v3.25.2
Related-Party Transactions
 6 Months Ended
Jun. 30, 2025
Related Party Transactions [Abstract]  
Related-Party Transactions
21 — Related-Party Transactions

As of June 30, 2025, Markel and State Farm had the following equity interests in Hagerty and, as a result, are considered related parties:

Markel
State Farm
Equity InterestShares/Units
Percentage of total outstanding (1)
Shares/Units
Percentage of total outstanding (1)
Hagerty, Inc. Class A Common Stock3,108,000 3.4 %51,800,000 57.1 %
Hagerty, Inc. Class V Common Stock75,000,000 29.9 %— — %
Hagerty, Inc. Series A Convertible Preferred Stock1,590,668 18.8 %5,302,226 62.5 %
THG units
75,000,000 21.7 %— — %
Controlling interest3,108,000 3.4 %51,800,000 57.1 %
Non-controlling interest75,000,000 29.4 %— — %
(1)    The percentages reflected represent only the ownership of the specific security identified in each row, and are not reflective of the total economic ownership in Hagerty.

Refer to Note 17 — Stockholders' Equity and Note 16 — Convertible Preferred Stock for a description of each equity interest in the table above.
Markel

Alliance Agreement

The Company and Markel have an alliance agreement (the "Markel Alliance Agreement") and associated agency agreement pursuant to which policies sold by Hagerty's U.S. MGAs are underwritten by Essentia Insurance Company and reinsured with Evanston Insurance Company ("Evanston"), both of which are wholly owned subsidiaries of Markel.

The following tables provide information related to Markel-affiliated "Commission revenue" and "Due to insurer" liabilities associated with the Markel Alliance Agreement:

Three months ended
June 30,		Six months ended
June 30,
2025202420252024
in thousands (except percentages)
Commission revenue$127,454 $115,975 $221,427 $199,644 
Percent of total91 %92 %92 %93 %

June 30,December 31,
20252024
in thousands (except percentages)
Due to insurer$135,906 $78,792 
Percent of total89 %94 %

Refer to Note 4 — Revenue for information on related party balances within "Commissions receivable," which primarily consist of CUC receivables due from Markel.
Reinsurance Agreement

Hagerty Re has a quota share agreement with Evanston to assume approximately 80% of the risks written through the Company's U.S. MGAs, with the exception of High-Net-Worth Accounts in which Hagerty Re assumes 100% of the risk. Refer to Note 14 — Reinsurance for additional information on the Company's reinsurance programs.
The following tables summarize all balances related to the Company's reinsurance business with Markel subsidiaries:

Three months ended
June 30,		Six months ended
June 30,
2025202420252024
Revenue:in thousands
Earned premium$182,913 $162,536 $357,974 $318,656 
Expenses:
Ceding commission, net$84,868 $75,033 $164,335 $147,396 
Losses and loss adjustment expenses74,598 64,266 154,509 129,421 
Total expenses$159,466 $139,299 $318,844 $276,817 

June 30,December 31,
20252024
Assets:in thousands
Premiums receivable$236,368 $150,436 
Commissions receivable1,777 489 
Deferred acquisition costs, net180,745 160,360 
Other current assets4,947 2,926 
Total assets$423,837 $314,211 
Liabilities:
Accounts payable, accrued expenses and other current liabilities$3,214 $806 
Losses payable and provision for unpaid losses and loss adjustment expenses244,779 254,422 
Ceding commissions payable107,428 76,001 
Unearned premiums393,676 347,501 
Total liabilities$749,097 $678,730 

Pursuant to the terms of the quota share agreement with Evanston, Hagerty Re maintains assets in trust for the benefit of Evanston. These assets are included within "Restricted cash and cash equivalents" and "Investments" on the Company's Condensed Consolidated Balance Sheets. The assets held in trust for the benefit of Evanston totaled $584.3 million and $589.2 million as of June 30, 2025 and December 31, 2024, respectively.
State Farm

Alliance Agreement

Hagerty has a 10-year master alliance agreement and associated managing general underwriter agreement with State Farm, under which State Farm Classic+ policies are offered to State Farm's customers through State Farm agents. This program began issuing policies in certain states in September 2023. Several states were added in the first half of 2025, with additional states planned for the remainder of 2025 and 2026. Under the master alliance agreement, State Farm paid Hagerty an advanced commission of $20.0 million, which is being recognized as "Commission and fee revenue" over the remaining life of the arrangement. In addition, the Company is paid a commission for underwriting, binding coverage, and issuing State Farm Classic+ policies and can offer HDC memberships to State Farm Classic+ customers, providing Hagerty with an additional revenue opportunity. Commission revenue associated with State Farm Classic+ policies was not material to the Company's Condensed Consolidated Financial Statements for the six months ended June 30, 2025 and 2024.
Reinsurance Agreement

Hagerty Re has a quota share agreement to cede 50% of the risk assumed from a subsidiary of Markel in relation to High-Net-Worth Accounts to Oglesby Reinsurance Company, a wholly owned subsidiary of State Farm. Refer to Note 14 — Reinsurance for additional information on the Company's reinsurance programs.
The following tables summarize all balances related to the risk ceded by Hagerty Re to State Farm subsidiaries:

Three months ended
June 30,		Six months ended
June 30,
2025202420252024
Revenue:in thousands
Earned premium (1)
$(4,735)$(4,069)$(9,191)$(8,022)
Expenses:
Ceding commission, net (2)
$(2,463)$(2,117)$(4,780)$(4,172)
Losses and loss adjustment expenses (3)
(1,420)(813)(7,507)(3,604)
Total expenses$(3,883)$(2,930)$(12,287)$(7,776)
(1)    Represents premiums ceded to State Farm subsidiaries, which are accounted for as a reduction to "Earned premium".
(2)    Represents commissions from State Farm subsidiaries related to ceded reinsurance, which are accounted for as a reduction to "Ceding commissions, net".
(3)    Represents loss recoveries associated with reinsurance ceded to State Farm subsidiaries, which are accounted for as a reduction to "Losses and loss adjustment expenses".

June 30,December 31,
20252024
Assets:in thousands
Commissions receivable$5,502 $2,095 
Deferred acquisition costs, net (1)
(5,171)(4,448)
Other current assets (2)
20,562 14,758 
Total assets$20,893 $12,405 
Liabilities:
Accounts payable, accrued expenses and other current liabilities (3)
$10,582 $4,028 
Total liabilities$10,582 $4,028 
(1)    Represents unearned ceding commission received from State Farm subsidiaries.
(2)    Represents unearned deferred ceded premium and reinsurance recoverables from State Farm subsidiaries.
(3)    Represents reinsurance premiums due to State Farm subsidiaries.
State Farm Term Loan

In September 2023, Hagerty Re entered into an unsecured term loan facility with State Farm in an aggregate principal amount of $25.0 million and an interest rate of 8.0% per annum. The State Farm Term Loan will mature in September 2033. Refer to Note 15 — Debt for additional information.
Other Related Party Transactions

From time-to-time, in the ordinary course of business, related parties, such as members of the Board and management, purchase insurance policies from the Company, receive payments on claims required by the Company's insurance policies, and buy and sell collector cars and enthusiast vehicles through marketplace auctions or in private transactions.