Executives from Traverse City, Michigan-based Hagerty Inc., an insurance company offering special policies for automotive enthusiast, rang the bell to open trading on the New York Stock Exchange Dec. 6.
The listing on the NYSE follows the completion of Hagerty’s business combination with Aldel Financial Inc., a publicly traded special purpose acquisition company or SPAC. Aldel shareholders approved the business combination at a special meeting held last week.
Hagerty’s SPAC merger with Aldel included a commitment of $704 million in financing led by strategic investors State Farm and Markel Corp. as well as a group of institutional and private investors.
In recent years, Hagerty has emerged not only as specialist in insurance the vehicles owned by collectors but as something of a lifestyle brand focused on the enthusiast market with its sponsorship of Hagerty Drivers Club, a magazine with a readership of 1.2 million, Hagerty YouTube with 1.75 million subscribers, a nationwide collection of premium social and car storage membership facilities called Hagerty Garage + Social, and a DriveShare, a peer-to-peer service that lets people rent vintage and cool cars.
Products aimed at enthusiast community
Earlier this year, Hagerty took over operation of the Concours d’Elegance America, which will move from a location in suburban Detroit to the grounds of the Detroit Institute of Arts in the center of the city.
Hagerty also is now the producer of two prestigious Concours held annually on the East Coast in Greenwich, Connecticut and Amelia Island, Florida. It also stages events such as the California Mille and the Motorworks Revival.
“Today is a milestone for Hagerty and a testament to the talent and dedication of the entire Hagerty team and their commitment to our purpose of saving driving and car culture for future generations,” said McKeel Hagerty, the company’s CEO.
“We have built the company to optimize growth across the vast automotive enthusiast market, which today stands strong at an estimated 69 million enthusiasts in the U.S. alone. Our goal is not only to provide car lovers with great insurance but to help them connect with one another and have fun with their cars. We are focused on preserving the parts of driving that created American car culture in the first place — family, fun, community, competition, road trips and so much more,” he said.
Strong business model fuels growth
Hagerty also said being listed on the NYSE marks the start of an exciting new chapter in Hagerty’s history and the capital necessary to advance its strategy, which remains focused on investing in the company’s digital user experience to support and accelerate growth in its membership base, while expanding our portfolio of engaging and exciting car-focused events and services.
“We believe this strategy will create rewarding new experiences for car lovers and sustainable value for our shareholders over the long term,” he said.
Hagerty is now a leading provider of specialty automotive insurance with approximately 2 million cars insured globally, and partnerships with nine of the top 10 U.S. automotive insurers.
The company’s business model has led to a record of consistent success, officials note, including a 29% compounded annual revenue growth rate from 2018 to 2020, strong customer retention at 90% and an average loss ratio of 41%, which is significantly lower than U.S. personal lines auto insurance industry’s 76 percent.
In addition, Hagerty’s highly differentiated membership model helps to drive loyalty and retention by engaging, entertaining and connecting with members at every stop of their journey — digitally, on the track, in the garage, at an event or on the road, according to the company’s executives.
J.P. Morgan Securities seved as financial advisor to Hagerty and Global Leisure Partners LLC (GLP) and ThinkEquity LLC (ThinkEquity) are serving as financial advisor to Aldel in connection with the business combination.
