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Hagerty ends Markel fronting deal and keeps underwriting economics
The carrier reported first-half 2026 written premium of $713 million, plus a first-half net loss of $5 million driven by $153 million in transitional costs tied to the Markel arrangement.
Insurance Business reports Hagerty, Inc. has ended its fee-based fronting arrangement with Markel, opting to retain 100% of its underwriting and investment economics rather than ceding risk to a front.
The outlet says the decision comes amid heightened regulatory scrutiny of fronting carriers following the 2023 collapse of insurtech Vesttoo, which involved about $3.36 billion in forged letters of credit backing reinsurance transactions. It adds that while the NAIC has not adopted a model act specifically targeting fronting carriers, states are using existing MGAs and Credit for Reinsurance model acts more actively to review these programs, making brokers and MGA partners more likely to face examinations and higher compliance costs at renewal.
Hagerty reported written premium growth of 19% to $713 million for the first half of 2026. It also posted a net loss of $5 million, largely attributable to $153 million in pre-tax transitional costs tied to the Markel arrangement, with those costs deferred ceding commissions for policies written before January 1, 2026 and amortized across 2026.
Insurance Business also notes Hagerty is set to complete its acquisition of Bennetts, the UK’s second-largest specialty motorcycle insurance broker, in the third quarter of 2026. The deal agreed at £34 million with Lucida Group is expected to triple Hagerty’s UK revenue to approximately £25 million as part of a broader shift toward carriers buying distribution to capture more of the economics.