Hagerty classic-car insurance gathers steam for future
Traverse City – Classic-car insurance company Hagerty is evolving to adapt to a changing automotive world.
“Our mission as a business is to save driving and car culture for future generations,” said McKeel Hagerty, CEO. “We’re not just in the insurance business. We certainly started in insurance, and we’ll certainly continue doing that and we’ll do a lot more of it.”
“But it’s all this idea of an automotive lifestyle: events, even – potentially – membership physical locations someday. All of our media efforts will start expanding, and the business will expand even faster,” Hagerty told the Traverse City Record-Eagle.
Some of the growth will be made possible by an infusion of cash from Markel Corp., a multi-national holding company for insurance, reinsurance and investment operations. The company recently paid $212.5 million to acquire a 25% stake in Hagerty.
“It was really a match made in heaven,” said Hagerty. “We just invited them into the owner group and now we’re ready to continue growing the business as we planned.”
Much of that growth involves the Hagerty Drivers Club, which offers members-only events, a magazine, automotive discounts, roadside service, membership in a historic vehicle association and access to an automotive help desk.
“The Drivers Club is our big evolution as a business,” Hagerty said. “It went from kind of a sideline to the headline.”
More than 1.4 million people now belong to the Hagerty Drivers Club. The company aims to increase membership. Business growth requires capital. The Markel deal offered a large chunk of capital.
“Markel is a really great long-term partner with another side of our business, which is they’re a risk-taking partner with us,” Hagerty said. “We’re a risk-taking business, so we actually don’t just sell insurance, we actually bear some of that risk. So we’ll have additional capital to be able to do even more.”
Markel operates 77 offices in 18 countries, according to the company’s website.
The deal began taking shape almost a year ago. Terms were solidified last winter.
Efforts to expand its Drivers Club drove Hagerty earlier this year to buy a collector-car insurance program from Kemper.
“This is potentially 50,000 to 60,000 additional members who will be, now, part of the Driver’s Club and be able to help us in our purpose of saving driving,” Hagerty said of that purchase.