Hagerty, Inc.

Previous wording

We are a market leader in providing insurance for collector cars and enthusiast vehicles. Through our insurance model, we act as a Managing General Agent ("MGA") by underwriting, selling, and servicing collector car and enthusiast vehicle insurance policies. Due to our consistent track record of delivering strong underwriting results, we currently reinsure approximately 80% of the risks written by our MGA subsidiaries through our wholly owned subsidiary, Hagerty Reinsurance Limited ("Hagerty Re"). Refer to "Recent Developments" below for information on emerging developments related to a proposed fronting arrangement (the "Proposed Fronting Arrangement") with Markel Group Inc. (together with its subsidiaries, "Markel").

Current wording

We are a market leader in providing insurance for collector cars and enthusiast vehicles. Through our insurance model, we act as a Managing General Agent ("MGA") by underwriting, selling, and servicing collector car and enthusiast vehicle insurance policies. Due to our consistent track record of delivering strong underwriting results, we currently reinsure approximately 80% of the risks written by our MGA subsidiaries through our wholly owned subsidiary, Hagerty Reinsurance Limited ("Hagerty Re").

Previous wording

On July 24, 2025, we announced our entry into a non-binding letter of intent with respect to the Proposed Fronting Arrangement with Markel that is expected to be signed in 2025 and become effective on January 1, 2026. Markel is the ultimate parent company of Essentia Insurance Company ("Essentia"), which serves as the dedicated carrier for the specialty collector vehicle insurance policies sold by our U.S. MGA subsidiaries.

Current wording

On July 24, 2025, we announced our entry into a non-binding letter of intent with respect to a proposed fronting arrangement (the "Proposed Fronting Arrangement") with Markel Group Inc. (together with its subsidiaries, "Markel"). The Proposed Fronting Arrangement is expected to be signed in the fourth quarter of 2025 and become effective on January 1, 2026. Markel is the ultimate parent company of Essentia Insurance Company ("Essentia"), which serves as the dedicated carrier for the specialty collector vehicle insurance policies sold by our U.S. MGA subsidiaries.

Previous wording

Under the Proposed Fronting Arrangement: (i) our underwriting (including pricing decisions, rate filing, insurance rating and risk selections) and claims authorities would be expanded to the maximum levels permitted by applicable law; (ii) Hagerty Re would control 100% of the premium and assume 100% of the risk for policies written through Essentia; (iii) we would continue to issue policies through Essentia and would increase our administrative responsibilities; and (iv) Hagerty Re would initially pay a 2% fronting fee to Markel for administrative support, which would incrementally decrease based on the volume of policies issued by Essentia in each calendar year. We expect these changes to result in increased profitability and additional control allowing for enhanced operational efficiencies.

Current wording

Under the Proposed Fronting Arrangement: (i) we would continue to issue policies through Essentia, but our underwriting authority (including pricing decisions, rate filing, insurance rating, and risk selections) and claims authority would be expanded to the maximum levels permitted by applicable law; (ii) we would increase our administrative responsibilities for the policies issued through Essentia; (iii) Hagerty Re would control 100% of the premium and assume 100% of the risk for policies written through Essentia; and (iv) Hagerty Re would initially pay a 2% fronting fee to Markel for administrative support, which would incrementally decrease based on the volume of policies issued by Essentia in each calendar year. We expect these changes to result in increased profitability and additional control allowing for enhanced operational efficiencies.

Previous wording

For the three months ended June 30, 2025, we reported Net income of $47.2 million, representing a $4.5 million, or 10.7%, increase compared to the prior year, and Adjusted EBITDA of $63.7 million, representing a $10.6 million, or 20.0%, increase compared to the prior year. These improvements are primarily attributable to 10.8% growth in Written Premium, which drove an 11.2% increase in Commission and fee revenue and a 12.8% increase in Earned premium. The comparison to the prior year is also favorably impacted by significantly higher levels of Broad Arrow inventory sales and private sale commissions, as well as the results from Broad Arrow's inaugural auction at Concorso d’Eleganza Villa d’Este.

Current wording

For the three months ended September 30, 2025, we reported Net income of $46.2 million, representing a $27.2 million, or 142.9%, increase compared to the prior year, and Adjusted EBITDA of $49.7 million, representing a $25.5 million, or 105.7%, increase compared to the prior year. These improvements are primarily attributable to 16.1% growth in Written Premium, which drove an 18.0% increase in Commission and fee revenue and a 12.9% increase in Earned premium, net. The comparison to the prior year is also favorably impacted by a lower level of losses and loss adjustment expenses as prior year results included $24.7 million of estimated pre-tax losses related to Hurricane Helene. In addition, current year results reflect significantly higher levels of Broad Arrow inventory sales and private sale commissions.

Previous wording

For the six months ended June 30, 2025, we reported Net income of $74.5 million, representing a $23.6 million, or 46.5%, increase compared to the prior year, and Adjusted EBITDA of $103.4 million, representing a $22.9 million, or 28.5%, increase compared to the prior year. These improvements are primarily attributable to 11.3% growth in Written Premium, which drove a 11.9% increase in Commission and fee revenue and a 12.3% increase in Earned premium. The comparison to the prior year is also favorably impacted by significantly higher levels of Broad Arrow inventory sales and private sale commissions, as well as the results from Broad Arrow's inaugural auction at Concorso d’Eleganza Villa d’Este.

Current wording

For the nine months ended September 30, 2025, we reported Net income of $120.7 million, representing a $50.8 million, or 72.7%, increase compared to the prior year, and Adjusted EBITDA of $153.1 million, representing a $48.5 million, or 46.3%, increase compared to the prior year. These improvements are primarily attributable to 13.0% growth in Written Premium, which drove a 14.0% increase in Commission and fee revenue and a 12.5% increase in Earned premium, net. The comparison to the prior year is also favorably impacted by a lower level of losses and loss adjustment expenses as prior year results included $24.7 million of estimated pre-tax losses related to Hurricane Helene. In addition, current year results reflect significantly higher levels of Broad Arrow inventory sales and private sale commissions, as well as the results from Broad Arrow's inaugural auction at Concorso d’Eleganza Villa d’Este.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" below for a description of non-GAAP financial measures and a reconciliation to the most comparable GAAP measure.

Current wording

Adjusted EBITDA is a non-GAAP financial measure. Please see the section titled "Non-GAAP Financial Measures" below for a description of non-GAAP financial measures and a reconciliation to the most comparable GAAP measure.

Previous wording

(3) Hagerty Re Combined Ratio is the ratio of (i) Hagerty Re's losses, loss adjustment expenses, and underwriting expenses to (ii) its earned premium. Hagerty Re's underwriting expenses primarily include ceding commissions and, to a lesser extent, certain administrative expenses. Hagerty Re Combined Ratio provides a benchmark to evaluate underwriting profitability, including expense trends. A combined ratio under 100% indicates underwriting income while a combined ratio exceeding 100% indicates an underwriting loss.

Current wording

(3) Hagerty Re Combined Ratio is the ratio of (i) Hagerty Re's losses, loss adjustment expenses, and underwriting expenses to (ii) its earned premium. Hagerty Re's underwriting expenses primarily include ceding commissions and, to a lesser extent, certain administrative expenses. Hagerty Re Combined Ratio provides a benchmark to evaluate underwriting profitability. A combined ratio under 100% indicates underwriting income while a combined ratio exceeding 100% indicates an underwriting loss.

Previous wording

Earned premium represents the earned portion of written premiums that Hagerty Re has assumed under quota share reinsurance agreements with our insurance carrier partners, net of premiums ceded to various reinsurers and the cost of catastrophe reinsurance coverage. Premiums assumed and ceded are recognized on a pro-rata basis over the term of the reinsured policies, which is generally 12 months. The cost of catastrophe reinsurance coverage is recognized over the contract period in proportion to the related earned premium.

Current wording

Earned premium, net represents the earned portion of written premiums that Hagerty Re has assumed under quota share reinsurance agreements with our insurance carrier partners, net of premiums ceded to various reinsurers and the cost of catastrophe reinsurance coverage. Premiums assumed and ceded are recognized on a pro-rata basis over the term of the reinsured policies, which is generally 12 months. The cost of catastrophe reinsurance coverage is recognized over the contract period in proportion to the related earned premium.

Previous wording

Our marketplace business earns fee-based revenue primarily from the sale of collector cars and enthusiast vehicles through live auctions, time-based digital auctions, and brokered private sales. Through our marketplace business, we also earn revenue from the sale of collector cars and enthusiast vehicles that we have opportunistically acquired for resale. In addition, we also earn finance revenue from loans made to qualified collectors and businesses secured by their collector cars.

Current wording

Our marketplace business earns fee-based revenue primarily from the sale of collector cars and enthusiast vehicles through live auctions, time-based digital auctions, and brokered private sales. Through our marketplace business, we also earn revenue from the sale of collector cars and enthusiast vehicles that we have opportunistically acquired for resale. In addition, we earn finance revenue from loans made to qualified collectors and businesses secured by their collector cars.

Previous wording

Salaries and benefits consist primarily of costs related to employee compensation, payroll taxes, employee benefits, and employee development costs. Employee compensation includes wages, as well as various forms of incentive compensation, including share-based compensation. Employee benefits primarily include the cost of our retirement, medical, dental, wellness, and severance plans. Costs related to employee education, training, and recruiting are recorded in employee development costs. Salaries and benefits are expensed as incurred except for costs that are required to be capitalized, which are amortized over the useful life of the asset created, such as internally developed software and software-as-a-service ("SaaS") implementation costs. Salaries and benefits are expected to increase in dollar amount over time as the business continues to grow but will likely decrease as a percent of revenue.

Current wording

Salaries and benefits consist primarily of costs related to employee compensation, payroll taxes, employee benefits, and employee development costs. Employee compensation includes wages, as well as various forms of incentive compensation, including share-based compensation. Employee benefits primarily include the cost of our retirement, medical, dental, wellness, and severance plans. Costs related to employee education, training, and recruiting are considered employee development costs. Salaries and benefits are expensed as incurred except for costs that are required to be capitalized, which are amortized over the useful life of the asset created, such as internally developed software and software-as-a-service ("SaaS") implementation costs. Salaries and benefits are expected to increase in dollar amount over time as the business continues to grow but will likely decrease as a percent of revenue.

Previous wording

We record an estimate of quarterly losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations using an annual loss ratio, which is based on statistical analysis performed by our internal and external actuarial team and considers several factors, including projected levels of catastrophe events. Management believes this approach provides a more consistent view of loss experience over the year given the seasonality of Hagerty Re's business. The annual loss ratio is reviewed throughout the year and adjusted, as necessary.

Current wording

We record an estimate of quarterly losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations using an annual loss ratio, which is based on statistical analysis performed by our internal and external actuarial teams and considers several factors, including projected levels of catastrophe events. Management believes this approach provides a more consistent view of loss experience over the year given the seasonality of Hagerty Re's business. The annual loss ratio is reviewed throughout the year and adjusted, as necessary.

Previous wording

Sales expense includes costs related to the sale and servicing of insurance policies, as well as costs related to our membership and marketplace offerings, such as broker expense, cost of sales, promotion expense, and travel and entertainment expenses. Broker expense is the compensation paid to our agent partners and national broker partners when an insurance policy is written by our MGA subsidiaries through a broker relationship. Broker expense generally tracks with written premium growth. Cost of sales includes payment processing fees, emergency roadside service costs, postage and other variable costs associated with the sale and servicing of a policy. Cost of sales also includes the cost of acquired vehicles sold through our marketplace business, and sales commissions related to our marketplace business, as well as interest expense and borrowing costs associated with the Broad Arrow Capital LLC ("BAC") credit facility ("BAC Credit Facility"). Promotion expense includes various costs related to branding, events, advertising, marketing, and customer acquisition. Sales expenses, in general, are expensed as incurred and will trend with revenue growth.

Current wording

Sales expense includes costs related to the sale and servicing of insurance policies, as well as costs related to our membership and marketplace offerings, such as broker expense, cost of sales, promotion expense, and travel and entertainment expenses. Broker expense is the compensation paid to our agent partners and national broker partners when an insurance policy is written by our MGA subsidiaries through a broker relationship. Broker expense generally trends with written premium growth. Cost of sales includes payment processing fees, emergency roadside service costs, postage and other variable costs associated with the sale and servicing of a policy. Cost of sales also includes the cost of acquired vehicles sold through our marketplace business, and sales commissions related to our marketplace business, as well as interest expense and borrowing costs associated with the Broad Arrow Capital LLC ("BAC") credit facility ("BAC Credit Facility"). Promotion expense includes various costs related to branding, events, advertising, marketing, and customer acquisition. Sales expenses, in general, are expensed as incurred and will trend with revenue growth.

Previous wording

Interest and other income (expense), net primarily includes interest income related to cash balances and fixed maturity securities, realized gains or losses from the sale of fixed maturity securities, and realized and unrealized gains and losses related to equity securities. Additionally, Interest and other income (expense), net includes interest expense related to outstanding borrowings, primarily related to our current and prior revolving credit facilities with JPMorgan Chase Bank, N.A. ("JPM"), as well as the State Farm Term Loan (as defined in Note 15 — Debt in Item 1 of Part I of this Quarterly Report) and changes in the value of the liability related to our Tax Receivable Agreement ("TRA") (the "TRA Liability") with Hagerty Holding Corp. ("HHC") and Markel (together the "Legacy Unit Holders"). Refer to Note 20 — Taxation in Item 1 of Part I of this Quarterly Report for additional information related to the TRA.

Current wording

Interest and other income (expense), net primarily includes interest income related to cash balances and fixed maturity securities, realized gains or losses from the sale of fixed maturity securities, and realized and unrealized gains and losses related to equity securities. Additionally, Interest and other income (expense), net includes interest expense related to outstanding borrowings, primarily related to our current and prior revolving credit facilities with JPMorgan Chase Bank, N.A. ("JPM"), as well as the State Farm Term Loan (as defined in Note 15 — Debt in Item 1 of Part I of this Quarterly Report). Lastly, Interest and other income (expense), net also includes expense related to changes in the value of the liability related to our Tax Receivable Agreement ("TRA") (the "TRA Liability") with Hagerty Holding Corp. ("HHC") and Markel (together the "Legacy Unit Holders"). Refer to Note 20 — Taxation in Item 1 of Part I of this Quarterly Report for additional information related to the TRA.

Previous wording

Hagerty, Inc. is taxed as a corporation and pays corporate federal, state, and local taxes with respect to income allocated from THG. Hagerty, Inc., Hagerty Insurance Holdings, Inc., Broad Arrow Group, Inc. ("Broad Arrow"), Hagerty Radwood, Inc., and various foreign subsidiaries are treated as taxable entities and income taxes are provided where applicable. Hagerty Insurance Holdings, Inc. files a consolidated tax return with its wholly owned corporate subsidiaries Hagerty Re and Drivers Edge Insurance Company ("Drivers Edge").

Current wording

Hagerty, Inc. is taxed as a corporation and pays corporate federal, state, and local taxes with respect to income allocated from THG. Hagerty, Inc., Hagerty Insurance Holdings, Inc., Broad Arrow Group, Inc. ("Broad Arrow"), Hagerty Radwood, Inc., and various foreign subsidiaries are treated as taxable entities and income taxes are provided where applicable. Hagerty Insurance Holdings, Inc. files a consolidated tax return with its wholly owned corporate subsidiaries Hagerty Re and Drivers Edge.

Previous wording

The increase in revenue from policy renewals was primarily driven by a 14.3% increase in underlying policy premiums, as well as continued strong policy retention. The increase in renewal policy premiums is the result of rate increases in several states due to inflation and higher vehicle repair costs, both of which drive higher premiums and, in turn, higher commission revenue.

Current wording

The increase in revenue from policy renewals was primarily driven by a 14.6% increase in underlying policy premiums, as well as continued strong policy retention. The increase in renewal policy premiums is the result of rate increases in several states due to inflation and higher vehicle repair costs, both of which drive higher premiums and, in turn, higher commission revenue. The increase in revenue from new policies was driven by a 47.9% increase in new policies written when compared to the prior year period, principally resulting from business generated by our master alliance agreement with State Farm Mutual Automobile Insurance Company ("State Farm"). Refer to Note 21 — Related-Party Transactions in Item 1 of Part I of this Quarterly Report for additional information with respect to our master alliance agreement with State Farm.

Previous wording

Commission and fee revenue from agent sources increased $8.1 million, or 11.6%, and Commission and fee revenue from direct sources increased $6.4 million, or 10.8%, during the three months ended June 30, 2025. Commission rates vary based on geography, but do not differ by distribution channel (i.e., whether they are direct-sourced or agent-sourced).

Current wording

Commission and fee revenue from agent sources increased $12.3 million, or 19.3%, and Commission and fee revenue from direct sources increased $8.6 million, or 16.5%, during the three months ended September 30, 2025. Commission rates vary based on geography, but do not differ by distribution channel (i.e., whether they are direct-sourced or agent-sourced).

Previous wording

Earned premium at Hagerty Re was $177.8 million for the three months ended June 30, 2025, an increase of $20.2 million, or 12.8%, compared to 2024. This increase was almost entirely due to continued growth of subject premiums written through our MGA subsidiaries, which increased $33.7 million, or 11.9%, compared to the three months ended June 30, 2024.

Current wording

Earned premium, net was $187.0 million for the three months ended September 30, 2025, an increase of $21.4 million, or 12.9%, compared to 2024. This increase was primarily due to continued growth of subject premiums written through our MGA subsidiaries, which increased $33.3 million, or 12.9%, compared to the three months ended September 30, 2024.

Previous wording

The following tables present the amount of premiums assumed and earned by Hagerty Re, as well as the related quota share percentages for the three months ended June 30, 2025 and 2024:

Current wording

The following tables present the amount of premiums assumed and earned, as well as the related quota share percentages for the three months ended September 30, 2025 and 2024:

Previous wording

(1)Effective January 1, 2024, Hagerty Re is no longer reinsuring classic auto risks produced by its United Kingdom ("U.K.") MGA affiliate, and the book is in run-off.

Current wording

(1)Effective January 1, 2024, we are no longer reinsuring classic auto risks produced by our United Kingdom ("U.K.") MGA affiliate, and the book is in run-off.

Previous wording

Membership fee revenue was $15.7 million for the three months ended June 30, 2025, an increase of $1.5 million, or 10.9%, compared to 2024. This increase was primarily attributable to a $1.4 million, or 10.7%, increase in revenue attributable to new policies issued with a bundled HDC membership. For the three months ended June 30, 2025 and 2024, membership fees were 32.9% and 52.7%, respectively, of the Membership, marketplace and other revenue total.

Current wording

Membership fee revenue was $16.0 million for the three months ended September 30, 2025, an increase of $1.2 million, or 7.9%, compared to 2024, which was primarily attributable to a $1.0 million, or 7.6%, increase in revenue attributable to new insurance policies issued with a bundled HDC membership. For the three months ended September 30, 2025 and 2024, membership fees were 28.6% and 35.6%, respectively, of the Membership, marketplace and other revenue total.

Previous wording

Marketplace revenue was $26.8 million for the three months ended June 30, 2025, an increase of $20.5 million compared to 2024. This improvement was principally due to significantly higher levels of inventory sales and private sale commissions. To a lesser extent, the increase in Marketplace revenue was due to revenues earned from Broad Arrow's inaugural auction at Concorso d’Eleganza Villa d’Este, which was held in May 2025. For the three months ended June 30, 2025 and 2024, Marketplace revenue was 56.2% and 23.4%, respectively, of the Membership, marketplace and other revenue total.

Current wording

Marketplace revenue was $34.2 million for the three months ended September 30, 2025, an increase of $12.6 million, or 58.5%, compared to 2024. This improvement was principally due to significantly higher levels of inventory sales and private sale commissions. For the three months ended September 30, 2025 and 2024, Marketplace revenue was 61.2% and 51.9%, respectively, of the Membership, marketplace and other revenue total.

Previous wording

Ceding commissions, net was $82.9 million for the three months ended June 30, 2025, an increase of $9.5 million, or 12.9%, compared to 2024. This increase is primarily attributable to the 12.8% increase in Earned premium discussed above.

Current wording

Ceding commissions, net was $87.4 million for the three months ended September 30, 2025, an increase of $9.9 million, or 12.8%, compared to 2024. This increase is primarily attributable to the 12.9% increase in Earned premium, net discussed above.

Previous wording

For the three months ended June 30, 2025, our loss ratio was 42.3%, including the impact of catastrophe losses. For the three months ended June 30, 2024, our loss ratio was 41.1%, including the impact of catastrophe losses.

Current wording

For the three months ended September 30, 2025, our loss ratio was 42.0%, including the impact of catastrophe losses. For the three months ended September 30, 2024, our loss ratio was 60.0%, including the impact of catastrophe losses, primarily Hurricane Helene, which resulted in $24.7 million of estimated pre-tax losses.

Previous wording

Sales expense was $67.4 million for the three months ended June 30, 2025, an increase of $19.4 million, or 40.4%, compared to 2024. This increase was due, in part, to a $15.3 million increase in cost of sales, predominantly as a result of a higher level of marketplace inventory sales, as well as a $3.6 million increase in sales commissions, consistent with revenue growth within the marketplace business. In addition, broker expense increased $2.2 million, consistent with the written premium growth within the agent insurance distribution channel.

Current wording

Sales expense was $77.7 million for the three months ended September 30, 2025, an increase of $18.5 million, or 31.3%, compared to 2024. This increase was due, in part, to a $14.7 million increase in cost of sales, predominantly as a result of a higher level of marketplace inventory sales, as well as a $1.8 million increase in sales commissions, consistent with revenue growth within the marketplace business. In addition, broker expense increased $2.3 million, consistent with the written premium growth within the agent insurance distribution channel.

Previous wording

Depreciation and amortization expense was $8.8 million for the three months ended June 30, 2025, a decrease of $1.2 million, or 11.8%, compared to 2024. This decrease was primarily attributable to a smaller base of in-service fixed assets and finite-lived intangible assets as of June 30, 2025 when compared to the same period in 2024.

Current wording

Depreciation and amortization expense was $9.4 million for the three months ended September 30, 2025, an increase of $0.2 million, or 2.5%, compared to 2024. This increase was primarily attributable to amortization of SaaS implementation costs related to our new insurance policy management system. This increase was offset by a smaller base of in-service fixed assets and finite-lived intangible assets as of September 30, 2025.

Previous wording

During the three months ended June 30, 2024, Loss related to warrant liabilities, net was $1.9 million as a result of the change in fair value of our then outstanding warrant liabilities. There were no warrants outstanding during the three months ended June 30, 2025 due to the Warrant Exchange transaction that was completed in July 2024. Refer to Note 6 — Fair Value Measurements in Item 1 of Part I of this Quarterly Report for additional information with respect to our warrants.

Current wording

During the three months ended September 30, 2024, Loss related to warrant liabilities, net was $0.5 million. The $0.5 million loss in the prior year period consists of a $2.0 million loss related to the Warrant Exchange, partially offset by a $1.5 million gain resulting from the change in fair value of our then outstanding warrant liabilities. There were no warrants outstanding during the three months ended September 30, 2025 due to the Warrant Exchange transaction that was completed in July 2024. Refer to Note 6 — Fair Value Measurements in Item 1 of Part I of this Quarterly Report for additional information with respect to our warrants.

Previous wording

For the three months ended June 30, 2025, income tax expense was $6.2 million, representing an increase of $0.4 million, or 6.0%, compared to 2024. This increase was primarily due to an increase in THG earnings attributable to Hagerty, Inc. Refer to Note 20 — Taxation in Item 1 of Part I of this Quarterly Report for additional information with respect to items affecting our effective tax rate.

Current wording

Refer to Note 20 — Taxation in Item 1 of Part I of this Quarterly Report for additional information with respect to items affecting our effective tax rate.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024, and the dollar and percentage change between the two periods:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024, and the dollar and percentage change between the two periods:

Previous wording

Commission and fee revenue was $243.6 million for the six months ended June 30, 2025, an increase of $25.9 million, or 11.9%, compared to 2024. This increase was driven by policy renewals, which contributed $26.4 million to the year-over-year improvement, partially offset by a $0.5 million decrease in revenue related to new policies.

Current wording

Commission and fee revenue was $380.7 million for the nine months ended September 30, 2025, an increase of $46.9 million, or 14.0%, compared to 2024. This increase was driven by policy renewals, which contributed $41.7 million to the year-over-year improvement, and to a lesser extent, new policies, which resulted in a $5.1 million increase in revenue.

Previous wording

The increase in revenue from policy renewals was primarily driven by a 15.3% increase in underlying policy premiums, as well as continued strong policy retention. The increase in renewal policy premiums is the result of rate increases in several states due to inflation and higher vehicle repair costs, both of which contribute to higher premiums and, in turn, higher commission revenue.

Current wording

The increase in revenue from policy renewals was primarily driven by a 15.0% increase in underlying policy premiums, as well as continued strong policy retention. The increase in renewal policy premiums is the result of rate increases in several states due to inflation and higher vehicle repair costs, both of which contribute to higher premiums and, in turn, higher commission revenue. The increase in revenue from new policies was primarily driven by a 14.1% increase in new policies written when compared to the prior year period, principally resulting from business generated by our master alliance agreement with State Farm. Refer to Note 21 — Related-Party Transactions in Item 1 of Part I of this Quarterly Report for additional information with respect to our master alliance agreement with State Farm.

Previous wording

Commission and fee revenue from agent sources increased $13.9 million, or 11.7%, and Commission and fee revenue from direct sources increased $12.0 million, or 12.1%, during the six months ended June 30, 2025. Commission rates vary based on geography, but do not differ by distribution channel (i.e., whether they are direct-sourced or agent-sourced).

Current wording

Commission and fee revenue from agent sources increased $26.2 million, or 14.3%, and Commission and fee revenue from direct sources increased $20.7 million, or 13.7%, during the nine months ended September 30, 2025. Commission rates vary based on geography, but do not differ by distribution channel (i.e., whether they are direct-sourced or agent-sourced).

Previous wording

Earned premium at Hagerty Re was $347.1 million for the six months ended June 30, 2025, an increase of $37.9 million, or 12.3%, compared to 2024. This increase was primarily due to continued growth of subject premiums written through our MGA subsidiaries, which increased $55.0 million, or 11.4%, compared to the six months ended June 30, 2024.

Current wording

Earned premium, net was $534.2 million for the nine months ended September 30, 2025, an increase of $59.3 million, or 12.5%, compared to 2024. This increase was primarily due to continued growth of subject premiums written through our MGA subsidiaries, which increased $88.3 million, or 12.0%, compared to the nine months ended September 30, 2024.

Previous wording

The following tables present premiums assumed and earned by Hagerty Re, as well as the related quota share percentages for the six months ended June 30, 2025 and 2024:

Current wording

The following tables present premiums assumed and earned by the Company, as well as the related quota share percentages for the nine months ended September 30, 2025 and 2024:

Previous wording

Membership fee revenue was$31.0 million for the six months ended June 30, 2025, an increase of $3.4 million, or 12.5%, compared to 2024. This increase was primarily due to a $3.2 million, or 12.4%, increase in revenue attributable to new insurance policies issued with a bundled HDC membership. For the six months ended June 30, 2025 and 2024, membership fees were 31.8% and 47.5%, respectively, of total Membership, marketplace and other revenue.

Current wording

Membership fee revenue was$47.0 million for the nine months ended September 30, 2025, an increase of $4.6 million, or 10.8%, compared to 2024, which was primarily due to a $4.2 million, or 10.7%, increase in revenue attributable to new insurance policies issued with a bundled HDC membership. For the nine months ended September 30, 2025 and 2024, membership fees were 30.6% and 42.6%, respectively, of total Membership, marketplace and other revenue.

Previous wording

Marketplace revenue was $55.8 million for the six months ended June 30, 2025, an increase of $39.0 million compared to 2024. This improvement was principally due to significantly higher levels of inventory sales, including cars acquired from The Academy of Art University Collection and sold at auction in February 2025, as well as increased private sale commissions. To a lesser extent, the increase in Marketplace revenue was attributable to revenues earned from Broad Arrow's inaugural auction at Concorso d’Eleganza Villa d’Este, which was held in May 2025. For the six months ended June 30, 2025 and 2024, Marketplace revenue was 57.1% and 28.9%, respectively, of total Membership, marketplace and other revenue.

Current wording

Marketplace revenue was $89.9 million for the nine months ended September 30, 2025, an increase of $51.6 million compared to 2024. This improvement was principally due to significantly higher levels of inventory sales, including cars acquired from The Academy of Art University Collection and sold at auction in February 2025, as well as increased private sale commissions. To a lesser extent, the increase in Marketplace revenue was attributable to revenues earned from Broad Arrow's inaugural auction at Concorso d’Eleganza Villa d’Este, which was held in May 2025. For the nine months ended September 30, 2025 and 2024, Marketplace revenue was 58.6% and 38.5%, respectively, of total Membership, marketplace and other revenue.

Previous wording

Other revenue, which includes sponsorship, admission, advertising, valuation, and sublease revenue, totaled $5.2 million for the three months ended June 30, 2025, a decrease of $1.2 million, or 18.9%, compared to 2024. This decrease was primarily attributable to the loss of registration fee revenue associated with MSR, which was sold in June 2024, partially offset by an increase in advertising revenue. For the three months ended June 30, 2025 and 2024, other revenue was 10.9% and 23.9%, respectively, of the Membership, marketplace and other revenue total. Refer to Note 11 — Divestiture in Item 1 of Part I of this Quarterly Report for additional information related to the sale of MSR.

Current wording

Other revenue, which primarily includes sponsorship, admission, advertising, valuation, and sublease revenue, was $16.5 million for the nine months ended September 30, 2025, a decrease of $2.3 million, or 12.3%, compared to 2024. This decrease was primarily attributable to the loss of registration fee revenue attributable to MSR, which was sold in June 2024. For the nine months ended September 30, 2025 and 2024, other revenue was 10.8% and 18.9%, respectively, of total Membership, marketplace and other revenue. Refer to Note 11 — Divestiture in Item 1 of Part I of this Quarterly Report for additional information related to the sale of MSR.

Previous wording

Ceding commissions, net was $160.3 million for the six months ended June 30, 2025, an increase of $15.9 million, or 11.0%, compared to 2024. This increase is primarily attributable to the 12.3% increase in Earned premium discussed above.

Current wording

Ceding commissions, net was $247.7 million for the nine months ended September 30, 2025, an increase of $25.8 million, or 11.6%, compared to 2024. This increase is primarily attributable to the 12.5% increase in Earned premium, net discussed above.

Previous wording

The following table summarizes the components of Ceding commissions, net for the six months ended June 30, 2025 and 2024:

Current wording

The following table summarizes the components of Ceding commissions, net for the nine months ended September 30, 2025 and 2024:

Previous wording

For the six months ended June 30, 2025, our loss ratio was 42.2%, including the impact of $10.3 million of pre-tax catastrophe losses resulting from the Southern California wildfires in January 2025. For the six months ended June 30, 2024, our loss ratio was 41.1%, including the impact of catastrophe losses.

Current wording

For the nine months ended September 30, 2025, our loss ratio was 42.1%, including the impact of $10.3 million of pre-tax catastrophe losses resulting from the Southern California wildfires in January 2025. For the nine months ended September 30, 2024, our loss ratio was 47.7%, including the impact of catastrophe losses, primarily Hurricane Helene, which resulted in $24.7 million of estimated pre-tax losses.

Previous wording

Sales expense was $122.0 million for the six months ended June 30, 2025, an increase of $34.4 million, or 39.2%, compared to 2024. This increase was due, in part, to a $27.5 million increase in cost of sales, predominantly as a result of a higher level of marketplace inventory sales, as well as a $4.3 million increase in sales commissions, consistent with revenue growth within the marketplace business. In addition, broker expense increased $3.9 million, consistent with the written premium growth within the agent insurance distribution channel.

Current wording

Sales expense was $199.7 million for the nine months ended September 30, 2025, an increase of $52.9 million, or 36.0%, compared to 2024. This increase was due, in part, to a $42.2 million increase in cost of sales, predominantly as a result of a higher level of marketplace inventory sales, as well as a $6.1 million increase in sales commissions, consistent with revenue growth within the marketplace business. In addition, broker expense increased $6.1 million, consistent with the written premium growth within the agent insurance distribution channel.