Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

August 8, 2023

Date of Report (date of earliest event reported)

HAGERTY, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-40244	86-1213144
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

121 Drivers Edge

Traverse City, Michigan 49684

(Address of principal executive offices and zip code)

(800) 922-4050

Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

HGTY

The New York Stock Exchange

Warrants, each whole warrant exercisable for one share
of Class A common stock, each at an exercise price of
$11.50 per share

HGTY.WS

The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02 Results of Operations and Financial Condition

On August 8, 2023, Hagerty, Inc. (the "Company") announced its financial results for the fiscal quarter ended June 30, 2023 by issuing a letter to its stockholders and a press release. The Company will also be holding a conference call on August 8, 2023 to discuss its financial results for the three and six months ended June 30, 2023. The full text of the Company's letter to its stockholders and press release are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.

The information furnished pursuant to Item 2.02 of this Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under Securities Act of 1933, as amended ("Securities Act") or the Exchange Act, except as expressly set forth by specific reference in such a filing.

ITEM 7.01 Regulation FD Disclosure

On August 8, 2023, the Company posted to the investor relations page of its website an investor presentation expected to be used by the Company in connection with certain future presentations to investors and others. A copy of the investor presentation is attached as Exhibit 99.3 to this Current Report on Form 8-K.

The information contained in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.3, shall not be deemed to be "filed" for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.						Description
99.1						Letter to Stockholders, dated August 8, 2023
99.2						Press Release, dated August 8, 2023
99.3						Investor Presentation, dated August 8, 2023
104						Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



						HAGERTY, INC.

						/s/ Barbara E. Matthews
Date: August 8, 2023						Barbara E. Matthews
						SVP, General Counsel and Corporate Secretary

HAGERTY Q2 2023 | 2 S T O C K H O L D E R L E T T E R Pivoting to Profitability August is the peak of driving season for the 67 million auto enthusiasts in the United States. The term “enthusiasts” means far more than people just liking their special car. In Greek, enthusiast roughly translates into: “filled with spirit.” This describes well how our members feel about their cars. They truly care about them, and they love driving them. And lots of people love cars. They dream about them. They can’t wait to get out on a curvy country road or to take a special someone to a special place. Hot rodders. Collectors. Tinkerers. Men and women. Young and old. These are the people for whom Hagerty exists and who make up our Total Addressable Market, which is both alluring and largely untapped. After nearly four decades in the market, Hagerty is by far the biggest provider of specialty insurance for the collectible car market, insuring more than 2 million vehicles. But this implies a penetration of just 4% in the U.S. given the base of 45 million collector cars worth an estimated $1 trillion. There is clearly a long runway ahead for growth, which bodes well for stockholders, members and employees. Excellent customer service and strong retention are the bedrock of good insurance companies, and in Hagerty’s case – thanks to our retention rate – we begin each year with nearly 90% of our revenue locked and loaded. Few companies can say that. Dear Hagerty Stockholders, Members and One Team Hagerty,

HAGERTY Q2 2023 | 3 And as you know, there is more to Hagerty than just insurance. Through our Hagerty Drivers Club, our live and digital auctions, and our event and automotive media portfolios, we have become a full spectrum automotive lifestyle provider, one that is creating an extremely attractive value proposition for enthusiasts and investors alike. So how are we doing? During the first six months of 2023, we grew total revenue by 28%, an impressive number given the uncertain economic environment. And our teams have been working diligently to streamline our operations to enhance profitability by expanding our margins. As a result, we believe we are on a clear path to becoming a leaner, stronger, and more profitable company that can self-fund these high rates of growth. I want to take a moment to thank our executive management team for their strategic vision and ceaseless efforts these past three quarters as we have reshaped our business practices to align with our vision for the future. I also want to thank all of the talented individuals on One Team Hagerty for your flexibility and deep engagement as we have adjusted our sails. Without you - your dedication and your effort - nothing we do in leadership would matter much. Success takes collaboration, and together we are building something special. I am so grateful to be on this ride with you. A key part of our business model is how we partner with many of the largest insurance companies to help them better serve automotive enthusiasts. We are grateful for all of these partners, and we work hard to provide them with our specialized services. As many of you know, our latest agreement is with State Farm, and we have been hard at work integrating our systems with theirs to prepare for the upcoming launch of our commercial partnership. We now expect to commence offering the State Farm Classic+ program and Hagerty Drivers Club in four states during the fall of 2023. Over time, we believe this agreement will increase our scale and profitability, as well as drive significant growth in State Farm’s Classic book of business, saving their customers money while providing them with the excellent Hagerty service that fuels our industry leading net promoter scores. Our maturity as an underwriter is evolving as we assume more of the unique risk segment onto our balance sheet and develop full-stack insurance systems and capabilities. To accelerate these investments, we closed a $105 million round of funding from our most strategic partners, Markel, State Farm and

HAGERTY Q2 2023 | 4 the Hagerty Family. The funds will help support our long-term growth ambitions, including improving the membership experience for existing customers and attracting new clients. We also intend to make some select technology investments to increase the efficiency of our operations while improving customer outcomes. In summary, we have a great brand and business model, a passionate team, and a strong financial position. That’s a pretty good recipe for success. I couldn’t be more excited about our future. We hope you are, as well. Thank you for being on this journey with us. Onward and upward! McKeel Hagerty CEO, Hagerty

For Immediate Release

Hagerty Reports Second Quarter 2023 Results

Increases 2023 Outlook

•Second quarter 2023 Total Revenue increased 27% to $261.2 million compared to the prior year period and year-to-date 2023 Total Revenue increased 28% to $479.6 million compared to the prior year period

•Second quarter 2023 Written Premium increased 16% year-over-year to $275.9 million, and year-to-date 2023 Written Premium increased 17% to $458.7 million compared to the prior year period

•Second quarter 2023 Membership, marketplace and other revenue increased 44% year-over-year to $23.6 million, and year-to-date 2023 Membership, marketplace and other revenue increased 53% to $50.1 million compared to the prior year period

•Second quarter 2023 Net Income (Loss) increased 380% to $15.5 million compared to the prior year period, and year-to-date 2023 Net Income (Loss) decreased 95% to $0.5 million compared to the prior year period

•Second quarter 2023 Adjusted EBITDA of $34.4 million, an increase of $18.3 million compared to the prior year period, and year-to-date 2023 Adjusted EBITDA of $41.1 million, an increase of $31.0 million compared to the prior year period

•Raised $105 million of capital on June 23, 2023, including $80.0 million of convertible preferred equity and a $25.0 million commitment of long-term financing for Hagerty Reinsurance Limited

TRAVERSE CITY, Mich., August 8, 2023 /PRNewswire/ – Hagerty, Inc. (NYSE: HGTY), an automotive lifestyle brand and a leading specialty insurance provider focused on the global automotive enthusiast market, today announced financial results for the three and six months ended June 30, 2023.

"We delivered first half revenue growth of 28% as the Hagerty ecosystem of products and services is resonating with car enthusiasts. These excellent results were powered by robust written premium growth of 17%, earned premium growth of 34%, and membership and marketplace revenue growth of 53%," said McKeel Hagerty, Chief Executive Officer of Hagerty. "Our revenue engine is firing on all cylinders, and we now expect full year 2023 revenue to grow 23-27%."

Mr. Hagerty continued, "Given the strong conversion of this incremental revenue into profits, we have also increased our 2023 outlook for net income and Adjusted EBITDA. Our significantly improved profitability, combined with the additional capital raised from our strategic investors positions us well to invest in our growth opportunities over the coming years and save driving and car culture for future generations."

SECOND QUARTER 2023 FINANCIAL HIGHLIGHTS

•Second quarter 2023 Written Premium increased 16% to $275.9 million compared to the prior year period, and year-to-date 2023 Written Premium increased 17% to $458.7 million compared to the prior year period.

•Second quarter 2023 Commission and fee revenue increased 15% to $110.2 million compared to the prior year period, and year-to-date 2023 Commission and fee revenue increased 17% to $184.8 million compared to the prior year period.

•Policies in Force Retention was 88% as of June 30, 2023 compared to 88.2% as of June 30, 2022. Total insured vehicles increased 9% year-over-year to 2.3 million compared to the prior year period.

•Second quarter 2023 Loss Ratio was 42.0% compared to 41.0% in the prior year period. Year-to-date 2023 Loss Ratio was 41.7% compared to 41.2% in the prior year period.

•Second quarter 2023 Earned premium increased 35% to $127.5 million compared to the prior year period, and year-to-date 2023 Earned premium increased 34% to $244.7 million compared to the prior year period.

•Earned premium growth was driven by the strong Written Premium growth as well as the increased quota share to approximately 80% compared to 70% in the prior year period.

•Second quarter 2023 Membership, marketplace and other revenue increased 44% year-over-year to $23.6 million compared to the prior year period, and year-to-date 2023 Membership, marketplace and other revenue increased 53% to $50.1 million compared to the prior year period.

•Broad Arrow Group helped drive $4.2 million in marketplace revenue during the second quarter 2023 and $10.0 million in marketplace revenue year-to-date 2023.

•Hagerty Driver's Club (HDC) paid members increased 7% to approximately 792,000 compared to 743,000 as of June 30, 2022.

•Second quarter 2023 Operating Income (Loss) of $17.3 million compared to $2.4 million in the prior year period, and year-to-date 2023 Operating Income (Loss) $0.8 million compared to $(10.6) million in the prior year period.

•Year-to-date 2023 results include restructuring charges of $8.4 million primarily associated with a reduction in force, reduced hiring plans and additional cost containment initiatives. The Company anticipates delivering incremental annualized cost savings of $20 to $25 million, with approximately $15 million to be realized in 2023.

•Year-to-date 2023 depreciation and amortization was $24.1 million compared to $15.4 million in the prior year period. The increase was driven in part by the $3.8 million impairment of media content assets during the first half of the year.

•Second quarter 2023 Net Income (Loss) of $15.5 million compared to $(5.5) million in the prior year period, and year-to-date 2023 Net Income (Loss) of $0.5 million compared to $10.3 million in the prior year period.

•Net Income (Loss) includes the impact from the change in fair value of warrant liabilities, the restructuring charges, as well as the impairment of media content assets.

•Second quarter 2023 Adjusted EBITDA of $34.4 million compared to $16.1 million in the prior year period, and year-to-date 2023 Adjusted EBITDA of $41.1 million compared to $10.1 million in the prior year period.

•Second quarter 2023 Basic Earnings (Loss) per Share was $0.03 and Diluted Earnings per Share was $0.03, and year-to-date 2023 Basic Earnings per Share was $0.00 and year-to-date Diluted Earnings per Share was $0.00.

•Second quarter 2023 Adjusted EPS was $0.05, and year-to-date 2023 Adjusted EPS was $0.01.

2023 OUTLOOK — PIVOT TO PROFITABLE GROWTH

Despite the uncertain macro environment, we are off to a strong start to 2023 and are well positioned to deliver sustained profitable growth over the coming years. We are confident that the opportunities we have identified to monetize our addressable market will expand our share, and we have thoughtfully prioritized our growth initiatives in 2023 to significantly improve our profitability and fund our purpose to save driving and fuel car culture for future generations. For full year 2023, we anticipate:

•Total Revenue growth of 23-27% powered by Written Premium growth of 13-15%

•Sustain double-digit Written Premium growth trajectory

•Deliver an unmatched online and live Marketplace experience

•Drive loyalty, referrals and incremental revenue and profit from Membership

•Continued evolution into an integrated insurance business

•Increase Hagerty Re’s quota share reinsurance agreement in the U.S. & U.K. to ~80%

•Significantly improved profitability through cost containment measures and operational efficiencies

◦Net Income (Loss) of $(12)-8 million

◦Adjusted EBITDA of $60-80 million


		2023 Outlook		2023 Change vs 2022
	2022 Actuals	Low End Range	High End Range	Low End Range	High End Range
Total Revenue (in thousands)	$787,588	$968,000	$1,000,000	23%	27%
Total Written Premium (in thousands)	$776,664	$878,000	$894,000	13%	15%
Net Income (Loss) (in thousands)	$2,403	$(12,000)	$8,000	$(14,403)	$5,597
Adjusted EBITDA (in thousands)	$(1,940)	$60,000	$80,000	$61,940	$81,940

•The Company’s outlook on the May 9, 2023 first quarter earnings call was for Total Revenue growth of 22-26%, Written Premium growth of 11-13%, Net Income of $(13)-7 million and Adjusted EBITDA of $55-75 million

The definitions and reconciliations of non-GAAP financial measures are provided under the heading Key Performance Indicators and Certain Non-GAAP Financial Measures at the end of this press release.

Conference Call Details

Hagerty will hold a conference call to discuss the financial results today at 10:00 am Eastern Time. A webcast of the conference call, including the Company's Investor presentation highlighting second quarter and year-to-date 2023 financial results, will be available on Hagerty’s investor relations website at investor.hagerty.com. The dial-in for the conference call is (877) 423-9813 (toll-free) or (201) 689-8573 (international). Please dial the number 10 minutes prior to the scheduled start time.

A webcast replay of the call will be available at investor.hagerty.com following the call.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. These forward-looking statements reflect Hagerty’s current expectations and projections with respect to its expected future business and financial performance, including, among other things: (i) expected operating results, such as revenue growth and increases in earned premium; (ii) changes in the market for Hagerty’s products and services, (iii) Hagerty’s plans to expand market share, including planned investments and partnerships; (iv) anticipated business objectives; and (v) the strength of Hagerty’s business model. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "goal," "intend," "likely," "outlook," "plan," "potential," "project," "seek," "target," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning.

A number of factors could cause actual results or outcomes to differ materially from those indicated by these forward-looking statements. These factors include, among other things, Hagerty’s ability to: (i) compete effectively within its industry and attract and retain members; (ii) maintain key strategic relationships with its insurance distribution and underwriting carrier partners; (iii) prevent, monitor and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages with its technology platforms or third-party services; (v) accelerate the adoption of Hagerty’s membership products as well as any new insurance programs and products; (vi) manage the cyclical nature of the insurance business including through any periods of recession, economic downturn or inflation; (vii) address unexpected increases in the frequency or severity of claims; (vii) comply with the numerous laws and regulations applicable to Hagerty’s business, including state, federal and foreign laws relating to insurance and rate increases, privacy, the internet and accounting matters; (ix) manage risks associated with being a controlled company; and (x) other risks and uncertainties indicated from time to time in documents filed or to be filed with the Securities and Exchange Commission (the "SEC") by Hagerty.

The forward-looking statements herein represent the judgment of Hagerty as of the date of this release and Hagerty disclaims any intent or obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. This press release should be read in conjunction with the information included in the Company's other press releases, reports and other filings with the SEC. Understanding the information contained in these filings is important in order to fully understand Hagerty’s reported financial results and our business outlook for future periods.

About Hagerty, Inc. (NYSE: HGTY)

Hagerty is an automotive lifestyle brand committed to saving driving and fueling car culture for future generations. The company is a leading provider of specialty vehicle insurance, expert car valuation data and insights, live and digital car auction services, immersive events and automotive entertainment custom made for the 67 million Americans who self-describe as car enthusiasts. Hagerty also operates in Canada and the U.K. and is home to Hagerty Drivers Club, a community of nearly 800,000 who can’t get enough of cars. As a purpose-driven organization, Hagerty Impact aims to be a catalyst for positive change across the issues that matter most to our teams, our members, the broader automotive community, our shareholders and the planet at large. For more information, please visit www.hagerty.com or connect with us on Facebook, Instagram, Twitter and LinkedIn.

More information can be found at newsroom.hagerty.com.

Contact: Jay Koval, investor@hagerty.com

Hagerty Media Contact: Andrew Heller, aheller@hagerty.com

Category: Financial

Source: Hagerty

Hagerty, Inc.

Condensed Consolidated Statements of Operations (Unaudited)


	Three months ended June 30,
	2023		2022		$ Change		% Change

REVENUE:	in thousands (except percentages)
Commission and fee revenue	$	110,187	$	95,506	$	14,681	15.4	%
Earned premium	127,482		94,100		33,382		35.5	%
Membership, marketplace and other revenue	23,575		16,411		7,164		43.7	%
Total revenue	261,244		206,017		55,227		26.8	%
OPERATING EXPENSES:
Salaries and benefits	53,572		53,271		301		0.6	%
Ceding commission	60,350		45,255		15,095		33.4	%
Losses and loss adjustment expenses	53,564		38,620		14,944		38.7	%
Sales expense	41,941		37,455		4,486		12.0	%
General and administrative services	21,318		20,729		589		2.8	%
Depreciation and amortization	10,397		8,300		2,097		25.3	%
Restructuring, impairment and related charges, net	2,849		—		2,849		100.0	%
Total operating expenses	243,991		203,630		40,361		19.8	%
OPERATING INCOME (LOSS)	17,253		2,387		14,866		622.8	%
Change in fair value of warrant liabilities	(1,754)		(5,400)		3,646		67.5	%
Interest and other income (expense)	3,770		(353)		4,123		1,168.0	%
INCOME (LOSS) BEFORE INCOME TAX EXPENSE	19,269		(3,366)		22,635		672.5	%
Income tax benefit (expense)	(3,730)		(2,138)		(1,592)		74.5	%
Income (loss) from equity method investment, net of tax	—		(39)		39		100.0	%
NET INCOME (LOSS)	15,539		(5,543)		21,082		380.3	%
Net loss (income) attributable to non-controlling interest	(13,134)		7		(13,141)		(187,728.6)	%
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS	$	2,405	$	(5,536)	$	7,941	(143.4)	%

Earnings (loss) per share of Class A Common Stock:
Basic	$	0.03	$	(0.07)
Diluted	$	0.03	$	(0.07)

Weighted-average shares of Class A Common Stock outstanding:
Basic	84,371		82,452
Diluted	85,563		82,452

Hagerty, Inc.

Condensed Consolidated Statements of Operations (Unaudited)


	Six months ended June 30,
	2023		2022		$ Change		% Change

REVENUE:	in thousands (except percentages and per share amounts)
Commission and fee revenue	$	184,799	$	157,967	$	26,832	17.0	%
Earned premium	244,713		183,232		61,481		33.6	%
Membership, marketplace and other revenue	50,084		32,629		17,455		53.5	%
Total revenue	479,596		373,828		105,768		28.3	%
OPERATING EXPENSES:
Salaries and benefits	108,804		99,747		9,057		9.1	%
Ceding commission	115,775		87,633		28,142		32.1	%
Losses and loss adjustment expenses	101,976		75,539		26,437		35.0	%
Sales expense	77,054		65,892		11,162		16.9	%
General and administrative services	42,699		40,187		2,512		6.3	%
Depreciation and amortization	24,140		15,447		8,693		56.3	%
Restructuring, impairment and related charges, net	8,384		—		8,384		100.0	%
Total operating expenses	478,832		384,445		94,387		24.6	%
OPERATING INCOME (LOSS)	764		(10,617)		11,381		107.2	%
Change in fair value of warrant liabilities	(2,269)		26,286		(28,555)		(108.6)	%
Interest and other income (expense)	9,417		(1,037)		10,454		1,008.1	%
INCOME (LOSS) BEFORE INCOME TAX EXPENSE	7,912		14,632		(6,720)		(45.9)	%
Income tax benefit (expense)	(7,398)		(4,168)		(3,230)		77.5	%
Income (loss) from equity method investment, net of tax	—		(141)		141		100.0	%
NET INCOME (LOSS)	514		10,323		(9,809)		(95.0)	%
Net loss (income) attributable to non-controlling interest	(208)		11,648		(11,856)		(101.8)	%
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS	$	306	$	21,971	$	(21,665)	(98.6)	%

Earnings (loss) per share of Class A Common Stock:
Basic	$	—	$	0.27
Diluted	$	—	$	(0.02)

Weighted-average shares of Class A Common Stock outstanding:
Basic	83,820		82,443
Diluted	84,424		334,702

Hagerty, Inc.

Condensed Consolidated Balance Sheets (Unaudited)


	June 30, 2023		December 31, 2022

ASSETS	in thousands (except share amounts)
Current Assets:
Cash and cash equivalents	$	114,252	$	95,172
Restricted cash and cash equivalents	518,109		444,019
Accounts receivable	76,794		58,255
Premiums receivable	193,268		100,700
Commissions receivable	42,317		60,151
Notes receivable	30,991		25,493
Deferred acquisition costs, net	140,098		107,342
Other current assets	63,929		45,651
Total current assets	1,179,758		936,783
Notes receivable	11,885		11,934
Property and equipment, net	23,399		25,256
Lease right-of-use assets	77,640		82,398
Intangible assets, net	103,826		104,024
Goodwill	115,060		115,041
Other long-term assets	40,962		37,082
TOTAL ASSETS	$	1,552,530	$	1,312,518
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities	$	78,686	$	77,049
Losses payable and provision for unpaid losses and loss adjustment expenses	172,133		167,257
Commissions payable	101,739		77,075
Due to insurers	128,622		68,171
Advanced premiums	34,173		17,084
Unearned premiums	303,585		235,462
Contract liabilities	29,661		25,257
Total current liabilities	848,599		667,355
Long-term lease liabilities	77,084		80,772
Long-term debt	80,841		108,280
Warrant liabilities	47,830		45,561
Deferred tax liability	16,501		12,850
Contract liabilities	18,336		19,169
Other long-term liabilities	5,370		11,162
TOTAL LIABILITIES	1,094,561		945,149
Commitments and Contingencies	—		—
TEMPORARY EQUITY(1)
Preferred stock, $0.0001 par value (20,000,000 shares authorized, 8,483,561 Series A Convertible Preferred Stock issued and outstanding as of June 30, 2023 and no shares issued and outstanding as of December 31, 2022)	79,159		—
STOCKHOLDERS' EQUITY
Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 84,405,625 and 83,202,969 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)	8		8
Class V Common Stock, $0.0001 par value (300,000,000 authorized, 251,033,906 shares issued and outstanding as of June 30, 2023 and December 31, 2022)	25		25
Additional paid-in capital	556,595		549,034
Accumulated earnings (deficit)	(489,296)		(489,602)
Accumulated other comprehensive income (loss)	83		(213)
Total stockholders' equity	67,415		59,252
Non-controlling interest	311,395		308,117
Total equity	378,810		367,369
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY	$	1,552,530	$	1,312,518

(1) The Series A Convertible Preferred Stock is recorded within Temporary Equity because it has equity conversion and cash redemption features.

Hagerty, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Six months ended June 30,
	2023		2022

OPERATING ACTIVITIES:	in thousands
Net income (loss)	$	514	$	10,323
Adjustments to reconcile net income (loss) to net cash from operating activities:
Change in fair value of warrant liabilities	2,269		(26,286)
Depreciation and amortization expense	24,140		15,447
Provision for deferred taxes	3,480		2,553
Impairment of operating lease right-of-use assets	1,147		—
Loss on disposals of equipment, software and other assets	1,668		361
Share-based compensation expense	8,222		4,307
Other	958		229
Changes in operating assets and liabilities:
Accounts, premiums and commission receivable	(93,549)		(54,294)
Deferred acquisition costs	(32,756)		(23,307)
Losses payable and provision for unpaid losses and loss adjustment expenses	4,876		14,570
Commissions payable	24,664		14,795
Due to insurers	60,174		52,486
Advanced premiums	17,043		15,032
Unearned premiums	68,123		49,395
Other assets and liabilities, net	(20,416)		(15,686)
Net Cash Provided by Operating Activities	70,557		59,925
INVESTING ACTIVITIES:
Capital expenditures	(16,251)		(21,520)
Acquisitions, net of cash acquired	(7,084)		(13,520)
Purchase of previously held equity method investment	—		(15,250)
Issuance of notes receivable	(11,015)		—
Collection of notes receivable	6,235		—
Purchase of fixed income securities	(6,172)		(2,448)
Maturities of fixed income securities	2,964		1,216
Other investing activities	22		(1,639)
Net Cash Used in Investing Activities	(31,301)		(53,161)
FINANCING ACTIVITIES:
Payments on long-term debt	(99,250)		(91,500)
Proceeds from long-term debt	71,590		42,000
Proceeds from issuance of preferred stock, net of issuance costs	79,159		—
Contribution from non-controlling interest	600		1,000
Proceeds from issuance of common stock under employee stock purchase plan	906		—
Net Cash Provided by (Used in) Financing Activities	53,005		(48,500)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	909		(787)

Change in cash and cash equivalents and restricted cash and cash equivalents	93,170		(42,523)
Beginning cash and cash equivalents and restricted cash and cash equivalents	539,191		603,972
Ending cash and cash equivalents and restricted cash and cash equivalents	$	632,361	$	561,449

Hagerty, Inc.

Key Performance Indicators and Certain Non-GAAP Financial Measures

Key Performance Indicators

The tables below present a summary of our Key Performance Indicators, including important operational metrics, as well as certain GAAP and non-GAAP financial measures as of and for the periods presented. We use these Key Performance Indicators to evaluate our business, measure our performance, identify trends against planned initiatives, prepare financial projections and make strategic decisions. We believe these Key Performance Indicators are useful in evaluating the Company's performance when read together with our Condensed Consolidated Financial Statements prepared in accordance with GAAP.


	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Operational Metrics
Total Written Premium (in thousands)	$	275,895		$	237,697		$	458,745		$	392,487
Loss Ratio	42.0		%	41.0		%	41.7		%	41.2		%
New Business Count — Insurance	80,140			74,922			131,902			122,436








GAAP Measures
Total Revenue (in thousands)	$	261,244		$	206,017		$	479,596		$	373,828
Operating Income (Loss) (in thousands)	$	17,253		$	2,387		$	764		$	(10,617)
Net Income (Loss) (in thousands)	$	15,539		$	(5,543)		$	514		$	10,323
Basic Earnings (Loss) Per Share	$	0.03		$	(0.07)		$	—		$	0.27

Non-GAAP Financial Measures
Adjusted EBITDA (in thousands)	$	34,367		$	16,065		$	41,072		$	10,106
Adjusted Earnings (Loss) Per Share	$	0.05		$	—		$	0.01		$	(0.04)


	June 30, 2023		December 31, 2022
Operational Metrics
Policies in Force	1,365,718		1,315,977
Policies in Force Retention	88.0	%	88.0	%
Vehicles in Force	2,319,953		2,234,461
HDC Paid Member Count	791,895		752,754
Net Promoter Score (NPS)	83		83

Non-GAAP Financial Measures

Adjusted EBITDA

We define Adjusted EBITDA as consolidated Net income (loss) excluding interest and other income (expense), income tax (expense) benefit, and depreciation and amortization, adjusted to exclude (i) restructuring, impairment and related charges, net; (ii) changes in fair value of warrant liabilities; (iii) share-based compensation expense; (iv) when applicable, the net gain or loss from asset disposals; and (v) when applicable, certain other unusual items.

We present Adjusted EBITDA because we consider it to be an important supplemental measure of the Company’s performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management uses Adjusted EBITDA as a measure of the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations.

By providing this non-GAAP financial measure, together with a reconciliation to net income (loss), which is the most comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. However, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for net income (loss) or other financial statement data presented in our Condensed Consolidated Financial Statements as indicators of financial performance. Hagerty's Adjusted EBITDA may be determined or calculated differently than similarly titled measures of other companies in our industry, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies.

The following table reconciles Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022 to the most directly comparable GAAP measure, which is Net income (loss):


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022

	in thousands
Net income (loss)	$	15,539	$	(5,543)	$	514	$	10,323
Interest and other (income) expense	(3,770)		353		(9,417)		1,037
Income tax (benefit) expense	3,730		2,138		7,398		4,168
Depreciation and amortization	10,397		8,300		24,140		15,447
Restructuring, impairment and related charges, net	2,849		—		8,384		—
Change in fair value of warrant liabilities	1,754		5,400		2,269		(26,286)
Share-based compensation expense	4,018		4,307		7,934		4,307
Other unusual items(1)	(150)		1,110		(150)		1,110
Adjusted EBITDA	$	34,367	$	16,065	$	41,072	$	10,106

(1) Other unusual items includes a net legal settlement recovery recognized in the three and six months ended June 30, 2023 and non-restructuring severance expense recognized in the three and six months ended June 30, 2022.

The following table reconciles Adjusted EBITDA for the year ended December 31, 2023 Outlook to the most directly comparable GAAP measure, which is Net income (loss):


	2023 Low		2023 High

	in thousands
Net income (loss)	$	(12,000)	$	8,000
Interest and other (income) expense	(13,500)		(13,500)
Income tax (benefit) expense	14,300		14,300
Depreciation and amortization	43,047		43,047
Restructuring, impairment and related charges, net	8,383		8,383
Change in fair value of warrant liabilities	2,270		2,270
Share-based compensation expense	17,500		17,500
Adjusted EBITDA	$	60,000	$	80,000

Adjusted EPS

We define Adjusted Earnings (Loss) Per Share ("Adjusted EPS") as consolidated Net income (loss), less the change in fair value of our warrants divided by our outstanding and total potentially dilutive securities, which includes (i) the weighted-average issued and outstanding shares of Class A Common Stock; (ii) all issued and outstanding non-controlling interest Hagerty Group Units; (iii) all unexercised warrants; (iv) all unissued share-based compensation awards; and (v) all issued and outstanding shares of the Series A Convertible Preferred Stock.

In the third quarter of 2022, we began removing (i) the change in fair value of our warrants and (ii) the revaluation gain on previously held equity method investment from consolidated Net income (loss) for purposes of calculating Adjusted EPS. For comparability, references to prior period non-GAAP measures have been updated to show the effect of removing the change in the fair value of our warrants from Adjusted EPS. We believe this updated presentation of Adjusted EPS enhances investors' understanding of our financial performance from activities occurring in the ordinary course of our business.

The most directly comparable GAAP measure is basic earnings per share ("Basic EPS"), which is calculated as Net income (loss) available to Class A Common Stockholders divided by the weighted average number of Class A Common Stock shares outstanding during the period.

We present Adjusted EPS because we consider it to be an important supplemental measure of our operating performance and believe it is used by securities analysts, investors and other interested parties in evaluating the consolidated performance of other companies in our industry. We also believe that Adjusted EPS, which compares our consolidated Net income (loss) with our outstanding and potentially dilutive shares, provides useful information to investors regarding our performance on a fully consolidated basis.

Management uses Adjusted EPS:

•as a measurement of operating performance of our business on a fully consolidated basis;

•to evaluate the performance and effectiveness of our operational strategies; and

•as a preferred predictor of core operating performance, comparisons to prior periods and competitive positioning.

We caution investors that Adjusted EPS is not a recognized measure under GAAP and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, including Basic EPS, and that Adjusted EPS, as we define it, may be defined or calculated differently by other companies. In addition, Adjusted EPS has limitations as an analytical tool and should not be considered as a measure of profit or loss per share.

The following table reconciles Adjusted EPS to the most directly comparable GAAP measure, which is Basic EPS:


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022

	in thousands (except per share amounts)
Numerator:
Net income (loss) attributable to Class A Common Stockholders(1)	$	2,405	$	(5,536)	$	306	$	21,971
Net income (loss) attributable to non-controlling interest	13,134		(7)		208		(11,648)
Consolidated net income (loss)	15,539		(5,543)		514		10,323
Change in fair value of warrant liabilities	1,754		5,400		2,269		(26,286)
Adjusted consolidated net income (loss)(2)	$	17,293	$	(143)	$	2,783	$	(15,963)

Denominator:
Weighted average shares of Class A Common Stock outstanding — basic(1)	84,371		82,452		83,820		82,443
Total potentially dilutive securities outstanding:
Conversion of non-controlling interest Hagerty Group Units to Class A Common Stock	255,499		251,034		255,499		251,034
Conversion of Series A Convertible Preferred Stock to Class A Common Stock	6,785		—		6,785		—
Total warrants outstanding	19,484		19,484		19,484		19,484
Total unissued share-based compensation awards	7,022		6,851		7,022		6,851
Potentially dilutive shares outstanding	288,790		277,369		288,790		277,369
Fully dilutive shares outstanding(2)	373,161		359,821		372,610		359,812

Basic EPS = (Net income (loss) available to Class A Common Stockholders / Weighted-average shares of Class A Common Stock outstanding)(1)	$	0.03	$	(0.07)	$	—	$	0.27

Adjusted EPS = (Adjusted consolidated net income (loss) / Fully dilutive shares outstanding)(2)	$	0.05	$	—	$	0.01	$	(0.04)

(1) Numerator and Denominator of the GAAP measure Basic EPS

(2) Numerator and Denominator of the non-GAAP measure Adjusted EPS

HAGERTY Q2 2023 | 2 This presentation contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include all statements that are not historical facts. These forward- looking statements reflect our current expectations and projections with respect to our expected future business and financial performance, including, among other things: (i) expected operating results, such as revenue growth and financial position; (ii) changes in the market for our products and services; (iii) our plans to expand market share, including planned investments and partnerships; (iv) anticipated business objectives; and (v) the strength of our business model. These statements may be preceded by, followed by, or include the words “anticipate,” “believe,” “envision,” “estimate,” “expect,” “forecast,” “future,” “goal,” “intend,” “likely,” “outlook,” “plan,” “potential,” “project,” “seek,” “target,” “can,” “could,” “may,” “should,” “would,” “will,” the negatives thereof and other words and terms of similar meaning. A number of factors could cause actual results or outcomes to differ materially from those indicated by these forward-looking statements. These factors include, among other things, our ability to: (i) compete effectively within our industry and attract and retain members; (ii) maintain key strategic relationships with our insurance distribution and underwriting carrier partners; (iii) prevent, monitor and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages or other issues with our technology platforms or our use of third-party services; (v) accelerate the adoption of our membership products as well as any new insurance programs and products we offer; (vi) manage the cyclical nature of the insurance business, including through any periods of recession, economic downturn or inflation; (vii) address unexpected increases in the frequency or severity of claims; (viii) comply with the numerous laws and regulations applicable to our business, including state, federal, and foreign laws relating to insurance and rate increases, privacy, the internet and accounting matters; (ix) manage risks associated with being a controlled company; and (x) successfully defend any litigation, government inquiries and investigation. The forward-looking statements herein represent our judgment as of the date of this release and we disclaim any intent or obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. This presentation should be read in conjunction with the information included in our filings with the SEC and press releases. Understanding the information contained in these filings is important in order to fully understand our reported financial results and our business outlook for future periods. In addition, this presentation contains certain “non-GAAP financial measures”. The non-GAAP measures are presented for supplemental informational purposes only. Reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP are provided in the appendix to this presentation. FORWARD LOOKING STATEMENTS / NON-GAAP FINANCIAL MEASURES

HAGERTY Q2 2023 | 3 Total Revenue growth of 28% Written Premium growth of 17% Improved Profitability » Adjusted EBITDA of $41 million compared to $10 million in the prior year period » Net Income of $1 million compared to $10 million in the prior year period » Raised $105 million in capital on June 23, 2023 » $80 million in convertible preferred equity and a $25 million commitment for Hagerty Re Limited Pivot to significantly improved profitability fueled by top- line momentum, cost containment & efficiency measures » Total Revenue growth of 23-27% » Written Premium growth of 13-15% » Net Income (Loss) of $(12)-8 million » Adjusted EBITDA (1) of $60-80 million 1 See Appendix for additional information regarding this non-GAAP financial measure. Y TD Q2 2023 HIGHLIGHTS INCREASED 2023 OUTLOOK The Company’s outlook on the May 9, 2023 first quarter earnings call was for Total Revenue growth of 22-26%, Written Premium growth of 11-13%, Net Income of $(13)-7 million and Adjusted EBITDA of $55-75 million

HAGERTY Q2 2023 | 4 » Hagerty Marketplace is a top focus area in 2023 as we seek to provide an unmatched online and live Marketplace experience for consumers. » Our Marketplace is positioned as the trusted brand for auto enthusiasts, offering certification services, title and escrow, financing options and other high-value services that differentiate our product from competitors. » Large and growing market opportunity with ~300,000 cars transacting for ~$12.5 billion through Hagerty’s insurance book during 2022. » Direct revenue from live auctions, private sales, online marketplace as well as financing options » Proven leadership team with strong cultural fit HAGERT Y MARKETPLACE » Other material opportunities include insurance sales and Hagerty Driver’s Club (HDC) memberships

HAGERTY Q2 2023 | 5 » Digital and technology teams are progressing through the testing phase and regulatory approval process » Expect to begin activating State Farm’s ~19,500 agents in 2023, including offering State Farm Classic+ policies and Hagerty Drivers Club in four states in the fall of 2023 » Anticipated average annual revenue per customer: $85-$110 » State Farm aligned in the success of the 10-year commercial partnership with an initial $500 million investment in Hagerty in 2021 as well as an additional $50 million investment in June of 2023 and $25 million commitment of long-term financing » 480,000+ existing collector car policies plus up to 75% HDC enrollment possible on new insurance policies HAGERT Y + STATE FARM PARTNERSHIP

Strong top-line momentum expected to continue in 2023 with significantly improved profitability Total Revenue growth of 23-27% powered by Written Premium growth of 13-15% » Sustain double-digit Written Premium growth trajectory » Deliver an unmatched online and live Marketplace experience » Drive loyalty, referrals and incremental revenue and profit from Membership Continued evolution into an integrated insurance business » Increase Hagerty Re’s quota share reinsurance agreement in the U.S. and U.K. to ~80% Significantly improved profitability ($60 million to $80 million in Adjusted EBITDA1) through cost containment measures and operational efficiencies 1 See Appendix for additional information regarding this non-GAAP measure. 2023 PRIORITIES HAGERTY Q1 2023 | 6

HAGERTY Q2 2023 | 71 See Appendix for additional information regarding this non-GAAP measure. Y TD Q2 2023 FINANCIAL HIGHLIGHTS 17% 28% $480M $459M 41.7% 88.0% $1M $41M $1M $0.00

HAGERTY Q2 2023 | 8 1 Includes base commissions, payment plan fees and contingent underwriting commissions. 2 Currently applies to U.S. and U.K. programs. Generally described as an arrangement where underwriting risk and profit is shared proportionately. $206 $261 $94 $127 $16 $24 $96 $110 Q2 2022 Q2 2023 $374 $480 $183 $245 $33 $50 $158 $185 YTD Q2 2022 YTD Q2 2023 M illi on s Total Revenue Commission + fee revenue1 Membership, marketplace + other revenue Earned premium in Hagerty Reinsurance 15% 17% 44% 53% 35% 34% Growth GrowthGROWTH 27% GROWTH 28% Q2 2023 YTD Commission + fee revenue (+17%) » Written premium growth of 17% » Policies in Force retention of 88% Membership, marketplace + other revenue (+53%) » Membership revenue growth of 20% » Marketplace delivered $12 million in revenue » 77% of new insurance customers join HDC Earned premium in Hagerty Reinsurance (+34%) » Contractual quota share2 increased to ~80% in 2023 YTD Q2 2023 Highlights REVENUE COMPONENTS

HAGERTY Q2 2023 | 9 1 Other unusual items includes a net legal settlement recovery recognized in the three and six months ended June 30, 2023 and non-restructuring severance expense recognized in the three and six months ended June 30, 2022. 2 See Appendix for additional information regarding this non-GAAP financial measure. $(6) $16 $10 $1 $16 $34 $10 $41 Q2 2022 Q2 2023 YTD Q2 2022 YTD Q2 2023 Adjusted EBITDA Net Income (Loss) M illi on s Adjusted EBITDAQ2 YTD IN THOUSANDS Q2 2023 Q2 2022 YTD 2023 YTD 2022 Net income (loss) $15,539 ($5,543) $514 $10,323 Interest and other (income) expense (3,770) 353 (9,417) 1,037 Income tax (benefit) expense 3,730 2,138 7,398 4,168 Depreciation and amortization 10,397 8,300 24,140 15,447 Restructuring, impairment and related charges, net 2,849 — 8,384 — Change in fair value of warrant liabilities 1,754 5,400 2,269 (26,286) Share-based compensation expense 4,018 4,307 7,934 4,307 Other unusual items1 (150) 1,110 (150) 1,110 Adjusted EBITDA2 $34,367 $16,065 $41,072 $10,106 EARNINGS ANALYSIS

HAGERTY Q2 2023 | 10 Strong top-line momentum expected to continue in 2023 with significantly improved profitability 2022 Results 2023 Outlook 2022 Results vs 2023 Outlook IN THOUSANDS Low End Range High End Range Low End Range High End Range Total Revenue $787,588 $968,000 $1,000,000 23% 27% Total Written Premium $776,664 $878,000 $894,000 13% 15% Net Income (Loss) $2,403 ($12,000) $8,000 ($14,403) $5,597 Adjusted EBITDA1 ($1,940) $60,000 $80,000 $61,940 $81,940 1 See Appendix for additional information regarding this non-GAAP financial measure. Strong top-line momentum expected to continue in 2023 with significantly improved profitability 2023 OUTLOOK

HAGERTY Q2 2023 | 11 RAISING CAPITAL TO DRIVE GROWTH AND VALUE CREATION $80M of capital raised at Hagerty, Inc. to support strategic growth initiatives $25M of Tier 2 capital at Hagerty Re provided by State Farm Strong sponsorship from existing strategic investors »$50M from State Farm »$15M from Markel Hagerty family investment of $15M Attractive opportunity to deploy capital to drive profitable growth and returns: »Establish new products to offer differentiated solutions to car enthusiasts »Support growing Marketplace business including Broad Arrow Capital’s lending activity »Working capital as Hagerty continues to pivot to sustainable profitability by creating a scalable platform for growth in Insurance and Membership »Bolsters cash and liquidity ($252M as of June 30, 2023 with $114M in cash and cash equivalents and $138M available under credit facility) Support growth in our quota share risk taking with Essentia Prepare to take direct risk as we evolve to become a more integrated insurance business Support our efforts to obtain a credit agency rating for Hagerty Re

HAGERTY Q2 2023 | 13 Total Written Premium New Business Count (Insurance) $ IN THOUSANDS Q1 Q2 Q3 Q4 Total 2018 82,514 137,943 123,385 86,621 430,463 2019 96,732 158,501 142,030 99,747 497,010 2020 112,421 184,423 163,520 117,870 578,234 2021 133,707 208,091 192,091 140,417 674,306 2022 154,790 237,697 222,136 162,041 776,664 5 Year Average Total Written Premium % 20% 31% 29% 20% 100% Q1 Q2 Q3 Q4 Total 2018 32,610 56,729 51,795 35,356 176,490 2019 36,848 62,842 57,426 37,585 194,701 2020 41,510 70,622 73,619 50,914 236,665 2021 51,799 77,013 68,077 47,589 244,478 2022 47,514 74,922 68,561 43,523 234,520 5 Year Average New Business Count % 19% 32% 29% 20% 100% 0 50 100 150 200 250 0 10 20 30 40 50 60 70 80 90 North American footprint creates seasonal differences by quarter for written premium and new business count HISTORICAL SEASONALIT Y TRENDS

HAGERTY Q2 2023 | 14 Guest User Counts Q2 2022 Q2 2023 U.S. 1,158,944 1,259,367 Canada 77,139 83,157 9% growth Total Guest User Count 1,236,083 1,342,524 Guest User An individual who has created an online profile by providing email, establishing a password, and verifying email. Paid Membership Counts U.S. Q2 2022 Q2 2023 Insurance Member 454,388 476,401 Insurance + HDC 653,095 696,274 HDC Standalone 29,844 32,537 Total U.S. Paid Member Count 1,137,327 1,205,212 Canada Insurance Member 81,768 84,666 Insurance + HDC 57,109 61,978 HDC Standalone 2,777 1,106 Total Canada Paid Member Count 141,654 147,750 Total Insurance Member 536,156 561,067 Insurance + HDC 710,204 758,252 HDC Standalone 32,621 33,643 Total HDC Paid Member Count 742,825 791,895 7% growth Total Paid Member Count 1,278,981 1,352,962 6% growth 1.4 million Paid Members (+6%) HAGERT Y MEMBERSHIP Total Member Count

HAGERTY Q2 2023 | 15 Adjusted EBITDA We define Adjusted EBITDA as consolidated Net income (loss) excluding interest and other income (expense), income tax (expense) benefit, and depreciation and amortization, adjusted to exclude (i) restructuring, impairment and related charges, net; (ii) changes in fair value of warrant liabilities; (iii) share-based compensation expense; (iv) when applicable, the net gain or loss from asset disposals; and (v) when applicable, certain other unusual items. We present Adjusted EBITDA because we consider it to be an important supplemental measure of the Company's performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management uses Adjusted EBITDA as a measure of the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations. By providing this non-GAAP financial measure, together with a reconciliation to net income (loss), which is the most comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. However, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for net income (loss) or other financial statement data presented in our Condensed Consolidated Financial Statements as indicators of financial performance. Hagerty's Adjusted EBITDA may be determined or calculated differently than similarly titled measures of other companies in our industry, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies. IN THOUSANDS Q2 2023 Q2 2022 YTD 2023 YTD 2022 Net income (loss) $15,539 ($5,543) $514 $10,323 Interest and other (income) expense (3,770) 353 (9,417) 1,037 Income tax (benefit) expense 3,730 2,138 7,398 4,168 Depreciation and amortization 10,397 8,300 24,140 15,447 Restructuring, impairment and related charges, net 2,849 — 8,384 — Change in fair value of warrant liabilities 1,754 5,400 2,269 (26,286) Share-based compensation expense 4,018 4,307 7,934 4,307 Other unusual items (150) 1,110 (150) 1,110 Adjusted EBITDA $34,367 $16,065 $41,072 $10,106 RECONCILIATION OF NON-GAAP METRICS Net Income (Loss) to Adjusted EBITDA

HAGERTY Q2 2023 | 16 Adjusted EPS The most directly comparable GAAP measure is basic earnings per share ("Basic EPS"), which is calculated as Net income (loss) available to Class A Common Stockholders divided by the weighted average number of Class A Common Stock shares outstanding during the period. We caution investors that Adjusted EPS is not a recognized measure under GAAP and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, including Basic EPS, and that Adjusted EPS, as we define it, may be defined or calculated differently by other companies. In addition, Adjusted EPS has limitations as an analytical tool and should not be considered as a measure of profit or loss per share. 1 Numerator and Denominator of the GAAP measure Basic EPS 2 Numerator and Denominator of the non-GAAP measure Adjusted EPS IN THOUSANDS (EXCEPT PER SHARE AMOUNTS) Q2 2023 Q2 2022 YTD 2023 YTD 2022 Numerator: Net income (loss) attributable to Class A Common Stockholders1 $2,405 ($5,536) $306 $21,971 Net income (loss) attributable to non-controlling interest 13,134 (7) 208 ($11,648) Consolidated net income (loss) $15,539 ($5,543) $514 $10,323 Change in fair value of warrant liabilities 1,754 5,400 2,269 ($26,286) Adjusted consolidated net income (loss)2 $17,293 ($143) $2,783 ($15,963) Denominator: Weighted-average shares of Class A Common Stock Outstanding - basic1 84,371 82,452 83,820 82,443 Total potentially dilutive shares outstanding: Conversion of non-controlling interest Hagerty Group Units to Class A Common Stock 255,499 251,034 255,499 251,034 Conversion of Series A Convertible Preferred Stock to Class A Common Stock 6,785 — 6,785 — Total warrants outstanding 19,484 19,484 19,484 19,484 Total unissued share-based compensation awards 7,022 6,851 7,022 6,851 Potentially dilutive shares outstanding 288,790 277,369 288,790 277,369 Fully dilutive shares outstanding2 373,161 359,821 372,610 359,812 Basic Earnings (Loss) per Share1 $0.03 ($0.07) $— $0.27 Adjusted Earnings (Loss) per Share2 $0.05 $— $0.01 ($0.04) In the third quarter of 2022, we began removing (i) the change in fair value of our warrants and (ii) the revaluation gain on previously held equity method investment from consolidated Net income (loss) for purposes of calculating Adjusted EPS. For comparability, references to prior period non-GAAP measures have been updated to show the effect of removing the change in the fair value of our warrants from Adjusted EPS. We believe this updated presentation of Adjusted EPS enhances investors' understanding of our financial performance from activities occurring in the ordinary course of our business.. We define Adjusted Earnings (Loss) Per Share ("Adjusted EPS") as consolidated Net income (loss), less the change in fair value of our warrants divided by our outstanding and total potentially dilutive securities, which includes (i) the weighted-average issued and outstanding shares of Class A Common Stock; (ii) all issued and outstanding non-controlling interest Hagerty Group Units; (iii) all unexercised warrants; (iv) all unissued share-based compensation awards; and (v) all issued and outstanding shares of the Series A Convertible Preferred Stock. Basic Earnings (Loss) Per Share to Adjusted Earnings (Loss) Per Share RECONCILIATION OF NON-GAAP METRICS

HAGERTY Q2 2023 | 17 Adjusted EBITDA By providing this non-GAAP financial measure, together with a reconciliation to net income (loss), which is the most comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. However, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for net income (loss) or other financial statement data presented in our Condensed Consolidated Financial Statements as indicators of financial performance. Hagerty's Adjusted EBITDA may be determined or calculated differently than similarly titled measures of other companies in our industry, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies. IN THOUSANDS 2023 Low 2023 High Net Income (Loss) ($12,000) $8,000 Interest and Other (Income) Expense (13,500) (13,500) Income Tax (Benefit) Expense 14,300 14,300 Depreciation and Amortization 43,047 43,047 Restructuring, Impairment and Related Charges, Net 8,383 8,383 Change in Fair Value of Warrant Liabilities 2,270 2,270 Share-based Compensation Expense 17,500 17,500 Adjusted EBITDA $60,000 $80,000 We present Adjusted EBITDA because we consider it to be an important supplemental measure of the Company's performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management uses Adjusted EBITDA as a measure of the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations. We define Adjusted EBITDA as consolidated Net income (loss) excluding interest and other income (expense), income tax (expense) benefit, and depreciation and amortization, adjusted to exclude (i) restructuring, impairment and related charges, net; (ii) changes in fair value of warrant liabilities; (iii) share-based compensation expense; (iv) when applicable, the net gain or loss from asset disposals; and (v) when applicable, certain other unusual items. Net Income (Loss) to Adjusted EBITDA RECONCILIATION OF NON-GAAP METRICS | 2023 OUTLOOK

Cover	Aug. 08, 2023
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Aug. 08, 2023
Entity Registrant Name	HAGERTY, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-40244
Entity Address, Address Line One	121 Drivers Edge
Entity Address, City or Town	Traverse City
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	49684
City Area Code	(800)
Local Phone Number	922-4050
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001840776
Amendment Flag	false
Entity Tax Identification Number	86-1213144
Common Class A
Entity Information [Line Items]
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Trading Symbol	HGTY
Security Exchange Name	NYSE
HGTY:WarrantsEachWholeWarrantExercisePriceof11.50PerShareMember
Entity Information [Line Items]
Title of 12(b) Security	Warrants, each whole warrant exercisable for one shareof Class A common stock, each at an exercise price of$11.50 per share
Trading Symbol	HGTY.WS
Security Exchange Name	NYSE