Slide 1: Q1 2022 Earnings Presentation Speakers
Speakers: McKeel Hagerty | Chief Executive Officer Frederick J. Turcotte | SVP & Chief Financial Officer
Slide 2: Forward Looking Statements / Non-GAAP Financial Measures
HAGERTY Q1 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: Q1 2022 Milestones & Highlights
HAGERTY Q1 2022 | 3 Q1 2022 MILESTONES & HIGHLIGHTS On track and on mission Insurance » State Farm on plan. » Top five national partner meetings completed with growth pivots identified for execution. Membership » Reached 2.5M total members and 1.3M paid members. » 50% year-over-year increase of cars
Slide 4: Q1 2022 Consolidated Financial Highlights
HAGERTY Q1 2022 | 4 All financial comparisons are on a year-over-year basis unless otherwise noted. *See Appendix for additional information regarding these non-GAAP financial measures. $155M Written Premium 16% ↑ 41% Loss Ratio 0% $37M Contribution Margin* 20% ↑ $.04 Adjusted Earnings Per Share* $1
Slide 5: Quarterly Key Performance Indicators
HAGERTY Q1 2022 | 5 QUARTERLY KEY PERFORMANCE INDICATORS Q1 2021 Q2 2021 Q3 2021 Q4 2021 TOTAL 2021 Q1 2022 HDC Paid Member Count (2) 666,609 690,407 711,749 718,583 718,583 727,010 Total Written Premium (1) $133,707,005 $208,091,061 $192,090,463 $140,416,912 $674,305,441 $154,790,245 New Business C
Slide 6: Historical Seasonality Trends
HAGERTY Q1 2022 | 6 HISTORICAL SEASONALIT Y TRENDS 40 30 20 10 % Q1 Q2 Q3 Q4 70 60 50 40 30 10 -10 -20 -30 % Q1 Q2 Q3 Q4 Total Revenue 4 YEAR AVERAGE 20% -15% 24% -2% 28% 60% 28% 57% Total Operating Income 4 YEAR AVERAGE IN THOUSANDS Q1 Q2 Q3 Q4 Total 2018 60,489 85,799 83,864 71,547 $301,699 2019 7
Slide 7: Revenue Components
HAGERTY Q1 2022 | 7 REVENUE COMPONENTS Total revenue Commission + fee revenue » Premium growth 16% » New business written premium growth 5% » New business average written premium growth 15% » Policies in Force retention at 89% Membership + other revenue » HDC paid member count growth of 9% » Members
Slide 8: Earnings Analysis
HAGERTY Q1 2022 | 8 EARNINGS ANALYSIS Net Income Adjusted EBITDA M ill io ns ($7) $1 Q1 2021 Q1 2022 $16 ($6) GAAP Net Income (Loss) includes substantial pre-revenue costs related to scaling infrastructure, newly–developed digital platforms and legacy systems, human resources and occupancy to accomm
Slide 9: Contribution Margin and Contribution Margin Ratio
HAGERTY Q1 2022 | 9 CONTRIBUTION MARGIN AND CONTRIBUTION MARGIN RATIO Contribution Margin is the amount of Total Revenue that exceeds variable costs, representing the amount of revenue available to cover fixed costs and reinvest for growth. % of Total % of Total Q1 2021 Revenue Q1 2022 Revenue Total
Slide 10: Q1 2022 Update
Q1 2022 Update
Slide 11: Hagerty + State Farm Partnership
HAGERT Y + STATE FARM PARTNERSHIP Poised and ready for Q4 launch » Digital and technology team entering into testing phase » No change in expected timing of policy launch – end of 2022 » Up to 75% HDC adoption rate on new insurance policies » Anticipated average annual revenue per customer: $85-$110
Slide 12: Hagerty + Speed Digital
HAGERTY Q1 2022 | 12 HAGERT Y + SPEED DIGITAL Speed Digital is a cloud-based technology solution provider for dealers, auction houses, collectors, and enthusiasts. The acquisition of Speed Digital augments Hagerty’s portfolio of marketplace offerings which are designed to help members buy, sell, and
Slide 13: 2022 Outlook
HAGERTY Q1 2022 | 13 2022 OUTLOOK Q1 results are tracking favorably to full year outlook Total Written Premium Growth ↑ 14% - 18% 16% Total Revenue Growth ↑ 24% - 28% 30% Policies in Force Retention 89% - 90% 89% Total Members ↑ 9% - 12% 11% Revenue per Paid Member ↑ 7% - 10% 21% HDC Paid Member Cou
Slide 14: Driving Future Growth
HAGERTY Q1 2022 | 14 DRIVING FUTURE GROWTH Insurance » Grow omni-channel distribution (onboard new partners & deepen existing) » Expand share of insurance underwriting profit » Deliver frictionless member experience (sales, service, claims) Membership » Drive increase in paid membership » Enhance va
Slide 15: Appendix
APPENDIX
Slide 16: Key Performance Indicators + Supplemental Financial Information
HAGERTY Q1 2022 | 16 KEY PERFORMANCE INDICATORS + SUPPLEMENTAL FINANCIAL INFORMATION Q1 2021 Q1 2022 HDC Paid Member Count 666,609 727,010 Total Written Premium $133,707,005 $154,790,245 New Business Count (Insurance) 51,799 47,514 Policies in Force Retention 90.0% 88.9% Loss Ratio 41.4% 41.4% Reven
Slide 17: Historical Seasonality Trends | Supplemental Detail
HAGERTY Q1 2022 | 17 HISTORICAL SEASONALIT Y TRENDS | SUPPLEMENTAL DETAIL 250 200 150 100 50 MILLIONS Q1 Q1Q2 Q2 Q2 Q2Q3 Q3 Q3 Q3Q4 Q4 Q4 Q4Q1Q1 2018 2019 2020 2021 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 Total Written Premium New Business
Slide 18: Supplemental Financial Information: Total Member Count
HAGERTY Q1 2022 | 18 SUPPLEMENTAL FINANCIAL INFORMATION Total Member Count U.S. Q1 2021 Q1 2022 Insurance Only 418,826 447,473 Insurance + HDC 590,182 640,239 HDC Standalone 25,509 29,271 Total Paid 1,034,517 1,116,983 Q1 2021 Q1 2022 U.S. 989,204 1,139,099 Canada 67,253 74,526 Total 1,056,457 1,213
Slide 19: Supplemental Financial Information: Member Count Definitions
HAGERTY Q1 2022 | 19 SUPPLEMENTAL FINANCIAL INFORMATION Member Count Definitions Paid Member: Individuals who have an in-force insurance policy or HDC membership as of a specified point in time. HDC Paid Member Count: A customer with an active/in-force paying HDC membership that has full access to H
Slide 20: Reconciliation of Non-GAAP Metrics: Net Income to Adjusted EBITDA
HAGERTY Q1 2022 | 20 RECONCILIATION OF NON-GAAP METRICS Net Income (Loss) to Adjusted EBITDA Q1 2021 Q1 2022 Net Income (Loss) ($6,851) $15,866 Interest and Other (Income) Expense 437 684 Income Tax Expense 1,318 2,030 Depreciation and Amortization 4,371 7,147 Changes in Fair Value of Warrant Liabil
Slide 21: Reconciliation of Non-GAAP Metrics: Contribution Margin
HAGERTY Q1 2022 | 21 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 22: Reconciliation of Non-GAAP Metrics: Adjusted Earnings Per Share
HAGERTY Q1 2022 | 22 RECONCILIATION OF NON-GAAP METRICS Basis Earnings (Loss) Per Share to Adjusted Earnings Per Share Q1 2022 Net Income (Loss) attributable to controlling interest(1) $27,507 Net Income (Loss) attributable to non-controlling interest (11,641) Consolidated Net Income (Loss)(2) $15,8
Slide 23: Never Stop Driving
Never Stop Driving HAGERTY