Automotive lifestyle brand and specialist insurer Hagerty is “feeling energized” as Canada enters the spring and car enthusiasts prepare for the driving season.
“People are getting back out on the roads and the tracks to enjoy their cars, and that is a natural energizer for us,” said Jack Butcher, president of Hagerty and leader of the firm’s global risk and insurance business. “People are starting to come out and play again. Now that most of the COVID-19 restrictions have lifted, people are able to get behind the wheel again and enjoy the hobby they love.
“We’re now able to meet face-to-face and do commerce together, which is a vital part of our business. This all adds to the energy that we’re feeling because we have a high engagement model. We attract highly engaged people to Hagerty who want to be highly engaged in the market and with our members. The state of the union, in that regard, is very strong.”
Spring 2022 is a little different for Hagerty than the springs of years gone by because the firm is riding high on the back of its successful IPO (initial public offering) in December 2021, when it was valued at US$3 billion upon its New York Stock Exchange (NYSE) debut.
The IPO followed Hagerty’s business combination with Aldel Financial, a publicly traded special purpose acquisition company (SPAC). Net proceeds of the transaction were approximately US$265 million, which the specialist automotive insurance provider is using to advance its strategic growth opportunities, including digital innovation initiatives and the services provided through its innovative membership ecosystem.
“I think the market was anticipating massive change after our IPO, but they didn’t see that,” Butcher told Insurance Business. “Our purpose is to save driving and car culture for future generations. We are very much a mission-driven, purpose-driven organization focused on our members and our partners – and that hasn’t changed irrespective of our capital structure. Our people are coming to work with a spring in their step, and now we have spring in the air – we’re very excited.”
For the full-year 2021, Hagerty saw its total revenue grow by 24% year-over-year to US$619.1 million, while its written premium grew 17% year-over-year to US$674.3 million. The firm also continued its strong track record of membership growth, ending the year with 2.4 million members, as well as 2.1 million vehicles insured.
Through 2022 and beyond, Hagerty is focused on driving organic growth across its insurance and membership offerings, including in Canada. The firm aims to once again achieve written premium growth of 14-18% this year. One of the core drivers of Hagerty’s success is its unique membership model, which was born a few years ago with the idea of nurturing one of the world’s largest communities of car enthusiasts.
In recent years, Hagerty’s portfolio of automotive offerings has expanded beyond its original insurance offering to include Hagerty Drivers Club, Hagerty Drivers Club magazine, Hagerty YouTube, major concours events, a collection of premium social and car storage membership facilities called Hagerty Garage + Social, and DriveShare, a peer-to-peer service that lets people rent vintage and cool cars.
While many of these offerings were initially launched in the US, Hagerty is now looking at revving up its membership capabilities in Canada, the UK, and beyond.
“It’s very much part of our forward plan,” said Butcher. “We don’t have the [membership model] fully up on skis in Canada yet, but we are beginning to offer membership-like experiences for our existing insurance members, so that they can begin to see some of the benefits. We’re really excited about some of the events we’re doing in Canada, and the local programing engagement.
“We want to make sure that we’re not just providing a one-size-fits-all solution because a US model may not work in Canada or the UK. We have to be sure that when we put a membership offer out there, it honours the local culture, the local nuance, and, frankly, the local custom and demand. We’re engaging closely with our Canadian members and our Canadian staff in the build-out of this offering.”
Hagerty’s membership model in the US (and eventually in Canada) is meant to attract enthusiasts, irrespective of whether they even own a car. The extensive ecosystem of services is designed to attract and retain the car-loving community through value-added content, events, and networking opportunities.
“We recently launched the Hagerty Marketplace, which is a buy/sell/rent platform. Why would we want to do that? There’s a vast number of transactions that happen, and when somebody sells a car, we don’t want to lose them as a member,” Butcher explained. “On the other hand, if somebody’s looking to buy a car, they may come to Hagerty for some advice, or to use our valuation tools, or to rent the vehicle ahead of time through DriveShare. All of that forms our ecosystem – and that’s why we have this legacy of success, at the centre of which is our insurance business. It all connects and feeds each other.”