAGERTY Q2 2022 | 5 » Marketplace represents a significant new growth opportunity for Hagerty » Significant market opportunity demonstrated by ~300,000 cars transacting for ~$12 billion through Hagerty’s insurance book over the last twelve months ended June 30, 2022 » Broad Arrow Group’s business ra
Slide 6: Hagerty + State Farm Partnership
HAGERTY Q2 2022 | 6 HAGERT Y + STATE FARM PARTNERSHIP » Digital and technology teams in testing phase » Expect to begin activating State Farm’s 19,200 agents to sell classic car policies in the first half of 2023 » 460,000+ existing collector car policies » Up to 75% Hagerty Driver’s Club adoption p
Slide 7: Milestones & Highlights
HAGERTY Q2 2022 | 7 MILESTONES & HIGHLIGHTS On Mission 2022 + Beyond On Track YTD 2022 Progress Insurance » Grow omni-channel distribution (onboard new partners and deepen existing) » Expand share of insurance underwriting profit » Deliver frictionless member experience (sales, service, claims) » St
Slide 8: YTD Q2 2022 Consolidated Financial Highlights
HAGERTY Q2 2022 | 8 All financial comparisons are on a year-over-year basis unless otherwise noted. *See Appendix for additional information regarding these non-GAAP financial measures. Contribution margin represents contribution profit. $392M Written Premium 15% ↑ 41% Loss Ratio 0% $374M Total Reve
Slide 9: Revenue Components
HAGERTY Q2 2022 | 9 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. Commission + fee revenue (+15%) » New
Slide 10: Earnings Analysis
HAGERTY Q2 2022 | 10 EARNINGS ANALYSIS *See Appendix for additional information regarding these non-GAAP financial measures. YTD Q2 2022YTD Q2 2021Q2 2022Q2 2021 Adjusted EBITDA Net Income $12 $19 $16 $6 $20 $10 $10 $6 Adjusted EBITDA Net IncomeM ill io ns GAAP Net Income (Loss) includes substantial
Slide 11: Contribution Margin and Contribution Margin Ratio
HAGERTY Q2 2022 | 11 IN THOUSANDS Q2 2021 % of Total Revenue Q2 2022 % of Total Revenue YTD 2021 % of Total Revenue YTD 2022 % of Total Revenue Total Revenue $167,409 100% $206,017 100% $296,609 100% $373,828 100% Less: Total Operating Expense 153,135 91% 203,630 99% 287,431 97% 384,445 103% Operati
Slide 12: 2022 Outlook
HAGERTY Q2 2022 | 12 2022 OUTLOOK Reaffirming top-line growth *See Appendix for additional information regarding these non-GAAP financial measures. (1) Projected 2022 Net Income (Loss) outlook of ($3) million to ($28) million includes valuation gain on purchase of Broad Arrow Group totaling approxim
Slide 13: Appendix
APPENDIX
Slide 14: Key Performance Indicators + Supplemental Financial Information
HAGERTY Q2 2022 | 14 KEY PERFORMANCE INDICATORS + SUPPLEMENTAL FINANCIAL INFORMATION Q2 2021 Q2 2022 YTD 2021 YTD 2022 HDC Paid Member Count 690,407 742,825 690,407 742,825 Total Written Premium $208,091,061 $237,696,701 $341,798,066 $392,486,946 New Business Count (Insurance) 77,013 74,922 128,812
Slide 15: Quarterly Key Performance Indicators
HAGERTY Q2 2022 | 15 QUARTERLY KEY PERFORMANCE INDICATORS Q1 2021 Q2 2021 Q3 2021 Q4 2021 TOTAL 2021 Q1 2022 Q2 2022 YTD 2022 HDC Paid Member Count (2) 666,609 690,407 711,749 718,583 718,583 727,010 742,825 742,825 Total Written Premium (1) $133,707,005 $208,091,061 $192,090,463 $140,416,912 $674,3
Slide 16: Historical Seasonality Trends | Supplemental Detail
HAGERTY Q2 2022 | 16 HISTORICAL SEASONALIT Y TRENDS | SUPPLEMENTAL DETAIL 90 80 70 60 50 40 30 20 10 THOUSANDS Q1 Q1Q2 Q2 Q2 Q2Q3 Q3 Q3 Q3Q4 Q4 Q4 Q4Q1Q1 2018 2019 2020 2021 Q1 Q2 2022 New Business Count (Insurance) Q1 Q2 Q3 Q4 Total 2018 32,610 56,729 51,795 35,356 176,490 2019 36,848 62,842 57,426
Slide 17: Historical Seasonality Trends
HAGERTY Q2 2022 | 17 HISTORICAL SEASONALIT Y TRENDS 40 30 20 10 % Q1 Q2 Q3 Q4 Total Revenue 4 YEAR AVERAGE 20% 24% 28% 28% 70 60 50 40 30 10 -10 -20 -30 % Q1 Q2 Q3 Q4 -15% -2% 60% 57% Total Operating Income 4 YEAR AVERAGE Geographic footprint of our North American book creates seasonal differences b
Slide 18: Revenue Components by Quarter
HAGERTY Q2 2022 | 18(1) Includes base commissions, payment plan fees and contingent underwriting commissions. REVENUE COMPONENTS BY QUARTER Commission + fee revenue (1) Membership + other revenueEarned premium in Hagerty Reinsurance Q2 2022Q1 2022Q4 2021Q3 2021Q2 2021Q1 2021Q4 2020Q3 2020Q2 2020Q1 2
Slide 19: Supplemental Financial Information: Policies and Vehicles in Force
HAGERTY Q2 2022 | 19 SUPPLEMENTAL FINANCIAL INFORMATION Policies and Vehicles in Force Policies in Force(1) Q1 2021 Q1 2022 Q2 2021 Q2 2022 U.S. 1,020,638 1,101,557 1,051,423 1,124,545 CAN 126,039 136,136 131,494 140,820 UK 24,517 26,224 25,091 26,773 Total 1,171,194 1,263,917 1,208,008 1,292,138 Ve
Slide 20: Supplemental Financial Information: Total Member Count
HAGERTY Q2 2022 | 20 SUPPLEMENTAL FINANCIAL INFORMATION Total Member Count 2.5m Members (+9%): 1.3m Paid Members (+7%) Paid Membership Counts U.S. Q2 2021 Q2 2022 Insurance Member 430,337 454,388 Insurance + HDC 609,721 653,095 HDC Standalone 26,450 29,844 Total U.S. Paid Member Count 1,066,508 1,13
Slide 21: Reconciliation of Non-GAAP Metrics: Net Income to Adjusted EBITDA
HAGERTY Q2 2022 | 21 RECONCILIATION OF NON-GAAP METRICS Net Income (Loss) to Adjusted EBITDA Adjusted EBITDA We define Adjusted EBITDA as net income (loss) (the most directly comparable GAAP measure) before interest, income taxes, and depreciation and amortization (EBITDA), adjusted to exclude chang
Slide 22: Reconciliation of Non-GAAP Metrics: Operating Income to Contribution Margin
HAGERTY Q2 2022 | 22 RECONCILIATION OF NON-GAAP METRICS Operating Income (Loss) to Contribution Margin Contribution Margin and Contribution Margin Ratio We define Contribution Margin as total revenue less operating expense adding back our fixed operating expenses such as depreciation and amortizatio
Slide 23: Reconciliation of Non-GAAP Metrics: Basic EPS to Adjusted EPS
HAGERTY Q2 2022 | 23 RECONCILIATION OF NON-GAAP METRICS Basis Earnings (Loss) Per Share to Adjusted Earnings Per Share (1) Numerator and Denominator of the GAAP measure Basic EPS (Net income (loss) attributable to controlling interest / Weighted-average shares of Class A Common Stock outstanding) (2
Slide 24: Never Stop Driving
Never Stop Driving HAGERTY