Hagerty, Inc. has moved to a new fronting arrangement with longtime partner Markel under which Markel's subsidiary Essentia issues the paper while Hagerty Re assumes a 100% quota share - up from 80% under the prior alliance agreement. The transition, which took effect January 1, 2026, and was announced alongside Hagerty's full-year 2025 results in February, means Hagerty now retains 100% of the underwriting economics and risk on its US book, reinsuring the entire book through its own captive. Under the arrangement, Hagerty Re pays Markel a fronting fee of approximately 2%, along with funding G&A, taxes, and operating expenses.
The Q2 2026 results reflect the accounting impact of the arrangement, not a new disclosure.
The structure Hagerty has moved to - a fronting carrier issuing paper while a captive reinsurer assumes the full quota share - is increasingly the model of choice for well-capitalised MGAs and insurtechs looking to internalise underwriting economics without taking on a full carrier licence. For brokers working program business, the practical question is who is ultimately carrying the risk, and how that changes at renewal.
In Hagerty's case, the answer is straightforward: the company retains all underwriting risk and economics through Hagerty Re, with Markel providing the licensed paper. That clarity is worth understanding, because not every fronting arrangement offers the same transparency. When a fronting carrier's quota share counterpart is less well-capitalised or less transparent, brokers face a harder question about continuity if that relationship breaks down.
Understanding the full structure behind a fronted program - who carries the risk, on what terms, and what triggers a change - is worth building into renewal conversations.
Hagerty reported written premium growth of 19% to $713 million for the first half of 2026. The company added a record 279,000 new members, and policies in force rose 19% to 1.9 million. It posted a first-half net loss of $5 million, driven almost entirely by $153 million in pre-tax transitional costs tied to the Markel arrangement - deferred ceding commissions for policies written before January 1, 2026, which will be fully amortised across 2026. Adjusted EBITDA rose 32% to $160 million.
"This is what forty years of building trust, one member, one partner, one car at a time, looks like when the flywheel hits its stride," said McKeel Hagerty, chief executive officer and chairman.
Hagerty will also complete its acquisition of Bennetts, the United Kingdom's second-largest specialty motorcycle insurance broker, in the third quarter of 2026. The deal, agreed at £34 million with Lucida Group, is expected to triple Hagerty's UK revenue to approximately £25 million.
Buying a broker outright rather than appointing one is part of a wider pattern: carriers and insurtechs are increasingly buying distribution to capture the full economics of a niche. Brokers working affinity-based or enthusiast niches should watch this trend - it raises the question of whether a profitable niche could become a similar acquisition target.
Hagerty raised its full-year 2026 outlook to written premium growth of 16% to 17% and net income of $18 million to $30 million.
