Hagerty, Inc. (HGTY): Business Model Canvas [Dec-2025 Updated]

Honestly, when you look at a company like Hagerty, Inc., you're not just seeing an insurer; you're seeing a finely tuned ecosystem built on passion, which is why I spent two decades tracking these unique models. The strategy hinges on integrating specialized insurance-backed by new deals with carriers like State Farm and Liberty Mutual-with a massive community, evidenced by their Drivers Club hitting nearly 921,000 paid members as of Q3 2025. This integrated approach is driving their outlook for 14-15% revenue growth this year, even while they pour $20 million into modernizing their tech stack. Below, we break down the nine essential building blocks of this business model to show you precisely how they connect specialized underwriting with media and marketplace revenue streams.

Hagerty, Inc. (HGTY) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that fuel Hagerty, Inc.'s specialty insurance distribution and risk management strategy as of late 2025. These aren't just vendor agreements; they are deep integrations that move significant premium volume.

State Farm

The collaboration with State Farm on the State Farm Classic Plus program is a major distribution play. Top-line growth was expected to accelerate in the back half of 2025 as this program rolled out to over 25 states in the year. This partnership lets State Farm agents offer Hagerty, Inc.'s specialty coverage directly to their existing customer base.

• Program rollout targeted for over 25 states in 2025.
• Coverage includes Guaranteed Value® for covered total loss.
• Adjusters receive 80 hours of training in classic vehicle repair annually.

Liberty Mutual/Safeco

A new carrier partnership dropped in November 2025 with Liberty Mutual Insurance. This deal brings Hagerty, Inc. access to a massive pool of policyholders. Liberty Mutual is the seventh largest auto insurer in the United States, so that reach matters. The offering of enhanced collectible car insurance to Liberty Mutual and Safeco customers is set to begin in 2026.

This is definitely about scaling distribution through a major carrier channel.

Markel

The evolution of the relationship with Markel is financially significant, shifting risk control entirely to Hagerty, Inc. A new fronting arrangement is slated to start January 1, 2026. Under this structure, Hagerty Re will control 100% of the premium and assume 100% of the underwriting and investment economics. Markel will receive an initial fronting fee of 2%, which is set to decrease based on policy volume. To put this in context, under the prior model, Hagerty Re assumed 80% of the risk and paid a 47% ceding commission to Markel. Plus, Markel maintains a stake as a shareholder of 23% in Hagerty, Inc.

Independent Agent Network

The independent agent network remains the primary route for specialty insurance product distribution. Looking at the year-to-date 2025 performance through the third quarter, Commission and fee revenue hit $380.7 million, marking a 14% year-over-year increase. For the full year 2025, Hagerty, Inc. anticipates Written Premium growth in the range of 13-14%. The Hagerty Drivers Club membership, a key engagement metric tied to this ecosystem, reached approximately 908,000 paid members in the second quarter of 2025, up 6% year-over-year.

Here's a quick look at the financial mechanics of these key alliances:

Finance: draft 13-week cash view by Friday.

Hagerty, Inc. (HGTY) - Canvas Business Model: Key Activities

Specialty vehicle insurance underwriting and claims handling.

The core activity involves managing risk for specialty vehicles, evidenced by key performance indicators through the third quarter of 2025.

Operating the Hagerty Marketplace (Broad Arrow Auctions, inventory sales).

This segment focuses on facilitating the buying and selling of enthusiast vehicles.

Developing and maintaining the Duck Creek technology platform ($20 million elevated spend in 2025).

Significant capital allocation is directed toward modernizing the core insurance systems.

• Elevated technology spend in 2025 aggregates to $20 million.
• This spend is primarily directed at the new technology platform, Duck Creek.
• The investment is intended to help efficiently grow the business over coming years.

Producing automotive media, content, and hosting enthusiast events.

This activity supports the broader automotive lifestyle brand and community engagement.

• Year-to-date Membership revenue (9 months 2025) reached $47.0 million.
• Third quarter Membership revenue was $16.0 million, up 8% year-over-year.
• Hagerty Drivers Club (HDC) paid members reached approximately 921,000 as of Q3 2025.
• Total Revenue for the first nine months of 2025 was $1,068.3 million, up 18% year-over-year.
• Third quarter Total Revenue was $380.0 million, up 18% year-over-year.

Hagerty, Inc. (HGTY) - Canvas Business Model: Key Resources

You're looking at the core assets Hagerty, Inc. (HGTY) uses to run its business as of late 2025. These aren't just abstract concepts; they are hard numbers and established market positions that drive their platform.

The foundation of Hagerty, Inc.'s value proposition is its deep, proprietary knowledge base. This includes the classic car valuation data and the expert appraisal services that back their underwriting decisions. This data-driven approach allows for disciplined risk selection, which is evident when you compare their loss ratios to the broader industry.

The Hagerty Drivers Club (HDC) is a massive, engaged community resource. As of the third quarter of 2025, the paid membership count hit 920,725 members. Honestly, this membership base is a key differentiator because it provides recurring, high-margin revenue and acts as a powerful funnel for insurance cross-selling. Each member pays about $70 annually for benefits like roadside assistance and exclusive content.

Brand equity is another massive intangible asset. Hagerty, Inc. enjoys industry-leading customer retention, with policy retention sitting at 88.6% for the first nine months of 2025, often cited as 89%. This loyalty is a direct result of their focus on enthusiast service, reflected in their Net Promoter Score (NPS) of 82, which is roughly double the industry average of 39.

Hagerty Reinsurance is the entity taking on the risk, which is crucial for underwriting income. Their underwriting discipline is clear from the loss ratios. For the first nine months of 2025, the overall loss ratio improved to 42.1%. In Q3 2025 specifically, the Hagerty Re Loss Ratio was reported at 42%. This is significantly better than the combined ratios of larger property and casualty peers, which were around 92% and 86.8% in recent quarters.

Here's a quick look at the scale of these key quantitative resources as of Q3 2025:

The strength of these resources is what allows Hagerty, Inc. to execute its strategy. You can see the impact in the membership and retention figures:

• Hagerty Drivers Club annual fee is $70.
• HDC members report referring someone to Hagerty at 77% in the past year.
• Total Written Premium for Q3 2025 was $334.05 million.
• The company expects to more than double its policy count to three million by 2030.
• Commission and fee revenue for Q1 2025 was $100.3 million.

The combination of data, brand trust, and a sticky membership model creates a powerful moat. If onboarding takes 14+ days, churn risk rises, but their high retention suggests they are managing that defintely well.

Hagerty, Inc. (HGTY) - Canvas Business Model: Value Propositions

You're looking at how Hagerty, Inc. (HGTY) translates its passion for car culture into tangible value for its customers, which is the core of its business model. It's not just about selling insurance; it's about building an ecosystem around the enthusiast lifestyle.

Specialized Agreed Value insurance for collector vehicles.

Hagerty, Inc. (HGTY) offers insurance products specifically designed for specialty vehicles, moving beyond standard stated value policies to provide greater specificity and protection. This focus on a niche allows for superior underwriting results compared to broader market players. For instance, major property and casualty insurers like Travelers and AIG reported combined ratios around 92% and 86.8% respectively in recent quarters, but Hagerty, Inc. (HGTY)'s specialty focus yielded a loss ratio of 42.1% for the first nine months of 2025. This underwriting discipline supports strong financial performance, with the company raising its full-year 2025 outlook to project Written Premium growth of 13-14%. Customer loyalty in this segment is extremely high, evidenced by a policy-in-force retention rate of 88.6% as of the first nine months of 2025.

The scale of their protected assets is significant, with the total number of insured vehicles reaching 2.7 million as of the first nine months of 2025.

Exclusive access to a global automotive enthusiast community and events.

Hagerty, Inc. (HGTY) targets the 67 million Americans who self-describe as car enthusiasts. The Hagerty Drivers Club (HDC) serves as the central hub for this community, growing to over 900,000 paid members by late 2025. This membership base is a key driver of engagement and revenue, with Membership revenue increasing 14% year-over-year in the first quarter of 2025. The value proposition here is access to exclusive content and experiences that fuel the passion.

• Target Addressable Market (U.S. Enthusiasts): 67 million.
• Hagerty Drivers Club Paid Members (Late 2025): Over 900,000.
• Hagerty Drivers Club Paid Members (Q1 2025): Approximately 889,000.
• Q1 2025 Membership Revenue Growth: 14% year-over-year.

Integrated platform to Protect, Buy, Sell, and Enjoy special vehicles.

The platform integrates insurance with transactional services, creating multiple points of monetization. The Marketplace, which facilitates buying and selling, is growing rapidly. Marketplace revenue for the first nine months of 2025 saw a 232% year-over-year increase, following a 176% increase in Q1 2025 to $29.0 million. This ecosystem is designed to capture more of the enthusiast's spending, with a long-term goal to more than double the policy count to 3 million by 2030. The overall Total Revenue growth for the first nine months of 2025 was 18% year-over-year, reaching $1.07 billion, showing the success of this diversified approach.

Expert, enthusiast-focused claims and valuation service.

The trust built through expert valuation and claims service is a foundational resource. The company maintains an impressive Net Promoter Score (NPS) of 82 as of Q2 YTD 2025, which is significantly higher than the industry average of 39. This high satisfaction score is a direct result of providing enthusiast-focused service, including expert repair networks and valuation data. The valuation tools are considered industry-standard, which helps support the Agreed Value insurance proposition and informs the entire ecosystem.

If onboarding takes 14+ days, churn risk rises, but the high NPS suggests the service delivery is defintely hitting the mark.

Finance: draft 13-week cash view by Friday.

Hagerty, Inc. (HGTY) - Canvas Business Model: Customer Relationships

You're looking at how Hagerty, Inc. keeps its specialized customer base engaged and loyal; it's a mix of digital reach and very personal attention. The core of this is building a true community, not just selling policies.

Community-based engagement via Hagerty Drivers Club (HDC).

The Hagerty Drivers Club (HDC) is central to this, acting as a community hub that doesn't even require an insurance policy to join. As of Q3 2025, HDC Paid Members stood at 920,725. This membership base is described as the largest automotive membership program globally. The community engagement is reinforced through local presence, with HDC Chapters meeting monthly across numerous US and Canadian cities. This community focus extends to their media, where the HDC magazine is read by approximately 2 million people per issue, and their social presence includes over 3.1 million YouTube followers.

The value proposition for these members includes:

• Subscription to the award-winning HDC magazine.
• Access to a benefits platform with discounts from brands like Starbucks and AirBnB.
• Exclusive access to HDC member areas at Hagerty events.
• HDC driving tours, with 2025 tours including the Lake District and North Wales.

High-touch, personalized service for specialized insurance needs.

For the core insurance business, the service is tailored because the assets are unique. Hagerty, Inc. currently underwrites approximately 2.4 million collectible vehicles, which represents about 5% of the estimated 46 million collectible vehicles in the U.S. This specialized underwriting expertise allows for a differentiated product, such as policies carrying a guaranteed value limit, unlike the depreciating scale used in traditional auto insurance. The company's focus on service is evident in its success with large-scale partner integrations; for instance, the ramp of converting State Farm's approximately 525,000 classic policies to their new Classic Plus program produced the highest month of policy-in-force growth in company history in October 2025. Furthermore, Hagerty, Inc. announced a new partnership to support Liberty Mutual and Safeco customers with claims, valuation, and underwriting for their collector vehicles.

The results of this focused service model are clear in the retention figures:

Digital self-service tools and educational content.

Beyond direct service, Hagerty, Inc. empowers customers through data and digital access. The company's proprietary valuation tools are used by the entire industry, providing an authoritative data set that supports both underwriting and customer confidence. HDC members get unlimited, free access to the Chilton Library for automotive repair and a shop-finder tool to locate trusted repair shops. This blend of expert data and accessible repair resources supports the enthusiast lifestyle digitally.

High policies-in-force retention rate of 88.6% (YTD Q3 2025).

The retention metric is a direct measure of relationship strength in insurance. For the year-to-date period ending Q3 2025, Hagerty, Inc. achieved a policies-in-force retention rate of 88.6%. This figure aligns with their historical performance, as the company has maintained renewal retention rates close to 90% over the last decade. This high retention, combined with new business count gains, drove a 16% increase in written premium for Q3 2025. You see this loyalty reflected in the overall scale, with total insured vehicles growing to 2.7 million as of Q3 2025. Finance: draft 13-week cash view by Friday.

Hagerty, Inc. (HGTY) - Canvas Business Model: Channels

You're looking at how Hagerty, Inc. gets its products and services to the car-loving customer base as of late 2025. It's a mix of old-school relationships and modern digital reach.

Independent insurance agents and brokers

This channel remains a bedrock for Hagerty, Inc.'s insurance business.

• Deep relationship with 25,000 independent agents and brokers across the nation as of the context provided in early 2025.
• This network brings in about 55% of the company's total business.
• Hagerty Drivers Club members show a retention rate of 89%.

Direct-to-Consumer (DTC) digital platform and call center

The direct channel captures the rest of the insurance business, supported by digital tools and expert call center staff.

• Commission and fee revenue from the direct distribution channel includes revenue generated by the company's direct sales efforts.
• The company added a record 279,000 new Hagerty members in the full year 2024.
• Hagerty Drivers Club paid members were approximately 876,000 as of the end of 2024.
• Hagerty Drivers Club paid members were over 920,000 as of the end of Q3 2025.

Strategic carrier partnerships (e.g., State Farm, Liberty Mutual)

These large-scale partnerships are a key focus for accelerating growth in the insurance side of the business.

The State Farm Classic Plus program rollout is a major near-term focus.

Marketplace (Broad Arrow Auctions) for high-value transactions

The Marketplace business, anchored by Broad Arrow Auctions, shows significant top-line acceleration, driven by live and online events.

The 2025 year-to-date revenue growth of 18% for Total Revenue is built on these diverse streams.

Hagerty, Inc. (HGTY) - Canvas Business Model: Customer Segments

Hagerty, Inc. (HGTY) targets a broad but specific base centered around automotive passion, aiming to serve the estimated 67 million Americans who self-describe as car enthusiasts. This segment is not monolithic; it ranges from casual admirers to dedicated, high-value collectors, and the business model is designed to capture value across this entire spectrum through its integrated ecosystem of insurance, marketplace, and media offerings. The company's success in translating this passion into profit is evident, with year-to-date Net Income jumping 73% to $120.7 million through the first nine months of 2025.

The core customer base is segmented by their level of commitment and the type of vehicle they own or aspire to own. This segmentation allows Hagerty, Inc. to tailor its value propositions effectively, from basic insurance to high-touch valuation services. The company is actively working to grow its insured fleet, with a longer-term expectation to more than double its policy count to three million by 2030.

You can see the distinct groups Hagerty, Inc. focuses on below:

• Classic and collector vehicle owners.
• General automotive enthusiasts, representing the 67 million US market.
• High-net-worth collectors and investors, who contribute to the estimated $1 trillion insurable value in the US collectible car market.
• Owners of modern enthusiast vehicles, targeted via the new Enthusiast+ program launched in 2025.

The Hagerty Drivers Club (HDC) membership base, which serves as a key community touchpoint, has shown strong growth, adding 258,000 members year-to-date in 2025, bringing the total to over 900,000 members by late 2025.

Hagerty, Inc. (HGTY) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Hagerty, Inc.'s operations as of late 2025. These are the major drains on cash flow that the business must manage to achieve its growth targets.

The largest variable cost in the insurance segment is the cost of claims. For the third quarter of 2025, Hagerty, Inc.'s insurance loss and loss adjustment expenses resulted in a reported loss ratio of 42.1%. This figure improved from 47.7% in the prior year period, reflecting reduced catastrophe losses and disciplined underwriting.

Compensation and agent costs are significant operating expenses. While the exact commission expense is not isolated, we see related personnel costs rising. Year-to-date 2025 Salary and benefits increased by 18.8%, largely due to higher accrued incentive compensation reflecting strong financial outperformance in 2025 compared to the prior year. For context on the revenue side that drives commissions, third quarter 2025 Commission and fee revenue was $137.1 million, and year-to-date 2025 Commission and fee revenue reached $380.7 million.

A major planned expenditure is the technology transformation. Hagerty, Inc. has budgeted $20 million in elevated spend for 2025, primarily directed toward the new Duck Creek platform. This investment is intended to drive future efficiency gains and scalable growth. This elevated technology spend is factored into the full-year 2025 outlook.

Costs related to media, events, and the Marketplace are also material, often reflected in General and Administrative (G&A) expenses. G&A expenses for the year-to-date 2025 period increased by 12%, driven by higher software licensing costs related to the technology transformation. For the third quarter of 2025 specifically, G&A increased by 17%, attributed to software licensing costs and professional fees associated with the secondary offering and the Markel Fronting Arrangement.

Here is a summary of key financial metrics that inform the cost structure:

You can see the impact of these costs reflected in the operating results:

• Third quarter 2025 Operating Income rose 240% year-over-year to $34.3 million.
• Third quarter 2025 Operating Margins expanded by nearly six percentage points.
• The company ended Q3 2025 with $160.4 million in unrestricted cash.

Finance: draft 13-week cash view by Friday.

Hagerty, Inc. (HGTY) - Canvas Business Model: Revenue Streams

Hagerty, Inc. generates revenue through several distinct streams tied to its core automotive enthusiast ecosystem.

Commission and fee revenue from insurance premiums is a primary driver, with year-to-date (YTD) Q3 2025 Commission and fee revenue reaching $380.7 million, marking a 14% year-over-year increase.

The earned premium and investment income component, largely associated with Hagerty Reinsurance, shows strong contribution. For the third quarter of 2025, earned premium was $187.0 million, which was a 13% increase. Furthermore, third quarter 2025 interest income from the investment portfolio was $11 million.

The company's community engagement translates directly into revenue via the Hagerty Drivers Club. Membership fees from Hagerty Drivers Club for YTD Q3 2025 were approximately $47.0 million, an 11% year-over-year increase. Hagerty Drivers Club paid members stood at approximately 921,000 as of Q3 2025.

The Marketplace segment, covering auctions and inventory sales, shows significant acceleration. Marketplace revenue for YTD Q3 2025 was approximately $89.9 million, representing a 135% increase year-over-year. The Q3 2025 Marketplace revenue alone was $34.2 million, up 58% year-over-year.

The overall financial expectation for the year remains positive. The full-year 2025 Total Revenue outlook is for 14-15% growth.

Here's a look at some key revenue components from the third quarter of 2025:

You can also see the strength in the underlying insurance metrics that feed these revenue streams:

• Total Written Premium (YTD Q3 2025): $934.4 million.
• Total Written Premium (Q3 2025): $334.0 million.
• Hagerty Re Combined Ratio (YTD Q3 2025): 89.6%.
• Hagerty Re Combined Ratio (YTD Q3 2024): 107.7%.

The company is focused on growth across its three main areas:

• Insurance and Marketplace momentum.
• Underwriting normalization and efficiency.
• Strategic partnerships and distribution, including the Liberty Mutual/Safeco partnership.

Finance: draft 13-week cash view by Friday.