Hagerty reports $15 million first-quarter loss, confirms restructuring charge

Classic car insurer Hagerty announced a major restructuring charge after reporting a net loss of $15 million for the first quarter of 2023.

Its $5.5 million revision includes a reduction in its workforce and reduced hiring plans, as well as other cost containment initiatives.

The company anticipates annualized incremental cost savings of between $20 and $25 million from the restructuring, with approximately $15 million to be realized in 2023.

Hagerty CEO McKeel Hagerty expressed confidence that the plans would “accelerate [the MGA’s] path to profitability.

Hagerty has raised its full-year 2023 outlook for net income (from a $13 million loss to a $7 million gain) and adjusted EBITDA (between $55 and $75 million).

The CEO also mentioned continued investment in the Hagerty Marketplace and the company’s online platform.

“The opportunity within the Marketplace (Hagerty’s platform) is enormous, and we will be disciplined in our approach to balance growth with customer support and protection that reinforces our reputation as the trusted brand for automotive enthusiasts. “, said.

“Pivot towards profitable growth”

The specialty insurer initiated two layoffs in December and April, laying off nearly 200 employees (about 6% and 4% of its workforce, respectively) as it sought to “drive efficiencies to achieve growth and profitability targets.”

Hagerty’s first quarter total revenues grew 30% to $218.4 million and premium written growth also increased 18% to $182.9 million compared to the prior year. The insurer’s loss ratio for the first quarter was 41.3%. compared to 41.4% the previous year.

McKeel Hagerty has hailed the results as a “strong start” for the company amid what he called a volatile macroeconomic environment.

“We are confident that the opportunities we have identified to monetize our addressable market will broaden our share, and we are carefully prioritizing our growth initiatives in 2023 to significantly improve our profitability and fund our purpose of driving savings and fuel car culture for future generations. the company said in a press release.

Hagerty insures some 2.2 million classic cars and vehicles worldwide, according to its annual report. The Traverse City, Michigan-based company operates in the US, Canada, Germany and the UK.

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