Hagerty Q4 adjusted Ebitda doubles to $19.9 million as firm projects accelerating growth

By David Bull

March 4 - (The Insurer) - Hagerty’s adjusted Ebtida for the fourth quarter increased from $9.7 million to $19.9 million as the classic car specialist unveiled forecasts projecting accelerated top line growth in the second half of 2025 to drive strong bottom-line growth including margin expansion.

Adjusted earnings per share for the period was $0.02, compared to consensus forecast of $0.01 from Wall Street analysts.

The Traverse City, Michigan-based company reported fourth-quarter total revenue that increased 19% to $291.7 million, with written premium up 13% to $217.4 million and commission and fee revenue up 15% to $89.4 million in a period where policies-in-force retention hit 89.0% and total insured vehicles increased 8% year over year to 2.6 million.

Hagerty reported a fourth-quarter loss ratio of 42.8%, including 2.4 points of impact from cat losses, compared to 41.5% in the prior-year period.

Earned premium for the period was up 14% to $168.4 million, while membership, marketplace and other revenue increased 68% to $33.9 million.

Fourth-quarter 2024 operating income was $6.0 million, a $12.5 million improvement compared to the prior-year period, with the operating margin decreasing 470 basis points.

Net income for the period was down $0.6 million to $8.4 million.

Highlights for the full year included 20% revenue growth to $1.2 billion, written premiums increasing 15% to $1.04 billion, commission and fee revenue up 16% to $423.2 million and a loss ratio of 46.4%, including 5.6 points from cat losses.

Full-year operating income increased $56.0 million to $66.4 million, with an operating margin that expanded by 450 basis points. Hurricanes Helene and Milton negatively affected full-year operating margins by 230 basis points.

Full-year adjusted Ebitda was up 41% to $124.5 million.

Commenting on the performance, Hagerty chairman and CEO McKeel Hagerty pointed to top-line growth fuelled by a record 279,000 new members.

“We are also investing to improve Hagerty and become more efficient in how we deliver on our brand promise to members and maintain our industry leading net promoter score of 82. These initiatives allowed us to translate revenue growth into even higher rates of profit growth, with net income up 178% and adjusted Ebitda up 41%,” he said.

He added that the firm’s “customer-centric model and automotive expertise” should lead to written premium growing 13%-14% this year, with even faster rates of profit growth.

“Top-line growth should accelerate in the back half of 2025 as we anticipate rolling out the State Farm Classic Plus program to over 25 states in the year. Longer-term, we expect to more than double our policy count to three million by 2030,” said Hagerty.

The company is making “elevated investment” into its tech platforms that should drive accelerated growth in 2026 and beyond, as well as future margin expansion, said the executive.