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Hagerty posts $5 million first-half net loss as transitional costs rise
Transitional costs tied to the Markel Fronting Arrangement totaled $153 million, but adjusted EBITDA rose 32% to $160 million and Hagerty lifted its full-year net income outlook to $18 million to $30 million.
Hagerty reported a first-half net loss of $5 million, down from net income of $74 million a year earlier, with the decline driven by $153 million of transitional costs tied to the Markel Fronting Arrangement, primarily the amortization of deferred ceding commissions on policies written before 2026, according to Coverager.
The insurer said those transitional costs are expected to run off by year-end, while underlying performance strengthened, including a 32% increase in adjusted EBITDA to $160 million, a 19% rise in written premium, and a 91% jump in operating cash flow.
Hagerty also raised its full-year net income outlook to $18 million to $30 million and guided to written premium growth of 16% to 17% this year, with adjusted EBITDA expected to land in the $270 million to $280 million range.
Coverager added that Hagerty’s partnership with State Farm is shifting from new business generation to large-scale policy conversions, with agents selling Hagerty policies in 37 states and collector car portfolio conversions underway and expected to continue into 2028.