v3.26.1
Supplemental Balance Sheet and Cash Flow Information
 6 Months Ended
Jun. 30, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplemental Balance Sheet and Cash Flow Information
4 — Supplemental Balance Sheet and Cash Flow Information

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

As of June 30, 2026 and 2025, cash and cash equivalents and restricted cash and cash equivalents were as follows:

June 30,
20262025
in thousands
Cash and cash equivalents$298,302 $140,300 
Restricted cash and cash equivalents169,333 190,286 
Total cash and cash equivalents and restricted cash and cash equivalents
$467,635 $330,586 
Restricted Assets

Hagerty Re maintains trust accounts for the benefit of ceding insurers as security for its obligations for losses, loss expenses, and unearned premium. The Company's wholly owned insurance carrier subsidiary, Drivers Edge Insurance Company ("Drivers Edge"), maintains assets on deposit with a number of regulatory authorities to support its insurance operations.

The Company's MGA subsidiaries collect premiums from insureds on behalf of various insurance carriers. Prior to remittance to the insurance carrier, these funds are required to be held in trust for the benefit of the insurance carriers and segregated from the Company's operating cash.
Broad Arrow Capital LLC ("BAC") and its consolidated subsidiaries maintain bank accounts that are required for the operation of the BAC Credit Facility (as defined in Note 14 — Debt). The funds in these bank accounts represent security under the BAC Credit Facility and their use is restricted to the servicing of the debt outstanding under that facility.

The following table presents the components of the Company's restricted assets as of June 30, 2026 and December 31, 2025:

June 30,December 31,
20262025
in thousands
Restricted cash and cash equivalents$169,333 $138,823 
Fixed maturity securities567,800 675,302 
Equity securities— 34,871 
Total restricted assets$737,133 $848,996 
Variable Interest Entities

BAC and certain of its subsidiaries transfer notes receivable to wholly owned, bankruptcy-remote, special purpose entities (each, an "SPE") to secure borrowings under the BAC Credit Agreement (as defined in Note 14 — Debt).

These SPEs are considered to be variable interest entities (each, a "VIE") under GAAP and their financial statements are consolidated by BAC, which is the primary beneficiary of the SPEs and also a consolidated subsidiary of the Company. BAC is considered to be the primary beneficiary of the SPEs because it has (i) power over the significant activities of the SPEs through its role as servicer of the notes receivable used to secure borrowings under the BAC Credit Agreement; and (ii) the obligation to absorb losses or the right to receive returns that could be significant through its interest in the residual cash flows of the SPEs.

Refer to Note 8 — Notes Receivable and Note 14 — Debt for additional information.
The following table presents the assets and liabilities of the Company's consolidated VIEs as of June 30, 2026 and December 31, 2025:

June 30,December 31,
20262025
ASSETSin thousands
Cash and cash equivalents$1,781 $697 
Restricted cash and cash equivalents6,100 17,005 
Notes receivable109,736 81,740 
Other assets1,426 1,748 
TOTAL ASSETS$119,043 $101,190 
LIABILITIES
Accounts payable and accrued expenses$663 $524 
Debt, net87,526 68,423 
Other liabilities279 1,658 
TOTAL LIABILITIES$88,468 $70,605 
Supplemental Cash Flow Information

The table below presents information regarding the Company's non-cash investing and financing activities, as well as the cash paid for interest and taxes for the six months ended June 30, 2026 and 2025:

Six months ended June 30,
20262025
Non-cash investing activities:in thousands
Issuance of notes receivable (1)
$11,645 $9,816 
Collection of notes receivable (1)
$4,614 $1,884 
Capital expenditures$792 $801 
Non-cash financing activities:
Exchange of THG units for shares of Class A Common Stock (Refer to Note 16)
$797 $712 
Issuance of shares of Class A Common Stock resulting from the vesting of RSUs (Refer to Note 17)
$8,840 $8,067 
Cash paid for interest$6,033 $4,337 
Cash paid for income taxes$18,009 $11,794 
(1)    In certain situations, BAC makes loans to refinance accounts receivable balances generated by Broad Arrow Group, Inc. ("Broad Arrow") auctions and private sales. These loans are accounted for on the Condensed Consolidated Balance Sheets as non-cash reclassifications between "Accounts receivable" and "Notes receivable" and are not presented within Investing Activities in the Company's Condensed Consolidated Statements of Cash Flows. Upon repayment, the cash received in settlement of such loans is classified within Operating Activities in the Company's Condensed Consolidated Statements of Cash Flows.