Segment Reporting and Disaggregated Revenue

3 Months Ended

Mar. 31, 2026

Revenue from Contract with Customer [Abstract]

Segment Reporting and Disaggregated Revenue

5 — Segment Reporting and Disaggregated Revenue

Segment Reporting

Due to the continued revenue growth and recent geographic expansion of Hagerty's marketplace business, beginning in the fourth quarter of 2025, the Company updated its segment reporting to reflect two operating and reportable segments: Insurance and Marketplace. Previously, the Company operated as a single operating and reportable segment. Prior period segment information has been recast to conform to the current presentation in this Quarterly Report.

The Insurance segment principally includes the Company's reinsurance and MGA operations, as well as its membership, events and media activities which support and enhance its insurance offerings. The Marketplace segment offers a trusted marketplace where automotive enthusiasts can buy, sell, and finance collector cars.

The Company's Chief Executive Officer ("CEO") and Chairman of its Board of Directors ("the Board") acts as the Chief Operating Decision Maker ("CODM"). The CODM evaluates performance and makes resource allocation decisions about the Company's reportable segments using a number of measures, including income before taxes, which is the Company's measure of segment profitability.

The CODM regularly receives information about the significant expenses of each reportable segment, including (i) Losses and loss adjustment expenses, net; (ii) Policy acquisition costs, net; (iii) Underwriting and other insurance expenses; (iv) Selling, general, and administrative expenses; and (v) Interest expense and other, net. These expenses are not regularly used by the CODM on a disaggregated basis for purposes of evaluating segment profitability. The Company does not report total assets by segment for internal or external reporting purposes as the Company's CODM does not receive segment balance sheets or assess performance, make strategic decisions, or allocate resources based on assets.

Income (loss) before taxes for each segment includes an allocation of attributable shared service expenses. Certain corporate expenses are excluded from segment income (loss) before taxes as they are not attributable to the operations of the reportable segments. These unallocated expenses are included in the reconciliation of total segment income (loss) before taxes to consolidated income (loss) before taxes below.

The tables below presents the Company's segment information for the three months ended March 31, 2026 and 2025:

	Three months ended March 31, 2026
	Insurance		Marketplace		Total
REVENUES:	(in thousands)
Earned premium, net	$	239,642	$	—	$	239,642
Commission and fee revenue	16,435		—		16,435
Marketplace revenue	—		25,652		25,652
Membership and other revenue	22,127		—		22,127
Net investment income	10,014		249		10,263
Net investment losses	(2,289)		—		(2,289)
Total revenue	285,929		25,901		311,830
EXPENSES:
Losses and loss adjustment expenses, net	97,919		—		97,919
Policy acquisition costs, net	101,922		—		101,922
Underwriting and other insurance expenses	59,588		—		59,588
Selling, general, and administrative expenses	46,866		25,272		72,138
Interest expense and other, net	(16)		(157)		(173)
Total segment expenses	306,279		25,115		331,394
Segment income (loss) before taxes	(20,350)		786		(19,564)
Corporate expenses					(278)
Interest expense					(1,095)
Loss before taxes					$	(20,937)

	Three months ended March 31, 2025
	Insurance		Marketplace		Total
REVENUES:	(in thousands)
Earned premium, net	$	169,355	$	—	$	169,355
Commission and fee revenue	100,287		—		100,287
Marketplace revenue	—		29,086		29,086
Membership and other revenue	20,865		—		20,865
Net investment income	8,883		175		9,058
Net investment losses	(315)		—		(315)
Total revenue	299,075		29,261		328,336
EXPENSES:
Losses and loss adjustment expenses, net	71,130		—		71,130
Policy acquisition costs, net	77,333		—		77,333
Underwriting and other insurance expenses	1,357		—		1,357
Selling, general, and administrative expenses	115,941		27,839		143,780
Interest expense and other, net	412		(116)		296
Total segment expenses	266,173		27,723		293,896
Segment income before taxes	32,902		1,538		34,440
Corporate expenses					(265)
Interest expense					(1,393)
Income before taxes					$	32,782

Disaggregation of Revenue

The following tables present revenues from customer contracts that are recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), disaggregated by geographic area, as well as a reconciliation to total revenue for the three months ended March 31, 2026 and 2025:

	Three months ended March 31, 2026
	Insurance		Marketplace		Total
	in thousands
United States	$	30,978	$	17,031	$	48,009
International	7,584		5,500		13,084
Total revenue from customer contracts	38,562		22,531		61,093
Earned premium, net	239,642		—		239,642
Net investment income	10,014		249		10,263
Net investment losses	(2,289)		—		(2,289)
Finance revenue	—		3,121		3,121
Total revenue	$	285,929	$	25,901	$	311,830

	Three months ended March 31, 2025
	Insurance		Marketplace		Total
	in thousands
United States	$	115,300	$	26,095	$	141,395
International	5,852		1,145		6,997
Total revenue from customer contracts	121,152		27,240		148,392
Earned premium, net	169,355		—		169,355
Net investment income	8,883		175		9,058
Net investment losses	(315)		—		(315)
Finance revenue	—		1,846		1,846
Total revenue	$	299,075	$	29,261	$	328,336

Commission and fee revenue is earned through two distribution channels: direct and agent. Revenue earned from the direct distribution channel includes revenue generated by Hagerty's employee agents. Revenue earned from the agent distribution channel includes revenue generated through the Company's insurance distribution partnerships, as well as its relationships with independent agents and brokers. The tables below present the Company's revenue by distribution channel for the three months ended March 31, 2026 and 2025:

	Three months ended March 31, 2026
	Agent		Direct		Total
	in thousands
Commission and fee revenue	$	9,812	$	3,915	$	13,727
Contingent commission	1,415		1,293		2,708
Total commission and fee revenue	$	11,227	$	5,208	$	16,435

	Three months ended March 31, 2025
	Agent		Direct		Total
	in thousands
Commission and fee revenue	$	49,092	$	40,078	$	89,170
Contingent commission	5,784		5,333		11,117
Total commission and fee revenue	$	54,876	$	45,411	$	100,287

Refer to Note 13 — Reinsurance for information regarding "Earned premium, net", Note 6 — Investments for information regarding "Net investment income" and "Net investment losses", and Note 8 — Notes Receivable for information regarding "Finance revenue".

Contract Assets

Contract assets, primarily consisting of CUC receivables, are reported within "Other assets" on the Condensed Consolidated Balance Sheets. As of March 31, 2026 and December 31, 2025, the Company had contract assets of $4.5 million and $18.2 million, respectively. The decrease as of March 31, 2026 is primarily a result of the Markel Fronting Arrangement, as the Company no longer earns a CUC from policies issued by Essentia.

Contract Liabilities

Contract liabilities consist of cash collected in advance of revenue recognition and primarily relates to the unrecognized portion of HDC membership fees, the unrecognized portion of the advanced commission payment received from State Farm Mutual Automobile Insurance Company ("State Farm"), and, to a much lesser extent, cash collected in advance of the completion of marketplace private sales. As of March 31, 2026 and December 31, 2025, the Company had contract liabilities of $46.4 million and $46.5 million, respectively.