Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 21, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40244 | |
Entity Registrant Name | HAGERTY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-1213144 | |
Entity Address, Address Line One | 121 Drivers Edge | |
Entity Address, City or Town | Traverse City | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 49684 | |
City Area Code | (800) | |
Local Phone Number | 922-4050 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
CIK | 0001840776 | |
Amendment Flag | false | |
Fiscal Period Focus | Q2 | |
Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | |
Trading Symbol | HGTY | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding (in shares) | 84,479,065 | |
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one shareof Class A common stock, each at an exercise price of$11.50 per share | |
Trading Symbol | HGTY.WS | |
Security Exchange Name | NYSE | |
Class V Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 251,033,906 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
REVENUE: | ||||
Revenue from contract with customer | $ 133,762 | $ 111,917 | $ 234,883 | $ 190,596 |
Earned premium | 127,482 | 94,100 | 244,713 | 183,232 |
Total revenue | 261,244 | 206,017 | 479,596 | 373,828 |
OPERATING EXPENSES: | ||||
Salaries and benefits | 53,572 | 53,271 | 108,804 | 99,747 |
Ceding commission | 60,350 | 45,255 | 115,775 | 87,633 |
Losses and loss adjustment expenses | 53,564 | 38,620 | 101,976 | 75,539 |
Sales expense | 41,941 | 37,455 | 77,054 | 65,892 |
General and administrative services | 21,318 | 20,729 | 42,699 | 40,187 |
Depreciation and amortization | 10,397 | 8,300 | 24,140 | 15,447 |
Restructuring, impairment and related charges, net | 2,849 | 0 | 8,384 | 0 |
Total operating expenses | 243,991 | 203,630 | 478,832 | 384,445 |
OPERATING INCOME (LOSS) | 17,253 | 2,387 | 764 | (10,617) |
Change in fair value of warrant liabilities | (1,754) | (5,400) | (2,269) | 26,286 |
Interest and other income (expense) | 3,770 | (353) | 9,417 | (1,037) |
INCOME (LOSS) BEFORE INCOME TAX EXPENSE | 19,269 | (3,366) | 7,912 | 14,632 |
Income tax benefit (expense) | (3,730) | (2,138) | (7,398) | (4,168) |
Income (loss) from equity method investment, net of tax | 0 | (39) | 0 | (141) |
NET INCOME (LOSS) | 15,539 | (5,543) | 514 | 10,323 |
Net loss (income) attributable to non-controlling interest | (13,134) | 7 | (208) | 11,648 |
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS | 2,405 | (5,536) | 306 | 21,971 |
Class A Common Stock | ||||
OPERATING EXPENSES: | ||||
NET INCOME (LOSS) | 15,539 | (5,543) | 514 | 10,323 |
Net loss (income) attributable to non-controlling interest | $ (13,134) | $ 7 | $ (208) | $ 11,648 |
Earnings (loss) per share of Class A Common Stock: | ||||
Basic (in dollars per share) | $ 0.03 | $ (0.07) | $ 0 | $ 0.27 |
Diluted (in dollars per share) | $ 0.03 | $ (0.07) | $ 0 | $ (0.02) |
Weighted-average shares of Class A Common Stock outstanding: | ||||
Basic (in shares) | 84,371 | 82,452 | 83,820 | 82,443 |
Diluted (in shares) | 85,563 | 82,452 | 84,424 | 334,702 |
Commission and fee revenue | ||||
REVENUE: | ||||
Revenue from contract with customer | $ 110,187 | $ 95,506 | $ 184,799 | $ 157,967 |
Membership, marketplace and other revenue | ||||
REVENUE: | ||||
Revenue from contract with customer | $ 23,575 | $ 16,411 | $ 50,084 | $ 32,629 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 15,539 | $ (5,543) | $ 514 | $ 10,323 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 1,110 | (1,022) | 1,347 | (748) |
Derivative instruments | 330 | 388 | (148) | 1,933 |
Other comprehensive income (loss) | 1,440 | (634) | 1,199 | 1,185 |
Comprehensive income (loss) | 16,979 | (6,177) | 1,713 | 11,508 |
Comprehensive loss (income) attributable to non-controlling interest | (14,220) | 7 | (1,112) | 11,648 |
Comprehensive income (loss) attributable to Class A Common Stockholders | $ 2,759 | $ (6,170) | $ 601 | $ 23,156 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 114,252 | $ 95,172 |
Restricted cash and cash equivalents | 518,109 | 444,019 |
Accounts receivable | 76,794 | 58,255 |
Premiums receivable | 193,268 | 100,700 |
Commissions receivable | 42,317 | 60,151 |
Notes receivable | 30,991 | 25,493 |
Deferred acquisition costs, net | 140,098 | 107,342 |
Other current assets | 63,929 | 45,651 |
Total current assets | 1,179,758 | 936,783 |
Notes receivable | 11,885 | 11,934 |
Property and equipment, net | 23,399 | 25,256 |
Lease right-of-use assets | 77,640 | 82,398 |
Intangible assets, net | 103,826 | 104,024 |
Goodwill | 115,060 | 115,041 |
Other long-term assets | 40,962 | 37,082 |
TOTAL ASSETS | 1,552,530 | 1,312,518 |
Current Liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 78,686 | 77,049 |
Losses payable and provision for unpaid losses and loss adjustment expenses | 172,133 | 167,257 |
Commissions payable | 101,739 | 77,075 |
Due to insurers | 128,622 | 68,171 |
Advanced premiums | 34,173 | 17,084 |
Unearned premiums | 303,585 | 235,462 |
Contract liabilities | 29,661 | 25,257 |
Total current liabilities | 848,599 | 667,355 |
Long-term lease liabilities | 77,084 | 80,772 |
Long-term debt | 80,841 | 108,280 |
Warrant liabilities | 47,830 | 45,561 |
Deferred tax liability | 16,501 | 12,850 |
Contract liabilities | 18,336 | 19,169 |
Other long-term liabilities | 5,370 | 11,162 |
TOTAL LIABILITIES | 1,094,561 | 945,149 |
Commitments and Contingencies (Note 21) | 0 | 0 |
TEMPORARY EQUITY | ||
Preferred stock, $0.0001 par value (20,000,000 shares authorized, 8,483,561 Series A Convertible Preferred Stock issued and outstanding as of June 30, 2023 and no shares issued and outstanding as of December 31, 2022) | 79,159 | 0 |
STOCKHOLDERS' EQUITY | ||
Additional paid-in capital | 556,595 | 549,034 |
Accumulated earnings (deficit) | (489,296) | (489,602) |
Accumulated other comprehensive income (loss) | 83 | (213) |
Total stockholders' equity | 67,415 | 59,252 |
Non-controlling interest | 311,395 | 308,117 |
Total equity (Note 15) | 378,810 | 367,369 |
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY | 1,552,530 | 1,312,518 |
Class A Common Stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock | 8 | 8 |
Class V Common Stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock | $ 25 | $ 25 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Temporary equity, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Temporary equity, shares issued (in shares) | 8,483,561 | 0 |
Temporary equity, shares outstanding (in shares) | 8,483,561 | 0 |
Common stock, shares, outstanding (in shares) | 339,904,789 | 338,961,435 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares, issued (in shares) | 84,405,625 | 83,202,969 |
Common stock, shares, outstanding (in shares) | 84,405,625 | 83,202,969 |
Class V Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares, issued (in shares) | 251,033,906 | 251,033,906 |
Common stock, shares, outstanding (in shares) | 251,033,906 | 251,033,906 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Class A Common Stock | Class V Common Stock | Total Stockholders' Equity | Series A Convertible Preferred Stock Series A Convertible Preferred Stock | Common Stock Class A Common Stock | Common Stock Class V Common Stock | Additional Paid in Capital | Accumulated Earnings (Deficit) | Accumulated Other Comprehensive Income/(Loss) | Non-controlling Interest |
Beginning balance at Dec. 31, 2021 | $ 593,277 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income (loss) before exchange agreement amendment | (11,205) | ||||||||||
Redemption value adjustment for redeemable non-controlling interest | 1,560,418 | ||||||||||
Removal of the redeemable feature of the non-controlling interest | (2,142,490) | ||||||||||
Ending balance at Mar. 31, 2022 | 0 | ||||||||||
Stockholders' Equity, beginning balance (in shares) at Dec. 31, 2021 | 82,327,000 | 251,034,000 | |||||||||
Stockholders' Equity, beginning balance at Dec. 31, 2021 | (322,476) | $ (323,781) | $ 8 | $ 25 | $ 160,189 | $ (482,276) | $ (1,727) | $ 1,305 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) before exchange agreement amendment | (3,851) | (3,679) | (3,679) | (172) | |||||||
Other comprehensive income (loss) before exchange agreement amendment | 1,657 | 1,657 | 1,657 | ||||||||
Exercise of warrants (in shares) | 125,000 | ||||||||||
Exercise of warrants | 1,906 | 1,906 | 1,906 | ||||||||
Redemption value adjustment for redeemable non-controlling interest | (1,560,420) | (1,560,420) | (162,095) | (1,398,325) | |||||||
Removal of the redeemable feature of the non-controlling interest | 2,142,490 | 1,926,940 | 528,615 | 1,398,325 | 215,550 | ||||||
Net income (loss) subsequent to exchange agreement amendment | 30,923 | 31,187 | 31,187 | (264) | |||||||
Other comprehensive income (loss) subsequent to exchange agreement amendment | 162 | 162 | 162 | ||||||||
Stockholders' Equity, ending balance (in shares) at Mar. 31, 2022 | 82,452,000 | 251,034,000 | |||||||||
Stockholders' Equity, ending balance at Mar. 31, 2022 | 290,391 | 73,972 | $ 8 | $ 25 | 528,615 | (454,768) | 92 | 216,419 | |||
Beginning balance at Dec. 31, 2021 | 593,277 | ||||||||||
Ending balance at Jun. 30, 2022 | 0 | ||||||||||
Stockholders' Equity, beginning balance (in shares) at Dec. 31, 2021 | 82,327,000 | 251,034,000 | |||||||||
Stockholders' Equity, beginning balance at Dec. 31, 2021 | (322,476) | (323,781) | $ 8 | $ 25 | 160,189 | (482,276) | (1,727) | 1,305 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 10,323 | $ 10,323 | |||||||||
Other comprehensive income (loss) | 1,185 | ||||||||||
Stockholders' Equity, ending balance (in shares) at Jun. 30, 2022 | 82,452,000 | 251,034,000 | |||||||||
Stockholders' Equity, ending balance at Jun. 30, 2022 | 289,521 | 72,109 | $ 8 | $ 25 | 532,922 | (460,304) | (542) | 217,412 | |||
Beginning balance at Mar. 31, 2022 | 0 | ||||||||||
Ending balance at Jun. 30, 2022 | 0 | ||||||||||
Stockholders' Equity, beginning balance (in shares) at Mar. 31, 2022 | 82,452,000 | 251,034,000 | |||||||||
Stockholders' Equity, beginning balance at Mar. 31, 2022 | 290,391 | 73,972 | $ 8 | $ 25 | 528,615 | (454,768) | 92 | 216,419 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (5,543) | $ (5,543) | (5,536) | (5,536) | (7) | ||||||
Other comprehensive income (loss) | (634) | (634) | (634) | ||||||||
Share-based compensation | 4,307 | 4,307 | 4,307 | ||||||||
Non-controlling interest issued capital | 1,000 | 1,000 | |||||||||
Stockholders' Equity, ending balance (in shares) at Jun. 30, 2022 | 82,452,000 | 251,034,000 | |||||||||
Stockholders' Equity, ending balance at Jun. 30, 2022 | $ 289,521 | 72,109 | $ 8 | $ 25 | 532,922 | (460,304) | (542) | $ 217,412 | |||
Temporary equity, beginning balance (in shares) at Dec. 31, 2022 | 0 | 0 | |||||||||
Temporary equity, beginning balance at Dec. 31, 2022 | $ 0 | $ 0 | |||||||||
Temporary equity, ending balance (in shares) at Mar. 31, 2023 | 0 | ||||||||||
Temporary equity, ending balance at Mar. 31, 2023 | $ 0 | ||||||||||
Stockholders' Equity, beginning balance (in shares) at Dec. 31, 2022 | 338,961,435 | 83,202,969 | 251,033,906 | 83,203,000 | 251,034,000 | 255,758,466 | |||||
Stockholders' Equity, beginning balance at Dec. 31, 2022 | $ 367,369 | 59,252 | $ 8 | $ 25 | 549,034 | (489,602) | (213) | $ 308,117 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (15,025) | (2,099) | (2,099) | (12,926) | |||||||
Other comprehensive income (loss) | (241) | (59) | (59) | (182) | |||||||
Issuance of shares under employee plans (in shares) | 17,000 | ||||||||||
Share-based compensation | 4,113 | 4,113 | 4,113 | ||||||||
Conversion of Hagerty Group Units to Class A Common Stock (in shares) | 119,000 | ||||||||||
Conversion of Hagerty Group Units to Class A Common Stock | 0 | 1,045 | 1,045 | (1,045) | |||||||
Non-controlling interest issued capital | 500 | 500 | |||||||||
Reallocation between controlling and non-controlling interest | 0 | (143) | (143) | 143 | |||||||
Stockholders' Equity, ending balance (in shares) at Mar. 31, 2023 | 83,339,000 | 251,034,000 | |||||||||
Stockholders' Equity, ending balance at Mar. 31, 2023 | $ 356,716 | 62,109 | $ 8 | $ 25 | 554,049 | (491,701) | (272) | $ 294,607 | |||
Temporary equity, beginning balance (in shares) at Dec. 31, 2022 | 0 | 0 | |||||||||
Temporary equity, beginning balance at Dec. 31, 2022 | $ 0 | $ 0 | |||||||||
Temporary equity, ending balance (in shares) at Jun. 30, 2023 | 8,483,561 | 8,484,000 | |||||||||
Temporary equity, ending balance at Jun. 30, 2023 | $ 79,159 | $ 79,159 | |||||||||
Stockholders' Equity, beginning balance (in shares) at Dec. 31, 2022 | 338,961,435 | 83,202,969 | 251,033,906 | 83,203,000 | 251,034,000 | 255,758,466 | |||||
Stockholders' Equity, beginning balance at Dec. 31, 2022 | $ 367,369 | 59,252 | $ 8 | $ 25 | 549,034 | (489,602) | (213) | $ 308,117 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 514 | $ 514 | |||||||||
Other comprehensive income (loss) | $ 1,199 | ||||||||||
Conversion of Hagerty Group Units to Class A Common Stock (in shares) | 259,302 | ||||||||||
Stockholders' Equity, ending balance (in shares) at Jun. 30, 2023 | 339,904,789 | 84,405,625 | 251,033,906 | 84,406,000 | 251,034,000 | 255,499,164 | |||||
Stockholders' Equity, ending balance at Jun. 30, 2023 | $ 378,810 | 67,415 | $ 8 | $ 25 | 556,595 | (489,296) | 83 | $ 311,395 | |||
Temporary equity, beginning balance (in shares) at Mar. 31, 2023 | 0 | ||||||||||
Temporary equity, beginning balance at Mar. 31, 2023 | $ 0 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Issuance of Series A Preferred Stock, net of issuance costs (in shares) | 8,484,000 | ||||||||||
Issuance of Series A Preferred Convertible Stock, net of issuance costs | $ 79,159 | ||||||||||
Temporary equity, ending balance (in shares) at Jun. 30, 2023 | 8,483,561 | 8,484,000 | |||||||||
Temporary equity, ending balance at Jun. 30, 2023 | $ 79,159 | $ 79,159 | |||||||||
Stockholders' Equity, beginning balance (in shares) at Mar. 31, 2023 | 83,339,000 | 251,034,000 | |||||||||
Stockholders' Equity, beginning balance at Mar. 31, 2023 | 356,716 | 62,109 | $ 8 | $ 25 | 554,049 | (491,701) | (272) | 294,607 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 15,539 | $ 15,539 | 2,405 | 2,405 | 13,134 | ||||||
Other comprehensive income (loss) | 1,440 | 355 | 355 | 1,085 | |||||||
Issuance of shares under employee plans (in shares) | 926,000 | ||||||||||
Issuance of shares under employee plans | 906 | 906 | 906 | ||||||||
Share-based compensation | 4,109 | 4,109 | 4,109 | ||||||||
Conversion of Hagerty Group Units to Class A Common Stock (in shares) | 141,000 | ||||||||||
Conversion of Hagerty Group Units to Class A Common Stock | 0 | 1,266 | 1,266 | (1,266) | |||||||
Non-controlling interest issued capital | 100 | 100 | |||||||||
Reallocation between controlling and non-controlling interest | $ 0 | (3,735) | (3,735) | $ 3,735 | |||||||
Stockholders' Equity, ending balance (in shares) at Jun. 30, 2023 | 339,904,789 | 84,405,625 | 251,033,906 | 84,406,000 | 251,034,000 | 255,499,164 | |||||
Stockholders' Equity, ending balance at Jun. 30, 2023 | $ 378,810 | $ 67,415 | $ 8 | $ 25 | $ 556,595 | $ (489,296) | $ 83 | $ 311,395 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ 514 | $ 10,323 |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Change in fair value of warrant liabilities | 2,269 | (26,286) |
Depreciation and amortization expense | 24,140 | 15,447 |
Provision for deferred taxes | 3,480 | 2,553 |
Impairment of operating lease right-of-use assets | 1,147 | 0 |
Loss on disposals of equipment, software and other assets | 1,668 | 361 |
Share-based compensation expense | 8,222 | 4,307 |
Other | 958 | 229 |
Changes in operating assets and liabilities: | ||
Accounts, premiums and commission receivable | (93,549) | (54,294) |
Deferred acquisition costs | (32,756) | (23,307) |
Losses payable and provision for unpaid losses and loss adjustment expenses | 4,876 | 14,570 |
Commissions payable | 24,664 | 14,795 |
Due to insurers | 60,174 | 52,486 |
Advanced premiums | 17,043 | 15,032 |
Unearned premiums | 68,123 | 49,395 |
Other assets and liabilities, net | (20,416) | (15,686) |
Net Cash Provided by Operating Activities | 70,557 | 59,925 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (16,251) | (21,520) |
Acquisitions, net of cash acquired | (7,084) | (13,520) |
Purchase of previously held equity method investment | 0 | (15,250) |
Issuance of notes receivable | (11,015) | 0 |
Collection of notes receivable | 6,235 | 0 |
Purchase of fixed income securities | (6,172) | (2,448) |
Maturities of fixed income securities | 2,964 | 1,216 |
Other investing activities | 22 | (1,639) |
Net Cash Used in Investing Activities | (31,301) | (53,161) |
FINANCING ACTIVITIES: | ||
Payments on long-term debt | (99,250) | (91,500) |
Proceeds from long-term debt | 71,590 | 42,000 |
Proceeds from issuance of preferred stock, net of issuance costs | 79,159 | 0 |
Contribution from non-controlling interest | 600 | 1,000 |
Proceeds from issuance of common stock under employee stock purchase plan | 906 | 0 |
Net Cash Provided by (Used in) Financing Activities | 53,005 | (48,500) |
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents | 909 | (787) |
Change in cash and cash equivalents and restricted cash and cash equivalents | 93,170 | (42,523) |
Beginning cash and cash equivalents and restricted cash and cash equivalents | 539,191 | 603,972 |
Ending cash and cash equivalents and restricted cash and cash equivalents | $ 632,361 | $ 561,449 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | 1 — Basis of Presentation and Accounting Policies In these notes to the Condensed Consolidated Financial Statements, the terms "we," "Hagerty," and "the Company" refer to Hagerty, Inc., and its consolidated subsidiaries, including The Hagerty Group, LLC ("The Hagerty Group"), unless the context requires otherwise. Description of Business — Hagerty is a global market leader in providing insurance for classic cars and enthusiast vehicles. In addition, Hagerty provides an automotive enthusiast platform that engages, entertains and connects with its insurance policyholders and Hagerty Drivers Club (" HDC") paid subscribers, collectively referred to herein as "Members," and other car enthusiasts. The Company’s headquarters are located in Traverse City, Michigan. The Company operates through various subsidiaries, which generate the following revenue streams: Commission and fee revenue As a Managing General Agency ("MGA"), Hagerty earns commission and fee revenue for the underwriting, sale and servicing of classic car, enthusiast vehicle and marine insurance policies written through personal and commercial lines agency agreements with multiple insurance carriers in the United States ("U.S."), Canada and the United Kingdom ("U.K."). Earned premium Reinsurance premiums are earned through Hagerty Reinsurance Limited ("Hagerty Re"), which is registered as a Class 3A reinsurer under the Bermuda Insurance Act 1978. Hagerty Re reinsures the classic car, enthusiast vehicle and marine risks written through Hagerty's MGA entities in the U.S., Canada and the U.K. Earned premium is recorded net of premiums ceded to third-party reinsurers. The policies sold by Hagerty's U.S. MGAs are underwritten by Essentia Insurance Company ("Essentia") and reinsured with Essentia's affiliate, Evanston Insurance Company ("Evanston"). In turn, Hagerty Re a ssumes a portion of the risk and earns premiums through a quota share agreement with Evanston. Essentia and Evanston are wholly-owned subsidiaries of Markel Corporation ("Markel"), which is a related party. Refer to Note 20 — Related-Party Transactions for additional information. The policies sold by Hagerty's Canadian MGA are underwritten by Aviva Canada Inc. ("Aviva"), through Aviva's Canadian subsidiary, Elite Insurance Company ("Elite"). In turn, Hagerty Re assumes a portion of the risk and earns premiums through a quota share agreement with Elite. The policies sold by Hagerty's U.K. MGA are underwritten by Markel International Insurance Company Limited ("Markel International"). In turn, Hagerty Re assumes a portion of the risk and earns premiums through a quota share agreement with Markel International, a wholly-owned subsidiary of Markel, which is a related party. Refer to Note 20 — Related-Party Transactions for additional information. As U.K. law requires unlimited liability coverage, Hagerty Re purchases reinsurance to limit its liability to £1,000,000 per claim. Membership, marketplace and other revenue The Company earns subscription revenue through HDC membership offerings. HDC memberships are sold as a bundled product which give Members access to a number of products and services, including Hagerty Drivers Club Magazine, automotive enthusiast events, Hagerty's proprietary vehicle valuation tool, emergency roadside services and special vehicle-related discounts. The Company earns fee-based revenue from its Marketplace offerings, which include the buying and selling of collector cars through classified listings, live auctions, time-based online auctions, and brokered private sales. In addition, Marketplace earns finance revenue from term loans made to high-net-worth individuals and businesses secured by collector cars. In January 2022, the Company entered into a joint venture with Broad Arrow Group, Inc. and its consolidated subsidiaries ("Broad Arrow"), pursuant to which Hagerty invested $15.3 million in cash in exchange for equity ownership of approximately 40% of Broad Arrow. Then, in August 2022, the Company acquired the remaining 60% of Broad Arrow in exchange for approximately $73.3 million of equity consideration consisting of Class A Common Stock and limited liability units in The Hagerty Group ("Hagerty Group Units"). As a result of this acquisition, the Company and Broad Arrow expect to further leverage their respective product offerings and continue to build Marketplace. Refer to Note 6 — Acquisitions and Investments for additional information. Basis of Presentation — The Company's Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the regulations of the Securities and Exchange Commission and include the accounts of Hagerty, Inc., which is comprised of The Hagerty Group with its consolidated subsidiaries. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as permitted by such rules and regulations. The Company's Condensed Consolidated Financial Statements reflect all normal recurring adjustments and accruals that are, in the opinion of management, necessary for a fair statement of its financial position and results of operations for the interim periods presented. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Principles of Consolidation — The Company's Condensed Consolidated Financial Statements contain the accounts of Hagerty, Inc. and its majority-owned or controlled subsidiaries. The Company is the sole managing member of The Hagerty Group and, as a result, consolidates the financial statements of The Hagerty Group. The Company had economic ownership of 24.8% and 24.5% of The Hagerty Group as of June 30, 2023 and December 31, 2022, respectively. In addition, Member Hubs Holding, LLC ("MHH"), which operates as Hagerty Garage + Social, is an approximately 80% owned subsidiary of The Hagerty Group. The Company consolidates these entities using the voting interest method in accordance with Accounting Standards Codification ("ASC") Topic 810, Consolidations ("ASC 810"). Non-controlling interest is presented separately on the Condensed Consolidated Statements of Operations, the Condensed Consolidated Statements of Comprehensive Income (Loss), the Condensed Consolidated Balance Sheets, and the Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity. From January 2022 to August 2022, the Company owned approximately 40% of Broad Arrow, which was accounted for as an equity method investment. Subsequent to the acquisition of the remaining 60% of Broad Arrow in August 2022, Broad Arrow became a wholly-owned subsidiary of the Company and, as a result, the financial statements of Broad Arrow are now consolidated as a part of Hagerty. Refer to Note 6 — Acquisitions and Investments for additional information. All intercompany accounts and transactions have been eliminated in consolidation. Business Combination — On December 2, 2021, (the "Closing"), The Hagerty Group completed a business combination with Aldel Financial Inc. ("Aldel"), and Aldel Merger Sub LLC ("Merger Sub"), a Delaware limited liability company and wholly-owned subsidiary of Aldel (the "Business Combination"). In connection with the Closing, Aldel changed its name from Aldel Financial Inc. to Hagerty, Inc. Following the Closing, the Company is organized as a C corporation and owns an equity interest in The Hagerty Group in what is commonly known as an "Up-C" structure in which substantially all of the assets and liabilities of the Company are held by The Hagerty Group. Emerging Growth Company — The Company currently qualifies as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 and can delay the adoption of new or revised accounting standards until those standards would apply to private companies. The Company intends to avail itself of this extended transition period and, therefore, the Company may not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies or have opted out of using such extended transition period. Use of Estimates — The preparation of the Company's Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements, as well as the reported amounts of revenue and expenses during the reporting period. Although the estimates are considered reasonable, actual results could materially differ from those estimates. Segment Information — The Company has one operating segment and one reportable segment. The Company’s Chief Operating Decision Maker ("CODM") is the Chief Executive Officer ("CEO"), who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. The Company’s management approach is to utilize an internally developed strategic decision making framework with its Members and customers at the center of all decisions, which requires the CODM to have a consolidated view of the operations so that decisions can be made in the best interest of Hagerty and its Members. Foreign Currency Translation — The Company translates its foreign currency denominated assets and liabilities into U.S. dollars at current rates of exchange as of the balance sheet date, and foreign currency denominated income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in "Foreign currency translation adjustments", a component of Accumulated other comprehensive income (loss). Foreign currency transaction gains and losses are recognized within "Interest and other income (expense)" in the Condensed Consolidated Statements of Operations. Supplemental Cash Flow Information — The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as of June 30, 2023 and 2022: June 30, 2023 June 30, 2022 in thousands Cash and cash equivalents $ 114,252 $ 180,165 Restricted cash and cash equivalents 518,109 381,284 Total cash and cash equivalents and restricted cash and cash equivalents $ 632,361 $ 561,449 The table below presents information regarding the Company's non-cash investing activities, as well as the cash paid for interest and taxes for the six months ended June 30, 2023 and 2022: Six months ended 2023 2022 NON-CASH INVESTING ACTIVITIES: in thousands Capital expenditures $ 212 $ 4,389 Acquisitions $ 1,742 $ 7,500 CASH PAID FOR: Interest $ 3,312 $ 2,037 Income taxes $ 6,500 $ 5,250 The issuance of Class A Common Stock resulting from the vesting of restricted stock units is a non-cash financing activity. Refer to Note 18 — Share-Based Compensation for information related to share-based compensation. Recently Adopted Accounting Standards Leases — In February 2016, the Financial Accounting Standards Board (the "FASB") issued ASC 842, which supersedes the lease requirements in ASC Topic 840, Leases . ASC 842 requires the recognition of an asset and liability for the rights and obligations created by a leased asset, whether classified as an operating lease or a finance lease. The Company adopted ASC 842 effective January 1, 2022 using the modified retrospective approach and elected not to recast comparative prior year periods. Upon adoption, the Company measured and recorded its operating lease liabilities at the present value of the remaining rental payments. Corresponding right-of-use ("ROU") assets were recorded based on the amount of the lease liabilities, adjusted by any unamortized lease incentives, deferred rent accruals and initial direct costs. The adoption of ASC 842 resulted in the recognition of initial ROU assets and lease liabilities of $72.8 million as of January 1, 2022. ASC 842 also requires sellers in a sale-leaseback transaction to recognize the entire gain from the sale of an underlying asset at the time of sale rather than over the leaseback term. The carrying value of the deferred gain on the single sale-leaseback transaction executed by the Company prior to January 1, 2022 was approximately $4.3 million and was recorded as an increase to "Accumulated Earnings (Deficit)" and "Non-controlling Interest" within the Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity at adoption. The adoption of ASC 842 did not have a material impact on the Condensed Consolidated Statements of Operations or Condensed Consolidated Statements of Cash Flows. The Company also elected the package of practical expedients provided by ASC 842, which allowed it to: (i) not reassess whether expired or existing contracts contained leases, (ii) not reassess previous lease classification, and (iii) not revalue initial direct costs for existing leases. The Company also elected the lessee practical expedient to combine lease and non-lease components in the accounting for leases of all asset classes. In addition, the Company did not elect the hindsight practical expedient. The expense of operating leases under ASC 842 is generally recognized on a straight-line basis which is calculated as the total lease cost divided by the lease term and is recognized in the Condensed Consolidated Statements of Operations. Credit Losses — In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments , which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The standard requires financial assets measured on the amortized cost basis to be presented at the net amount expected to be collected. The following financial assets held by the Company are within the scope of ASU No. 2016-13: (i) Accounts receivable, (ii) Premiums receivable, (iii) Commissions receivable, (iv) Notes receivable and (v) certain fixed income securities. The amount of any required allowance for expected credit losses is determined utilizing historical loss rates, which are then adjusted, if necessary, for specific financial assets that are judged to have a higher-than-normal risk profile. Additional credit loss allowances may also be recorded after taking into account macro-economic and industry risk factors. For Notes receivable, to the extent necessary, the amount of any required allowance for credit losses takes into account the estimated realizable value of the collateral securing the loan. The Company adopted ASU No. 2016-13 on January 1, 2023 without a material effect on the Company's Condensed Consolidated Financial Statements and with no required cumulative-effect adjustment to "Accumulated earnings (deficit)" within the Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2 — Revenue Disaggregation of Revenue — The following table presents Hagerty's revenue by distribution channel offering, as well as a reconciliation to total revenue for the three and six months ended June 30, 2023 and 2022: Agent Direct Total in thousands Three months ended June 30, 2023 Commission and fee revenue $ 46,972 $ 40,702 $ 87,674 Contingent commission revenue 12,242 10,271 22,513 Membership revenue — 13,146 13,146 Marketplace and other revenue — 10,429 10,429 Total revenue from customer contracts 59,214 74,548 133,762 Earned premium recognized under ASC 944 127,482 Total revenue $ 261,244 Three months ended June 30, 2022 Commission and fee revenue $ 40,193 $ 35,479 $ 75,672 Contingent commission revenue 10,857 8,977 19,834 Membership revenue — 11,131 11,131 Marketplace and other revenue — 5,280 5,280 Total revenue from customer contracts 51,050 60,867 111,917 Earned premium recognized under ASC 944 94,100 Total revenue $ 206,017 Agent Direct Total in thousands Six months ended June 30, 2023 Commission and fee revenue $ 78,659 $ 66,841 $ 145,500 Contingent commission revenue 21,681 17,618 39,299 Membership revenue — 25,693 25,693 Marketplace and other revenue — 24,391 24,391 Total revenue from customer contracts 100,340 134,543 234,883 Earned premium recognized under ASC 944 244,713 Total revenue $ 479,596 Six months ended June 30, 2022 Commission and fee revenue $ 66,392 $ 58,152 $ 124,544 Contingent commission revenue 18,232 15,191 33,423 Membership revenue — 21,449 21,449 Marketplace and other revenue — 11,180 11,180 Total revenue from customer contracts 84,624 105,972 190,596 Earned premium recognized under ASC 944 183,232 Total revenue $ 373,828 The following table presents Hagerty's revenue disaggregated by geographic area, as well as a reconciliation to total revenue for the three and six months ended June 30, 2023 and 2022: U.S. Canada Europe Total in thousands Three months ended June 30, 2023 Commission and fee revenue $ 77,611 $ 8,587 $ 1,476 $ 87,674 Contingent commission revenue 22,478 — 35 22,513 Membership revenue 12,254 892 — 13,146 Marketplace and other revenue 9,061 348 1,020 10,429 Total revenue from customer contracts 121,404 9,827 2,531 133,762 Earned premium recognized under ASC 944 127,482 Total revenue $ 261,244 Three months ended June 30, 2022 Commission and fee revenue $ 66,400 $ 7,956 $ 1,316 $ 75,672 Contingent commission revenue 19,798 — 36 19,834 Membership revenue 10,288 843 — 11,131 Marketplace and other revenue 4,754 152 374 5,280 Total revenue from customer contracts 101,240 8,951 1,726 111,917 Earned premium recognized under ASC 944 94,100 Total revenue $ 206,017 U.S. Canada Europe Total in thousands Six months ended June 30, 2023 Commission and fee revenue $ 132,208 $ 10,957 $ 2,335 $ 145,500 Contingent commission revenue 39,230 — 69 39,299 Membership revenue 23,923 1,770 — 25,693 Marketplace and other revenue 22,587 512 1,292 24,391 Total revenue from customer contracts 217,948 13,239 3,696 234,883 Earned premium recognized under ASC 944 244,713 Total revenue $ 479,596 Six months ended June 30, 2022 Commission and fee revenue $ 112,070 $ 10,274 $ 2,200 $ 124,544 Contingent commission revenue 33,266 — 157 33,423 Membership revenue 19,779 1,670 — 21,449 Marketplace and other revenue 10,066 470 644 11,180 Total revenue from customer contracts 175,181 12,414 3,001 190,596 Earned premium recognized under ASC 944 183,232 Total revenue $ 373,828 Refer to Note 9 — Reinsurance for additional information regarding "Earned premium" recognized under ASC 944. Contract Assets and Liabilities — The following table is a summary of the Company's contract assets and liabilities as of June 30, 2023 and December 31, 2022. Contract assets are included within "Commissions receivable" and liabilities are classified as "Contract liabilities" within current and non-current liabilities on the Condensed Consolidated Balance Sheets. June 30, 2023 December 31, 2022 in thousands Contract assets $ 38,240 $ 60,151 Contract liabilities $ 47,997 $ 44,426 Contract assets consist of contingent underwriting commission ("CUC") receivables, which are earned throughout the year and settled annually in the first quarter of the following year. As such, the "Commissions receivable" balance is generally smallest in the first quarter, and grows throughout the year as additional CUC receivables are accrued. |
Notes Receivable
Notes Receivable | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Notes Receivable | 3 — Notes Receivable Broad Arrow makes term loans to high-net-worth individuals and businesses secured by collector cars. Term loans made by Broad Arrow can carry a fixed or variable rate of interest and typically have an initial maturity of up to two years, often with an option for the client to renew for one year increments, provided the client remains in good standing. The carrying value of the loan portfolio approximates its fair value due to the relatively short-term maturities and the market rates of interest associated with most loans. In certain situations, term loans are made to clients to refinance the accounts receivable balances generated by their Broad Arrow auction or private sale purchases. These term loans are accounted for as non-cash transfers between "Accounts receivable" and "Notes receivable" and are, therefore, not reflected as the funding of "Notes receivable" within Investing Activities in the Company's Condensed Consolidated Statements of Cash Flows. Upon repayment, the cash received in settlement of such Notes receivable is classified within Operating Activities in the Company's Condensed Consolidated Statements of Cash Flows. Broad Arrow aims to mitigate the risk associated with a potential devaluation in collateral by targeting a maximum loan-to-value ("LTV") ratio of 65% (i.e., the principal loan amount divided by the estimated value of the collateral). The LTV ratio is reassessed if the loan is renewed and on a quarterly basis, or more frequently, if there is a material change in the circumstances related to the loan, the value of the collateral, the disposal plans for the collateral, or if an event of default occurs. If, as a result of this reassessment, the LTV ratio increases above the target level, the borrower is contractually required to make principal payments and/or post sufficient additional collateral to reduce the LTV ratio to cure the overage. If an event of default occurs with respect to a loan, Broad Arrow is entitled to sell the collateral to recover the outstanding principal and accrued interest balance. Management believes that the LTV ratio is the critical credit quality indicator for the loans made by Broad Arrow. In estimating the realizable value of the collector cars pledged as collateral for Broad Arrow's loans, management utilizes its expertise in the collector car market and considers an array of factors impacting the current and expected future value of each car including the year, make, model, mileage, history, and in the case of classic cars, the provenance, quality of restoration (if applicable), the originality of the body, chassis, and mechanical components, and comparable market transaction values. The repayment of secured loans can be adversely impacted by a decline in the collector car market in general or in the value of the collateral, which is concentrated within certain collecting categories. In addition, in situations when Broad Arrow’s claim on the collateral is subject to a legal process, the ability to realize proceeds from the collateral may be limited or delayed. As of June 30, 2023, Broad Arrow's net notes receivable balance was $42.9 million, of which $31.0 million was classified within current assets and $11.9 million was classified within long-term assets on the Condensed Consolidated Balance Sheets. As of December 31, 2022, Broad Arrow's net notes receivable balance was $37.4 million, of which $25.5 million was classified within current assets and $11.9 million was classified within long-term assets on the Condensed Consolidated Balance Sheets. The classification of a loan as current or non-current takes into account the contractual maturity date of the loan, as well as the likelihood of renewing the loan on or before its contractual maturity date. The table below provides the aggregate LTV ratio for Broad Arrow's loan portfolio as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 in thousands Secured loans $ 42,876 $ 37,427 Estimate of collateral value $ 100,053 $ 75,802 Aggregate LTV ratio 42.9 % 49.4 % As of June 30, 2023, one borrower had three outstanding loans totaling $11.6 million, which represents 27% of the total loan portfolio. The collateral related to these loans was $31.8 million, resulting in an LTV ratio of 36%. Management considers a loan to be past due when an interest payment is not paid within 10 days of the monthly due date, or if the principal amount is not repaid by the contractual maturity date. As of June 30, 2023 and December 31, 2022, the amount of past due interest payments was immaterial and there were no past due principal payments. A non-accrual loan is a loan for which future interest income is not recorded due to management’s determination that it is probable that future interest on the loan will not be collectible. Broad Arrow did not have any material non-accrual loans as of June 30, 2023 or December 31, 2022. As of June 30, 2023 and December 31, 2022, the allowance for expected credit losses related to the Broad Arrow loan portfolio was not material based on management’s quarterly risk assessment, which takes into consideration a number of factors including the level of historical losses for similar loans, the quality of the collateral, the low LTV ratio of the loans, management's overall assessment of the current circumstances and risks related to each loan, and, to a lesser extent, the creditworthiness of each borrower. As of December 31, 2022, management performed an analysis on the loan portfolio for indicators of impairment and determined that there were no impaired loans outstanding. |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 4 — Other Assets As of June 30, 2023 and December 31, 2022, other assets, current and long-term, consist of: June 30, 2023 December 31, 2022 in thousands Prepaid sales, general and administrative expenses $ 21,810 $ 24,234 Prepaid software as a service ("SaaS") implementation costs 19,046 18,501 Fixed income investments 16,489 12,986 Contract costs 7,482 6,576 Consignor advances (1) 6,100 — Inventory (2) 4,973 2,074 Digital media content (3) 2,652 5,580 Deferred reinsurance premiums ceded 14,552 91 Other (4) 11,787 12,691 Other assets $ 104,891 $ 82,733 (1) Broad Arrow makes consignor advances secured by collector cars that are contractually committed, in the near term, to be offered for sale at a Broad Arrow auction. Consignor advances allow the seller to receive funds upon consignment for an auction sale that will occur up to six months in the future and have short-term contractual maturities. (2) As of June 30, 2023, "Inventory" primarily includes vehicles owned by Broad Arrow that have been purchased for resale purposes. (3) The reduction in digital media content when compared to December 31, 2022 was primarily attributable to $3.8 million of impairments recorded in the first half of 2023 as a result of lower than anticipated advertising and sponsorship revenue associated with these assets. (4) As of June 30, 2023, other assets primarily includes $4.0 million of other investments, the $3.1 million fair value of an interest rate swap, $2.7 million of collector vehicle investments, and $1.4 million of deferred financing costs related to the Company's credit facility. As of December 31, 2022, other assets primarily included $4.0 million of other investments, the $3.3 million fair value of an interest rate swap, $2.5 million of collector vehicle investments, $1.4 million of deferred financing costs related to the Company's credit facility, and $1.4 million related to an outstanding reinsurance recoverable. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | 5 — Leases The following table summarizes the components of the Company's operating lease expense for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands Operating lease expense (1) $ 3,153 $ 2,233 $ 6,300 $ 4,283 Short-term lease expense (1) 147 66 216 77 Variable lease expense (1) (3) 842 669 1,649 1,245 Sublease revenue (2) (134) (33) (197) (45) Lease cost, net $ 4,008 $ 2,935 $ 7,968 $ 5,560 (1) Classified within "General and administrative services" on the Condensed Consolidated Statements of Operations. (2) Classified within "Membership, marketplace and other revenue" on the Condensed Consolidated Statements of Operations. (3) Amounts include payments for maintenance, taxes, insurance and payments affected by the Consumer Price Index. The following tables summarize supplemental balance sheet information related to operating leases as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 in thousands Operating lease ROU assets (1) $ 77,640 $ 82,398 Current lease liabilities (2) 7,988 7,556 Long-term lease liabilities 77,084 80,772 Total operating lease liabilities $ 85,072 $ 88,328 June 30, 2023 December 31, 2022 in thousands ROU assets obtained in exchange for new operating lease liabilities (3) $ 359 $ 82,398 Gains on sales and leaseback transactions, net $ — $ 4,314 Weighted-average lease term 9.82 10.23 Weighted-average discount rate 5.5 % 5.5 % (1) Refer to Note 10 — Restructuring, Impairment and Related Charges for information regarding operating lease ROU asset impairments. (2) Current lease liabilities are recorded within "Accounts payable, accrued expenses and other current liabilities" within the Condensed Consolidated Balance Sheets. (3) Represents the amount of ROU assets obtained during the six months ended June 30, 2023 and year ended December 31, 2022, which includes the transition adjustment of $72.8 million for operating lease ROU assets recorded as of January 1, 2022, upon the adoption of ASC 842. The following table summarizes information about the amount and timing of the Company's future operating lease commitments as of June 30, 2023: in thousands 2023 $ 6,177 2024 12,299 2025 11,876 2026 11,244 2027 11,052 Thereafter 58,646 Total lease payments 111,294 Less: imputed interest (26,222) Total lease liabilities $ 85,072 |
Acquisitions and Investments
Acquisitions and Investments | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Investments | 6 — Acquisitions and Investments During the six months ended June 30, 2023 and 2022, the Company completed business combinations and asset acquisitions with an aggregate purchase price, including deferred consideration, of $2.7 million and $18.5 million, respectively. Broad Arrow Acquisition In January 2022, Hagerty entered into a joint venture with Broad Arrow, pursuant to which Hagerty invested $15.3 million in cash in exchange for equity ownership of approximately 40% of Broad Arrow. The Company followed equity method accounting for its investment in Broad Arrow with the carrying amount recorded within "Equity method investments" on the Condensed Consolidated Balance Sheets as of June 30, 2022 and the Company's share of income (loss) related to Broad Arrow recorded within "Income (loss) from equity method investment, net of tax" on the Condensed Consolidated Statements of Operations. In August 2022, the Company acquired the remaining 60% of Broad Arrow from the former Broad Arrow shareholders in exchange for equity consideration (the "Broad Arrow Acquisition") consisting of shares of the Company's Class A Common Stock and Hagerty Group Units. The number of Class A Common Stock shares and Hagerty Group Units issued was calculated using a 20-day Volume Weighted Average Stock Price of Class A Common Stock prior to the closing date on August 16, 2022. The fair value of the purchase consideration of $73.3 million was calculated based on the Class A Common Stock price of $13.47 as of the closing date. As a result of the Broad Arrow Acquisition, the Company and Broad Arrow expect to further leverage their respective product offerings and continue to build Marketplace. Fair Value of Consideration Transferred The Broad Arrow Acquisition was accounted for as a business combination achieved in stages (i.e., a step acquisition). The following table summarizes the fair value of Broad Arrow as of the date of the acquisition (in thousands): Total equity consideration $ 73,253 Fair value of previously held equity interest in Broad Arrow (1) 48,309 Total consideration and value to be allocated to net assets $ 121,562 (1) The Broad Arrow Acquisition was accounted for as a step acquisition. Accordingly, the Company remeasured its pre-existing 40% equity interest in Broad Arrow immediately prior to the completion of the acquisition to its estimated fair value of approximately $48.3 million. This fair value was derived from the Hagerty, Inc. stock price of $13.47 as of the closing date and thus represents a Level 1 fair value measurement. As a result of the remeasurement, the Company recorded a net gain of approximately $34.7 million in the third quarter of 2022, representing the excess of the $48.3 million estimated fair value of its pre-existing 40% equity interest over its closing date carrying value of approximately $13.6 million. Allocation of Consideration Transferred The following table summarizes the allocation of the purchase consideration to the fair values of the identifiable assets acquired and liabilities assumed as of the date of the Broad Arrow Acquisition (in thousands): Notes receivable (1) $ 21,594 Intangible assets, net (2) 3,100 Other assets (3) 11,756 Other liabilities (4) (13,449) Total identifiable net assets acquired 23,001 Goodwill 98,561 Total purchase consideration allocated to net assets acquired $ 121,562 (1) Broad Arrow makes term loans secured by collector cars. The fair value of the acquired loans approximates their carrying value due to the relatively short-term maturities and market rates of interest associated with most loans. Refer to Note 3 — Notes Receivable for additional information with respect to the Broad Arrow loan portfolio. (2) The fair value of the identifiable intangible assets acquired is a Level 3 fair value measurement, estimated using significant assumptions that are not observable in the market through the use of a discounted cash flow model. Inputs utilized in this model include the discount rate and terminal growth rate, as well as the return on assets. Identifiable intangible assets acquired consisted of trade names of $3.1 million with a 5-year estimated useful life. (3) Other assets includes $2.8 million of cash acquired, $2.6 million of Accounts receivable and $6.2 million of Other current assets. (4) Other liabilities includes a $7.0 million Note payable, $5.3 million of Contract liabilities and $0.7 million of Accounts payable. The excess of the purchase consideration over the aggregate estimated fair values of identifiable assets acquired, net of liabilities assumed was recorded as goodwill. The goodwill recognized is primarily a result of the expected enhancement of Marketplace through Broad Arrow's various service offerings, including buying, selling and financing of collector cars through classified listings, auctions and facilitating private sales, as well as the assembled workforce and various other factors. The acquisition of Broad Arrow was not material to the Company's Condensed Consolidated Statements of Operations. Therefore, pro forma results of operations related to this acquisition have not been presented. Following the Broad Arrow Acquisition, the financial statements of Broad Arrow are consolidated into the Company's Condensed Consolidated Financial Statements. Speed Digital Acquisition In April 2022, Hagerty acquired Speed Digital LLC ("Speed Digital") for a purchase price of $15.0 million. The Company paid $7.5 million at closing with an additional two annual installments of $3.75 million to be paid in 2023 and 2024. The first annual installment was paid during the six months ended June 30, 2023 and the second annual installment will be paid in the first quarter of 2024. Speed Digital was previously wholly-owned indirectly by Robert Kauffman, a member of the Company's Board of Directors (the "Board"), who will receive 100% of the proceeds of the purchase price. Speed Digital operates a software as a service ("SaaS") business primarily serving collector car dealers and auction houses, and an advertising and content syndication platform, which includes Motorious.com. The Company acquired Speed Digital to enhance the Marketplace business to establish relationships with their dealer partners and facilitate growth in Marketplace products; augment the Company's automotive intelligence data; and allow Motorious.com to drive audience engagement, content distribution, and advertising revenue. |
Acquisitions and Investments | 6 — Acquisitions and Investments During the six months ended June 30, 2023 and 2022, the Company completed business combinations and asset acquisitions with an aggregate purchase price, including deferred consideration, of $2.7 million and $18.5 million, respectively. Broad Arrow Acquisition In January 2022, Hagerty entered into a joint venture with Broad Arrow, pursuant to which Hagerty invested $15.3 million in cash in exchange for equity ownership of approximately 40% of Broad Arrow. The Company followed equity method accounting for its investment in Broad Arrow with the carrying amount recorded within "Equity method investments" on the Condensed Consolidated Balance Sheets as of June 30, 2022 and the Company's share of income (loss) related to Broad Arrow recorded within "Income (loss) from equity method investment, net of tax" on the Condensed Consolidated Statements of Operations. In August 2022, the Company acquired the remaining 60% of Broad Arrow from the former Broad Arrow shareholders in exchange for equity consideration (the "Broad Arrow Acquisition") consisting of shares of the Company's Class A Common Stock and Hagerty Group Units. The number of Class A Common Stock shares and Hagerty Group Units issued was calculated using a 20-day Volume Weighted Average Stock Price of Class A Common Stock prior to the closing date on August 16, 2022. The fair value of the purchase consideration of $73.3 million was calculated based on the Class A Common Stock price of $13.47 as of the closing date. As a result of the Broad Arrow Acquisition, the Company and Broad Arrow expect to further leverage their respective product offerings and continue to build Marketplace. Fair Value of Consideration Transferred The Broad Arrow Acquisition was accounted for as a business combination achieved in stages (i.e., a step acquisition). The following table summarizes the fair value of Broad Arrow as of the date of the acquisition (in thousands): Total equity consideration $ 73,253 Fair value of previously held equity interest in Broad Arrow (1) 48,309 Total consideration and value to be allocated to net assets $ 121,562 (1) The Broad Arrow Acquisition was accounted for as a step acquisition. Accordingly, the Company remeasured its pre-existing 40% equity interest in Broad Arrow immediately prior to the completion of the acquisition to its estimated fair value of approximately $48.3 million. This fair value was derived from the Hagerty, Inc. stock price of $13.47 as of the closing date and thus represents a Level 1 fair value measurement. As a result of the remeasurement, the Company recorded a net gain of approximately $34.7 million in the third quarter of 2022, representing the excess of the $48.3 million estimated fair value of its pre-existing 40% equity interest over its closing date carrying value of approximately $13.6 million. Allocation of Consideration Transferred The following table summarizes the allocation of the purchase consideration to the fair values of the identifiable assets acquired and liabilities assumed as of the date of the Broad Arrow Acquisition (in thousands): Notes receivable (1) $ 21,594 Intangible assets, net (2) 3,100 Other assets (3) 11,756 Other liabilities (4) (13,449) Total identifiable net assets acquired 23,001 Goodwill 98,561 Total purchase consideration allocated to net assets acquired $ 121,562 (1) Broad Arrow makes term loans secured by collector cars. The fair value of the acquired loans approximates their carrying value due to the relatively short-term maturities and market rates of interest associated with most loans. Refer to Note 3 — Notes Receivable for additional information with respect to the Broad Arrow loan portfolio. (2) The fair value of the identifiable intangible assets acquired is a Level 3 fair value measurement, estimated using significant assumptions that are not observable in the market through the use of a discounted cash flow model. Inputs utilized in this model include the discount rate and terminal growth rate, as well as the return on assets. Identifiable intangible assets acquired consisted of trade names of $3.1 million with a 5-year estimated useful life. (3) Other assets includes $2.8 million of cash acquired, $2.6 million of Accounts receivable and $6.2 million of Other current assets. (4) Other liabilities includes a $7.0 million Note payable, $5.3 million of Contract liabilities and $0.7 million of Accounts payable. The excess of the purchase consideration over the aggregate estimated fair values of identifiable assets acquired, net of liabilities assumed was recorded as goodwill. The goodwill recognized is primarily a result of the expected enhancement of Marketplace through Broad Arrow's various service offerings, including buying, selling and financing of collector cars through classified listings, auctions and facilitating private sales, as well as the assembled workforce and various other factors. The acquisition of Broad Arrow was not material to the Company's Condensed Consolidated Statements of Operations. Therefore, pro forma results of operations related to this acquisition have not been presented. Following the Broad Arrow Acquisition, the financial statements of Broad Arrow are consolidated into the Company's Condensed Consolidated Financial Statements. Speed Digital Acquisition In April 2022, Hagerty acquired Speed Digital LLC ("Speed Digital") for a purchase price of $15.0 million. The Company paid $7.5 million at closing with an additional two annual installments of $3.75 million to be paid in 2023 and 2024. The first annual installment was paid during the six months ended June 30, 2023 and the second annual installment will be paid in the first quarter of 2024. Speed Digital was previously wholly-owned indirectly by Robert Kauffman, a member of the Company's Board of Directors (the "Board"), who will receive 100% of the proceeds of the purchase price. Speed Digital operates a software as a service ("SaaS") business primarily serving collector car dealers and auction houses, and an advertising and content syndication platform, which includes Motorious.com. The Company acquired Speed Digital to enhance the Marketplace business to establish relationships with their dealer partners and facilitate growth in Marketplace products; augment the Company's automotive intelligence data; and allow Motorious.com to drive audience engagement, content distribution, and advertising revenue. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7 — Goodwill and Intangible Assets Goodwill The following is a reconciliation of the changes in the Company's goodwill for the six months ended June 30, 2023 and 2022: 2023 2022 in thousands Goodwill as of January 1, $ 115,041 $ 11,488 Goodwill resulting from acquisition — 5,044 Effect of foreign currency translation 19 (7) Goodwill as of June 30, $ 115,060 $ 16,525 Refer to Note 6 — Acquisitions and Investments for information related to the Company's acquisitions of Speed Digital, in April 2022, and Broad Arrow, in August 2022, which together resulted in the recognition of $103.6 million of goodwill. Intangible Assets The cost and accumulated amortization of intangible assets as of June 30, 2023 and December 31, 2022 are as follows: Weighted Average Useful Life June 30, 2023 December 31, 2022 in thousands Renewal rights 10.0 $ 20,221 $ 17,282 Internally developed software 3.1 119,885 109,764 Trade names and trademarks 14.0 12,541 12,541 Relationships and customer lists 15.4 13,898 13,890 Other 4.4 1,445 1,434 Intangible assets 167,990 154,911 Less: accumulated amortization (64,164) (50,887) Intangible assets, net $ 103,826 $ 104,024 Intangible asset amortization expense was $7.0 million and $5.3 million for the three months ended June 30, 2023 and 2022, respectively, and $13.8 million and $9.5 million for the six months ended June 30, 2023 and 2022, respectively. The estimated future aggregate amortization expense as of June 30, 2023 is as follows (in thousands): 2023 $ 16,808 2024 26,110 2025 18,760 2026 11,176 2027 8,376 Thereafter 22,596 Total $ 103,826 |
Provision for Unpaid Losses and
Provision for Unpaid Losses and Loss Adjustment Expenses | 6 Months Ended |
Jun. 30, 2023 | |
Insurance [Abstract] | |
Provision for Unpaid Losses and Loss Adjustment Expenses | 8 — Provision for Unpaid Losses and Loss Adjustment Expenses The following table presents a reconciliation of the beginning and ending provision for unpaid losses and loss adjustment expenses related to Hagerty Re, net of amounts recoverable from reinsurers: Six months ended 2023 2022 in thousands Gross reserves for unpaid losses and loss adjustment expenses, beginning of year $ 111,741 $ 74,869 Less: Reinsurance recoverable on unpaid losses and loss adjustment expenses 843 — Net reserves for unpaid losses and loss adjustment expenses, beginning of year 110,898 74,869 Incurred losses and loss adjustment expenses: Current accident year 101,976 75,539 Prior accident year — — Total incurred losses and loss adjustment expenses 101,976 75,539 Payments: Current accident year 8,639 6,698 Prior accident year 32,744 19,706 Total payments 41,383 26,404 Effect of foreign currency rate changes 104 (83) Net reserves for unpaid losses and loss adjustment expenses, end of period 171,595 123,921 Reinsurance recoverable on unpaid losses and loss adjustment expenses 538 — Gross reserves for unpaid losses and loss adjustment expenses, end of period $ 172,133 $ 123,921 In updating Hagerty Re's loss reserve estimates, inputs are considered and evaluated from many sources, including actual claims data, the performance of prior reserve estimates, observed industry trends, and internal review processes, including the views of the Company’s actuary. These inputs are used to improve evaluation techniques and to analyze and assess the change in estimated ultimate losses for each accident year by line of business. These analyses produce a range of indications from various methods, from which an actuarial point estimate is selected. |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2023 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Reinsurance | 9 — Reinsurance The following table presents Hagerty Re's total premiums assumed and ceded on a written and earned basis for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands Premiums: Assumed $ 188,456 $ 139,627 $ 320,643 $ 237,255 Ceded (8,541) — (22,269) (9,690) Net $ 179,915 $ 139,627 $ 298,374 $ 227,565 Premiums earned: Assumed $ 132,123 $ 96,504 $ 252,520 $ 187,860 Ceded (4,641) (2,404) (7,807) (4,628) Net $ 127,482 $ 94,100 $ 244,713 $ 183,232 Ceded Reinsurance Hagerty Re purchases catastrophe reinsurance to protect its capital from large catastrophic events and to provide earnings protection and stability. The 2023 catastrophe reinsurance program splits the exposure between accounts with total insured values ("TIV") of up to $5.0 million and U.S. accounts with TIV of $5.0 million and above ("High-Net-Worth Accounts"). Accounts with TIV of up to $5.0 million are afforded $105.0 million of coverage excess of a per event retention of $25.0 million in two layers; $25.0 million excess of $25.0 million and $55.0 million excess of $50.0 million. High-Net-Worth Accounts in the U.S. are covered by a separate catastrophe reinsurance program which provides $30.0 million excess of per event retention of $9.0 million in one layer; $21.0 million excess of $9.0 million. In addition to the aforementioned catastrophe coverage, Hagerty Re has entered into quota share agreements to cede a portion of the risk on High-Net-Worth Accounts assumed from Evanston. Specifically, Hagerty Re is ceding 20% of the physical damage exposure effective January 1, 2023, and is ceding an additional 50% of the overall exposure effective March 1, 2023, under quota share agreements with various reinsurers, some of which are related parties. Refer to Note 20 — Related-Party Transactions for additional information. Hagerty Re receives ceding commissions from premiums ceded under reinsurance contracts related to High-Net-Worth Accounts. Ceding commissions are recognized ratably over the terms of the related policies, which are generally 12 months, and are recorded net within "Ceding commission" in the Company's Condensed Consolidated Statements of Operations. Deferred portions of ceding commissions received are included in "Accounts payable, accrued expenses and other current liabilities" in the Company's Condensed Consolidated Balance Sheets. The following table presents reinsurance recoverable on paid and unpaid losses and loss adjustment expenses as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, in thousands Reinsurance recoverable on paid losses and loss adjustment expenses $ 106 $ 605 Reinsurance recoverable on unpaid losses and loss adjustment expenses 538 843 Total reinsurance recoverable $ 644 $ 1,448 December 31, Reinsurance contracts do not relieve Hagerty Re from its primary liability to the ceding carriers according to the terms of its reinsurance treaties. Failure of reinsurers to honor their obligations could result in additional losses to Hagerty Re. Hagerty Re evaluates the financial condition of its reinsurers and monitors concentration of credit risk arising from its exposure to individual reinsurers. All of Hagerty Re's reinsurers have an A.M. Best rating of A- (excellent) or better, or fully collateralize their maximum obligation under the treaty. |
Restructuring, Impairment and R
Restructuring, Impairment and Related Charges | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment and Related Charges | 10 — Restructuring, Impairment and Related Charges In 2022, management approved an initiative to increase operational efficiencies and flexibility by transitioning to a "remote first" work model for employees. This initiative primarily included the rationalization of the Company's office space throughout the U.S., Canada, and the U.K. Additionally, in the fourth quarter of 2022, the Board approved a voluntary retirement program ("VRP") and a reduction in force (the "2022 RIF"). As a result of these actions (collectively, the "2022 Restructuring Actions"), the Company recognized $18.3 million within "Restructuring, impairment and related charges, net" in the Consolidated Statements of Operations for the year ended December 31, 2022. These charges consisted of $8.0 million of severance related costs associated with the 2022 RIF and $4.2 million of severance related costs associated with the VRP, as well as an impairment charge of $4.7 million related to operating lease ROU assets and a $1.5 million loss on the disposal of leasehold improvements associated with the impaired leases. In the first quarter of 2023, the Board approved a further reduction in force (the "2023 RIF") following a strategic review of business processes as the Company focuses on driving efficiencies in order to achieve growth and profitability goals. As a result of these actions (collectively, the "2023 Restructuring Actions"), in the first quarter of 2023, the Company recognized $5.5 million within "Restructuring, impairment and related charges, net" in the Condensed Consolidated Statements of Operations. These charges consist of $5.1 million of severance related costs associated with the 2023 RIF and a $0.4 million impairment charge to write-down the value of certain digital media content assets. In the second quarter of 2023, the Company recognized $2.8 million of "Restructuring, impairment and related charges, net". These charges include $2.6 million of impairment and related charges associated with operating lease ROU assets and leasehold improvements for office space that was vacated and listed for sublease in the period as a result of the Company's continuing transition to a "remote first" work model. The amount recognized in the second quarter of 2023 also includes $0.2 million of additional severance related costs associated with the 2023 RIF. The following is a reconciliation of the liability related to the 2022 Restructuring Actions and the 2023 Restructuring Actions, which is recorded within "Accounts payable, accrued expenses and other current liabilities" on the Condensed Consolidated Balance Sheets. The remaining liability as of June 30, 2023 is expected to be settled in the third quarter of 2023. in thousands Balance at December 31, 2022 $ 9,470 Costs incurred and charged to expense 8,384 Costs paid or otherwise settled (1) (16,995) Balance at June 30, 2023 $ 859 (1) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11 — Fair Value Measurements Hagerty measures and discloses fair values in accordance with the provisions of ASC 820. The Company’s recurring significant fair value measurements primarily relate to interest rate swaps, warrant liabilities, and fixed income investments. The Company uses valuation techniques based on inputs such as observable data, independent market data, and/or unobservable data. Additionally, the Company makes assumptions in valuing its assets and liabilities, including assumptions about risk and the risks inherent in the inputs to the valuation techniques. The Company classifies fair value measurements within one of three levels in the fair value hierarchy. The level assigned to a fair value measurement is based on the lowest level input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input requires judgment. The three levels of the fair value hierarchy are as follows: • Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 — Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for substantially the full term of the asset or liability. • Level 3 — Unobservable inputs that management believes are predicated on the assumptions market participants would use to measure the asset or liability at fair value. The Company's policy is to recognize significant transfers between levels, if any, at the end of the reporting period. Recurring fair value measurements Interest rate swaps Interest rate swaps are determined to be Level 2 within the fair value hierarchy. The significant inputs, such as the Secured Overnight Financing Rate ("SOFR") forward curve, of interest rate swaps are considered observable market inputs. The Company monitors the credit and nonperformance risk associated with its counterparty and believes them to be insignificant. Refer to Note 13 — Interest Rate Swaps for additional information. Warrant liabilities The Company's 5,750,000 Public Warrants are Level 1 within the fair value hierarchy as they are measured utilizing quoted market prices. The Company has determined that its 257,500 Private Placement Warrants, 28,750 Underwriter Warrants, 1,300,000 OTM Warrants, and 12,147,300 PIPE Warrants are Level 3 within the fair value hierarchy. The Company utilizes a Monte Carlo simulation model to measure the fair value of the private warrants. The Company’s Monte Carlo simulation model includes assumptions related to the expected stock-price volatility, expected term, dividend yield, and risk-free interest rate. Refer to Note 17 — Warrant Liabilities for additional information. The following table summarizes the significant inputs used in the valuation model for the private warrants as of June 30, 2023: Inputs Private Placement Warrants Underwriter Warrants OTM Warrants PIPE Warrants Exercise price $11.50 $11.50 $15.00 $11.50 Common stock price $9.36 $9.36 $9.36 $9.36 Volatility 42.5% 42.5% 41.0% 42.5% Expected term of the warrants 3.43 3.43 8.43 3.43 Risk-free rate 4.40% 4.40% 3.90% 4.40% Dividend yield —% —% —% —% The Company estimates the volatility of its common stock based on factors including, but not limited to, implied volatility of the Public Warrants, the historical performance of comparable companies, and management's understanding of the volatility associated with similar instruments of other entities. The risk-free rate is based on the yield of the U.S. Treasury Constant Maturity for a term that approximates the expected remaining life, which is assumed to be the remaining contractual term, of the warrants. The dividend rate is based on the Company’s historical rate, which the Company anticipates to remain at zero. The fair value of the Company's financial assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022, are shown in the tables below: Fair Value Measurements Total Level 1 Level 2 Level 3 in thousands June 30, 2023 Financial Assets Interest rate swaps $ 3,146 $ — $ 3,146 $ — Total $ 3,146 $ — $ 3,146 $ — Financial Liabilities Public warrants $ 13,512 $ 13,512 $ — $ — Private placement warrants 689 — — 689 Underwriter warrants 77 — — 77 OTM warrants 4,937 — — 4,937 PIPE warrants 28,615 — — 28,615 Total $ 47,830 $ 13,512 $ — $ 34,318 December 31, 2022 Financial Assets Interest rate swaps $ 3,294 $ — $ 3,294 $ — Total $ 3,294 $ — $ 3,294 $ — Financial Liabilities Public warrants $ 12,880 $ 12,880 $ — $ — Private placement warrants 673 — — 673 Underwriter warrants 75 — — 75 OTM warrants 4,706 — — 4,706 PIPE warrants 27,227 — — 27,227 Total $ 45,561 $ 12,880 $ — $ 32,681 The following table presents a reconciliation of the Company's warrant liabilities that are classified as Level 3 within the fair value hierarchy for the six months ended June 30, 2023 and 2022: Private Placement Warrants Underwriter Warrants OTM Warrants PIPE Warrants Total in thousands Balance at December 31, 2021 $ 1,248 $ 139 $ 6,849 $ 55,887 $ 64,123 Change in fair value of warrant liabilities (402) (44) (1,301) (16,834) (18,581) Exercise of warrants — — — (1,906) (1,906) Balance at June 30, 2022 $ 846 $ 95 $ 5,548 $ 37,147 $ 43,636 Balance at December 31, 2022 $ 673 $ 75 $ 4,706 $ 27,227 $ 32,681 Change in fair value of warrant liabilities 16 2 231 1,388 1,637 Balance at June 30, 2023 $ 689 $ 77 $ 4,937 $ 28,615 $ 34,318 Fixed Income Investments The Company has fixed income investments that consist of Canadian Sovereign, Provincial and Municipal fixed income securities held in a trust account to meet the requirements of a third-party insurer, Aviva, in connection with Hagerty Re's reinsurance agreement. The Company classifies its fixed income investments in connection with its reinsurance agreement as held-to-maturity, as the Company has the intent and ability to hold these investments to maturity. The Company has determined that its fixed income investments are Level 2 within the fair value hierarchy, as these investments are valued using observable inputs such as quoted prices for similar assets at the measurement date. The critical credit quality indicator for the fixed income investments is the credit ratings of the issuer. Management considers all of the fixed income investments currently held by Hagerty Re to be investment grade. The following table discloses the fair value and related carrying amount of fixed income investments held within Hagerty Re as of June 30, 2023 and December 31, 2022: Carrying Amount Estimated Fair Value in thousands June 30, 2023 Short-term $ 7,930 $ 7,817 Long-term 8,559 8,243 Total $ 16,489 $ 16,060 December 31, 2022 Short-term $ 6,296 $ 6,205 Long-term 6,690 6,316 Total $ 12,986 $ 12,521 Each reporting period management reviews the credit-rating of each security to ensure it is considered investment grade. Based on the factors outlined above, as of June 30, 2023, the Company does not expect any credit losses related to the fixed income investments and therefore there is no allowance for credit losses recorded. The Company did not record any gains or losses on these securities during the six months ended June 30, 2023 or 2022. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 12 — Long-Term Debt As of June 30, 2023 and December 31, 2022, "Long-term debt" consisted of the following: June 30, 2023 December 31, 2022 in thousands Credit Facility $ 75,008 $ 105,000 Notes payable 5,833 3,280 Total debt outstanding 80,841 108,280 Less: current portion — — Total long-term debt outstanding $ 80,841 $ 108,280 Credit Facility — In January and April 2023, The Hagerty Group entered into the Sixth and Seventh Amendments to Amended and Restated Credit Agreement (the "Credit Agreement"), which amended the terms of its revolving credit facility (the "Credit Facility") with JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions party thereto from time to time as lenders. The primary purpose of the amendments was to clarify certain definitions within the Credit Agreement. In June 2023, The Hagerty Group entered into the Eighth Amendment to the Credit Agreement, which amended certain definitions in order to permit the Series A Convertible Preferred Stock and the Debt Financing Commitment described below. Refer to Note 14 — Convertible Preferred Stock for additional information related to the Series A Convertible Preferred Stock. The aggregate amount of commitments available under the Credit Facility is $230.0 million. The Credit Agreement also provides for an uncommitted incremental facility under which the Company may request one or more increases in the amount of the commitments available under the Credit Facility in an aggregate amount not to exceed $50.0 million. Additionally, the Credit Agreement also provides for the issuance of letters of credit of up to $25.0 million and borrowings in the British Pound and Euro of up to $25.0 million in the aggregate. The current term of the Credit Agreement expires in October 2026 and may be extended by one year on an annual basis if agreed to by the Company and the lenders party thereto. Any unpaid balance on the Credit Facility is due at maturity. The Credit Facility accrues interest at the applicable reference rate (primarily Term SOFR) depending on the currency of the borrowing plus an applicable margin determined by the Company's net leverage ratio for the preceding period (as defined in the Credit Agreement). The effective weighted-average borrowing rate was 7.38% for the six months ended June 30, 2023. Credit Facility borrowings are collateralized by assets of The Hagerty Group and its consolidated subsidiaries, except for the assets of the Company’s U.K., Bermuda, Canadian and German subsidiaries and the non-wholly owned subsidiaries of MHH. In January 2023, Broad Arrow Europe Limited and Broad Arrow Capital UK Limited were joined to the Credit Facility as co-borrowers. Under the Credit Agreement, The Hagerty Group is required, among other things, to meet certain financial covenants (as defined in the Credit Agreement), including a fixed charge coverage ratio and a leverage ratio. As of June 30, 2023 and December 31, 2022, the Company was in compliance with the financial covenants under the Credit Agreement. Notes Payable — As of June 30, 2023 and December 31, 2022, the Company had outstanding notes payable, which are used to fund certain loans made by Broad Arrow in the U.K., totaling $5.8 million and $3.3 million, respectively. The effective interest rates for these notes payable range from 7.0% to 9.0% with repayment due between October 2024 and March 2025. Refer to Note 3 — Notes Receivable for additional information on the lending activities of Broad Arrow. Letters of Credit — The Company authorized four letters of credit for a total of $11.6 million for operational purposes related to Section 953(d) tax structuring election and lease down payment support. Debt Financing Commitment — Hagerty Re has obtained a debt financing commitment from State Farm for an unsecured term loan credit facility in the aggregate principal amount of $25.0 million, on the terms and subject to the conditions set forth in a commitment letter, dated as of June 23, 2023 (the "Debt Commitment Letter"). The obligations of State Farm to provide debt financing under the Debt Commitment Letter are subject to approval from the Bermuda Monetary Authority and other customary conditions, including, without limitation, execution and delivery of definitive documentation consistent with the Debt Commitment Letter. State Farm is a related party to the Company. Refer to Note 20 — Related-Party Transactions for additional information. |
Interest Rate Swaps
Interest Rate Swaps | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swaps | 13 — Interest Rate Swaps Hagerty's interest rate swap agreements are used to fix the interest rate on a portion of the Company's existing variable rate debt to reduce the exposure to interest rate fluctuations. The notional amounts of the interest rate swap agreements are used to measure interest to be paid or received and do not represent the amount of exposure to credit loss. The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense within "Interest and other income (expense)" in the Condensed Consolidated Statements of Operations. As of June 30, 2023, the Company had one outstanding interest rate swap, which was entered into in December 2020, with an original notional amount of $35.0 million and maturity in December 2025. In September 2022, the interest rate swap was amended to replace LIBOR with Term SOFR and, as a result, the fixed swap rate is now 0.81%. The estimated fair value of the interest rate swap is included within either "Other long-term assets" or "Other long-term liabilities" on the Condensed Consolidated Balance Sheets and the change in fair value is recorded within "Derivative instruments" in the Condensed Consolidated Statements of Comprehensive Income (Loss). In accordance with ASC Topic 815 Derivatives and Hedging (" |
Convertible Preferred Stock
Convertible Preferred Stock | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Convertible Preferred Stock | 14 — Convertible Preferred Stock On June 23, 2023, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with certain accredited investors (the "Investors"), pursuant to which it closed, issued and sold (the "Closing") to the Investors an aggregate of 8,483,561 shares of the Company’s newly-designated Series A Convertible Preferred Stock, par value $0.0001 per share, for an aggregate purchase price of $80.0 million, at a per-share purchase price of $9.43 (the "Series A Purchase Price" and the transaction, the "Private Placement"). The Investors include State Farm, Markel, and persons related to Hagerty Holding Corp. ("HHC"). State Farm and Markel are both significant stockholders of the Company, each holding in excess of 5% of the outstanding common stock. McKeel Hagerty is the Company’s CEO and a member of the Company’s Board of Directors. Mr. Hagerty and Tammy Hagerty may be deemed to control HHC, which is the controlling stockholder of the Company. Prior to and continuing after the Private Placement, each of State Farm and Markel have the right to nominate one director to the Company’s Board of Directors. HHC has the right to nominate two directors to the Company’s Board of Directors. Refer to Note 15 — Stockholders' Equity and Note 20 — Related-Party Transactions for additional information. The net proceeds from the Private Placement, after deducting issuance costs of approximately $0.8 million, were $79.2 million, which was recorded within Temporary Equity on the Company’s Condensed Consolidated Balance Sheets. The Company expects to use the net proceeds from the Private Placement for general corporate purposes. As of June 30, 2023, the estimated redemption value of the Series A Convertible Preferred Stock was $123.4 million, which represents the maximum cash payment, including cumulative dividends, that would be required to be paid if the Optional Term Redemption provision in the Certificate of Designations, as summarized below, is exercised as of the earliest possible redemption date of June 23, 2028. The decision to redeem the Series A Convertible Preferred Stock for cash is made at the discretion of the Company; however, the Company is controlled by HHC through its voting control of the Company. Accordingly, the redemption of the Series A Convertible Preferred Stock is considered outside the control of the Company and, as a result, the Series A Convertible Preferred Stock is recorded within Temporary Equity on the Company's Condensed Consolidated Balance Sheets. The Company has elected to apply the accretion method to adjust the carrying value of the Series A Convertible Preferred Stock to its estimated redemption value. Amounts recognized to accrete the Series A Convertible Preferred Stock to its estimated redemption value are treated as a deemed dividend and are recorded as a reduction to "Additional paid-in capital". The estimated redemption value may vary in subsequent periods and the Company has elected to recognize such changes prospectively. The accretion to the estimated redemption value attributable to the seven-day period that the Series A Convertible Preferred Stock was outstanding during the six months ended June 30, 2023 was not material. The captioned sections below provide a summary of the material terms of the Series A Convertible Preferred Stock, as set forth in the Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred Stock (the "Certificate of Designations"). Ranking — The Series A Convertible Preferred Stock ranks senior to the Class A Common Stock, the Class V Common Stock and each other class or series of shares of the Company that the Company may issue in the future the terms of which do not expressly provide that such class or series ranks equally with, or senior to, the Series A Convertible Preferred Stock, with respect to dividend rights and/or rights upon liquidation, winding up or dissolution. Dividends — Dividends on the Series A Convertible Preferred Stock are cumulative and accrue from the date of issuance at the rate per annum of 7% of the Series A Purchase Price of each share, plus the amount of previously accrued dividends, compounded annually (the "Accruing Dividends"). The Company may elect to pay the Accruing Dividends either in cash or in additional shares of Series A Convertible Preferred Stock. Prior to the third anniversary of the Closing, the Series A Convertible Preferred Stock will participate on an as-converted basis in dividends declared and paid on the Class A Common Stock. Conversion — Any shares of Series A Convertible Preferred Stock may, at the option of the holder, be converted at any time into shares of Class A Common Stock. The conversion price for the Series A Convertible Preferred Stock is initially $11.79 and is subject to adjustment upon certain events, including a stock split, a reverse stock split, or a dividend of the Class A Common Stock or Class V Common Stock to the Company’s common stockholders (as adjusted, the "Conversion Price"). The Company may require such conversion (i) if the closing price per share of Class A Common Stock, for at least twenty (20) of any thirty (30) consecutive trading days, exceeds: (a) on or after the third and prior to the seventh anniversary of the Closing, 150% of the Conversion Price; or (b) on or after the seventh and prior to the tenth anniversary of the Closing, 100% of the Conversion Price; and (ii) on or after the tenth anniversary of the Closing. The conversion rate in effect at any applicable time (the "Conversion Rate") is the quotient obtained by dividing the Series A Purchase Price by the Conversion Price. As of June 30, 2023, no shares of Series A Convertible Preferred Stock have been converted and the outstanding Series A Convertible Preferred Stock was convertible into 6,785,410 shares of Class A Common Stock. Voting — The Series A Convertible Preferred Stock votes together with the Class A Common Stock on an as-converted basis, and not as a separate class. The Investors have veto rights over (i) changes to the terms of the Certificate of Designations or the Company's certificate of incorporation or bylaws that adversely impact the Series A Convertible Preferred Stock and (ii) the issuance of equity securities senior to the Series A Convertible Preferred Stock or other securities convertible thereto. Liquidation Preference — In the event of any liquidation, dissolution or winding up of the Company, each share of Series A Convertible Preferred Stock will be paid the greater of (i) the Series A Purchase Price plus any Accruing Dividends accrued but unpaid thereon, and (ii) the amount that such share of Series A Convertible Preferred Stock would have received had it converted into the Class A Common Stock immediately prior to such liquidation, dissolution or winding up of the Company (the "Liquidation Preference"). After payment of the Liquidation Preference, the Series A Convertible Preferred Stock will no longer be convertible and will not participate in any distribution made to the holders of the Class A Common Stock or Class V Common Stock. Change of Control — Upon a merger, consolidation, sale or other change of control transaction as described in the Certificate of Designations (a "Change of Control"), either (i) the Company may elect to redeem the Series A Convertible Preferred Stock or (ii) each holder of Series A Convertible Preferred Stock, individually, may require the Company to redeem all or any portion of its Series A Convertible Preferred Stock. The redemption price per share to be paid by the Company would be the greater of: (a) the Series A Purchase Price plus any accrued but unpaid Accruing Dividends multiplied by (i) if prior to or on the third anniversary of the Closing, 120%; (ii) if after the third but prior to or on the fifth anniversary of the Closing, 110%; (iii) if after the fifth anniversary of the Closing, 100%; and (b) the amount such share of Series A Convertible Preferred Stock would have received had it converted into the Class A Common Stock prior to the Change of Control. Any shares of Series A Convertible Preferred Stock that are not so redeemed will automatically convert into shares of the Class A Common Stock and be paid in connection with the Change of Control. Fundamental Transaction — In the event of any acquisition by the Company with a transaction value of at least $500.0 million or any equity or debt financing by the Company that raises at least $500.0 million, either (i) the Company may elect to redeem the Series A Convertible Preferred Stock, or (ii) each holder of Series A Convertible Preferred Stock, individually, may require the Company to redeem all or any portion of its Series A Convertible Preferred Stock. The redemption price per share to be paid by the Company would be the Series A Convertible Preferred Stock plus any accrued but unpaid Accruing Dividends multiplied by: (a) if prior to or on the third anniversary of the Closing, 120%; (b) if after the third but prior to or on the fifth anniversary of the Closing, 110%; (c) if after the fifth but prior to or on the sixth anniversary of the Closing, 108%; (d) if after the sixth but prior to or on the seventh anniversary of the Closing, 106%; (e) if after the seventh but prior to or on the eighth anniversary of the Closing, 104%; (f) if after the eighth but prior to or on the ninth anniversary of the Closing, 102%; or (g) if after the ninth anniversary of the Closing, 100%. Optional Term Redemption — Any time after the fifth anniversary of the Closing, the Company may redeem all or any portion of the then-outstanding shares of the Series A Convertible Preferred Stock for cash (a "Term Redemption"). The redemption price per share to be paid by the Company would be equal to the greater of: (i) the Series A Purchase Price plus any accrued but unpaid Accruing Dividends multiplied by: (a) if after the fifth but prior to the sixth anniversary of the Closing, 110%; (b) if on or after the sixth but prior to the seventh anniversary of the Closing, 108%; (c) if on or after the seventh but prior to the eighth anniversary of the Closing, 106%; (d) if on or after the eighth but prior to the ninth anniversary of the Closing, 104%; (e) if on or after the ninth but prior to tenth anniversary of the Closing, 102%; or (f) if on or after the tenth anniversary of the Closing, 100%; and (ii) the amount such share of Series A Convertible Preferred Stock would have received had it converted into Class A Common Stock prior to the Term Redemption. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | 15 — Stockholders' Equity Class A Common Stock — Hagerty is authorized to issue 500,000,000 shares of Class A Common Stock with a par value of $0.0001 per share. Holders of Class A Common Stock are entitled to one vote for each share. As of June 30, 2023 and December 31, 2022, there were 84,405,625 and 83,202,969 shares of Class A Common Stock issued and outstanding, respectively. Class V Common Stock — Hagerty is authorized to issue 300,000,000 shares of Class V Common Stock with a par value of $0.0001 per share. Class V Common Stock represents voting, non-economic interests in Hagerty. Holders of Class V Common Stock are entitled to 10 votes for each share. In connection with the Business Combination, Hagerty issued shares of Class V Common Stock to HHC and Markel (together the "Legacy Unit Holders") along with an equivalent number of Hagerty Group Units, as discussed below. Each share of Class V Common Stock, together with the corresponding Hagerty Group Unit, is exchangeable for one share of Class A Common Stock. As of June 30, 2023 and December 31, 2022, there were 251,033,906 shares of Class V Common Stock issued and outstanding. Preferred Stock — Hagerty is authorized to issue 20,000,000 shares of Preferred Stock with a par value of $0.0001 per share. Hagerty's Board has the authority to issue shares of Preferred Stock with such designations, voting and other rights and preferences as may be determined from time to time. On June 23, 2023, the Company issued 8,483,561 shares of the Company’s newly-designated Series A Convertible Preferred Stock, par value $0.0001 per share, for an aggregate purchase price of $80.0 million, at a per-share purchase price of $9.43. Refer to Note 14 — Convertible Preferred Stock for additional information. As of December 31, 2022, there were no shares of Preferred Stock issued and outstanding. Non-controlling Interests — Hagerty, Inc. is the sole managing member of The Hagerty Group and, as a result, consolidates the financial statements of The Hagerty Group into its Condensed Consolidated Financial Statements. Hagerty, Inc. reports a non-controlling interest representing the economic interest in The Hagerty Group held by other unit holders of The Hagerty Group. Each Hagerty Group Unit and, if applicable, the associated share of Class V Common Stock, is exchangeable for one share of Class A Common Stock. During the six months ended June 30, 2023, 259,302 Hagerty Group Units were exchanged for an equal amount of Class A Common Stock. The following table summarizes the ownership of Hagerty Group Units as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Units Owned Ownership Percentage Units Owned Ownership Percentage Hagerty Group Units held by Hagerty, Inc. 84,405,625 24.8 % 83,202,969 24.5 % Hagerty Group Units held by other unit holders 255,499,164 75.2 % 255,758,466 75.5 % Total 339,904,789 100.0 % 338,961,435 100.0 % In addition to the non-controlling interest related to The Hagerty Group, a non-controlling interest is also reported for the economic ownership of MHH that is not owned or controlled by The Hagerty Group. Hagerty, Inc. consolidates its ownership of The Hagerty Group and MHH under the voting interest method. At the end of each reporting period, The Hagerty Group equity attributable to Hagerty, Inc. and the non-controlling unit holders, respectively, is reallocated to reflect their current ownership in The Hagerty Group. Redeemable Non-controlling Interest — In connection with the Business Combination, Hagerty, Inc. entered into the Legacy Unit Holders Exchange Agreement. The Legacy Unit Holders Exchange Agreement permitted the Legacy Unit Holders to exchange shares of Class V Common Stock and the associated Hagerty Group Units for an equivalent amount of shares of Class A Common Stock or, at the option of the Company, for cash. Because the Company had the option to redeem the non-controlling interest for cash and the Company is controlled by the Legacy Unit Holders through their voting control, the non-controlling interest was considered redeemable as the redemption was considered outside the Company's control. This redeemable non-controlling interest represented the economic interests of the Legacy Unit Holders. Income or loss was attributed to the redeemable non-controlling interest based on the weighted average ownership of the Hagerty Group Units outstanding during the period held by the Legacy Unit Holders. The redeemable non-controlling interest was measured at the greater of the initial fair value or the redemption value and was required to be presented as Temporary Equity on the Condensed Consolidated Balance Sheets, with a corresponding adjustment to "Additional paid-in capital" and "Accumulated earnings (deficit)". The total redeemable non-controlling interest as of December 31, 2021 was $593.3 million. For the period from January 1, 2022 to March 23, 2022, additional accretion of $1.6 billion was recognized, with a corresponding adjustment of $162.1 million and $1.4 billion to "Additional paid-in capital" and "Accumulated earnings (deficit)", respectively. On March 23, 2022, the Legacy Unit Holders Exchange Agreement was amended to revise the option for the Company to settle the exchange of Class V Common Stock and associated Hagerty Group Units in cash. Under the terms of the amendment, a cash exchange is only allowable in the event that net cash proceeds are received from a new permanent equity offering. The redeemable non-controlling interest balance of $2.1 billion as of March 23, 2022 was recorded in equity as non-controlling interest with corresponding adjustments of $1.4 billion, $528.6 million, and $215.6 million to "Accumulated earnings (deficit)", "Additional paid-in capital" and "Non-controlling interest", respectively. |
Stockholders' Equity | 15 — Stockholders' Equity Class A Common Stock — Hagerty is authorized to issue 500,000,000 shares of Class A Common Stock with a par value of $0.0001 per share. Holders of Class A Common Stock are entitled to one vote for each share. As of June 30, 2023 and December 31, 2022, there were 84,405,625 and 83,202,969 shares of Class A Common Stock issued and outstanding, respectively. Class V Common Stock — Hagerty is authorized to issue 300,000,000 shares of Class V Common Stock with a par value of $0.0001 per share. Class V Common Stock represents voting, non-economic interests in Hagerty. Holders of Class V Common Stock are entitled to 10 votes for each share. In connection with the Business Combination, Hagerty issued shares of Class V Common Stock to HHC and Markel (together the "Legacy Unit Holders") along with an equivalent number of Hagerty Group Units, as discussed below. Each share of Class V Common Stock, together with the corresponding Hagerty Group Unit, is exchangeable for one share of Class A Common Stock. As of June 30, 2023 and December 31, 2022, there were 251,033,906 shares of Class V Common Stock issued and outstanding. Preferred Stock — Hagerty is authorized to issue 20,000,000 shares of Preferred Stock with a par value of $0.0001 per share. Hagerty's Board has the authority to issue shares of Preferred Stock with such designations, voting and other rights and preferences as may be determined from time to time. On June 23, 2023, the Company issued 8,483,561 shares of the Company’s newly-designated Series A Convertible Preferred Stock, par value $0.0001 per share, for an aggregate purchase price of $80.0 million, at a per-share purchase price of $9.43. Refer to Note 14 — Convertible Preferred Stock for additional information. As of December 31, 2022, there were no shares of Preferred Stock issued and outstanding. Non-controlling Interests — Hagerty, Inc. is the sole managing member of The Hagerty Group and, as a result, consolidates the financial statements of The Hagerty Group into its Condensed Consolidated Financial Statements. Hagerty, Inc. reports a non-controlling interest representing the economic interest in The Hagerty Group held by other unit holders of The Hagerty Group. Each Hagerty Group Unit and, if applicable, the associated share of Class V Common Stock, is exchangeable for one share of Class A Common Stock. During the six months ended June 30, 2023, 259,302 Hagerty Group Units were exchanged for an equal amount of Class A Common Stock. The following table summarizes the ownership of Hagerty Group Units as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Units Owned Ownership Percentage Units Owned Ownership Percentage Hagerty Group Units held by Hagerty, Inc. 84,405,625 24.8 % 83,202,969 24.5 % Hagerty Group Units held by other unit holders 255,499,164 75.2 % 255,758,466 75.5 % Total 339,904,789 100.0 % 338,961,435 100.0 % In addition to the non-controlling interest related to The Hagerty Group, a non-controlling interest is also reported for the economic ownership of MHH that is not owned or controlled by The Hagerty Group. Hagerty, Inc. consolidates its ownership of The Hagerty Group and MHH under the voting interest method. At the end of each reporting period, The Hagerty Group equity attributable to Hagerty, Inc. and the non-controlling unit holders, respectively, is reallocated to reflect their current ownership in The Hagerty Group. Redeemable Non-controlling Interest — In connection with the Business Combination, Hagerty, Inc. entered into the Legacy Unit Holders Exchange Agreement. The Legacy Unit Holders Exchange Agreement permitted the Legacy Unit Holders to exchange shares of Class V Common Stock and the associated Hagerty Group Units for an equivalent amount of shares of Class A Common Stock or, at the option of the Company, for cash. Because the Company had the option to redeem the non-controlling interest for cash and the Company is controlled by the Legacy Unit Holders through their voting control, the non-controlling interest was considered redeemable as the redemption was considered outside the Company's control. This redeemable non-controlling interest represented the economic interests of the Legacy Unit Holders. Income or loss was attributed to the redeemable non-controlling interest based on the weighted average ownership of the Hagerty Group Units outstanding during the period held by the Legacy Unit Holders. The redeemable non-controlling interest was measured at the greater of the initial fair value or the redemption value and was required to be presented as Temporary Equity on the Condensed Consolidated Balance Sheets, with a corresponding adjustment to "Additional paid-in capital" and "Accumulated earnings (deficit)". The total redeemable non-controlling interest as of December 31, 2021 was $593.3 million. For the period from January 1, 2022 to March 23, 2022, additional accretion of $1.6 billion was recognized, with a corresponding adjustment of $162.1 million and $1.4 billion to "Additional paid-in capital" and "Accumulated earnings (deficit)", respectively. On March 23, 2022, the Legacy Unit Holders Exchange Agreement was amended to revise the option for the Company to settle the exchange of Class V Common Stock and associated Hagerty Group Units in cash. Under the terms of the amendment, a cash exchange is only allowable in the event that net cash proceeds are received from a new permanent equity offering. The redeemable non-controlling interest balance of $2.1 billion as of March 23, 2022 was recorded in equity as non-controlling interest with corresponding adjustments of $1.4 billion, $528.6 million, and $215.6 million to "Accumulated earnings (deficit)", "Additional paid-in capital" and "Non-controlling interest", respectively. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | 16 — Earnings (Loss) Per Share Basic earnings (loss) per share is calculated using Net income (loss) available to Class A Common Stockholders, divided by the weighted average number of shares of Class A Common Stock outstanding during the period. Diluted earnings (loss) per share is calculated using Net income (loss) available to Class A Common Stockholders divided by the weighted average number of shares of Class A Common Stock outstanding during the period, adjusted to give effect to potentially dilutive securities. The Company's potentially dilutive securities consist of (i) unexercised warrants and unvested share-based compensation awards, and shares issuable under the employee stock purchase plan, with the dilutive effect calculated using the Treasury Stock Method, and (ii) non-controlling interest Hagerty Group Units and Series A Convertible Preferred Stock, with the dilutive effect calculated using the "If-converted" Method. The following table summarizes the basic and diluted earnings per share calculations for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands, except per share amounts Earnings (Loss) Per Share of Class A Common Stock, Basic Net income (loss) available to Class A Common Stockholders $ 2,388 $ (5,536) $ 305 $ 21,971 Weighted-average shares of Class A Common Stock outstanding 84,371 82,452 83,820 82,443 Net income (loss) per share of Class A Common Stock, Basic $ 0.03 $ (0.07) $ — $ 0.27 Earnings (Loss) Per Share of Class A Common Stock, Diluted Net income (loss) available to Class A Common Stockholders $ 2,405 $ (5,536) $ 307 $ (6,546) Weighted-average shares of Class A Common Stock outstanding 85,563 82,452 84,424 334,702 Net income (loss) per share of Class A Common Stock, Diluted $ 0.03 $ (0.07) $ — $ (0.02) Net Income (Loss) Available to Class A Common Stockholders Net income (loss) $ 15,539 $ (5,543) $ 514 $ 10,323 Net loss (income) attributable to non-controlling interest (13,134) 7 (208) 11,648 Undistributed earnings allocated to Series A Convertible Preferred Stock (17) — (1) — Net income (loss) available to Class A Common Stockholders, Basic 2,388 (5,536) 305 21,971 Undistributed earnings allocated to to Series A Convertible Preferred Stock 17 — 1 — Adjustment for potentially dilutive Hagerty Group Units — — — (11,237) Adjustment for potentially dilutive Series A Convertible Preferred Stock — — 1 — Adjustment for potentially dilutive warrant liabilities — — — (17,280) Net income (loss) available to Class A Common Stockholders, Diluted $ 2,405 $ (5,536) $ 307 $ (6,546) Weighted-Average Shares of Class A Common Stock Outstanding Weighted-average shares of Class A Common Stock outstanding, Basic 84,371 82,452 83,820 82,443 Adjustment for potentially dilutive Hagerty Group Units — — — 251,034 Adjustment for potentially dilutive Series A Convertible Preferred Stock 597 — 300 — Adjustment for potentially dilutive share-based compensation awards 595 — 304 — Adjustment for potentially dilutive warrant liabilities — — — 1,225 Weighted-average shares of Class A Common Stock outstanding, Diluted 85,563 82,452 84,424 334,702 The following table summarizes the weighted-average potential shares of Class A Common Stock excluded from diluted earnings (loss) per share of Class A Common Stock as their effect would be anti-dilutive: Three months ended Six months ended 2023 2022 2023 2022 in thousands Hagerty Group Units 255,532 251,034 255,620 — Series A Convertible Preferred Stock — — — — Warrants 19,484 19,484 19,484 7,050 Unvested shares associated with RSUs, performance-based RSUs and the ESPP 5,931 6,872 6,328 3,455 Total 280,947 277,390 281,432 10,505 |
Warrant Liabilities
Warrant Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Warrant Liabilities | 17 — Warrant Liabilities The Company had 5,750,000 Public Warrants, 257,500 Private Placement Warrants, 28,750 Underwriter Warrants, 1,300,000 OTM Warrants, and 12,147,300 PIPE Warrants registered and outstanding as of June 30, 2023. Public Warrants — Each Public Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustments, provided that the Company has an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act") covering the number of shares issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities laws of the state of residence of the holder. The Public Warrants may be exercised on a cash basis only for a whole number of shares of Class A Common Stock. The Public Warrants expire in December 2026. Private Placement Warrants — Each Private Placement Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustments, and subject to additional vesting requirements as outlined within the warrant agreements covering those securities, provided that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities laws of the state of residence of the holder. The Private Placement Warrants may be exercised only for a whole number of shares of Class A Common Stock. Additionally, the Private Placement Warrants are exercisable on a cashless basis so long as they are held by the original warrant holder or permitted transferees. The Private Placement Warrants expire in December 2026. Underwriter Warrants — Each Underwriter Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustments, provided that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities laws of the state of residence of the holder. The Underwriter Warrants may be exercised only for a whole number of shares of Class A Common Stock. The Underwriter Warrants are exercisable on a cashless basis so long as they are held by the Underwriter or any of its permitted transferees. The Underwriter Warrants expire in December 2026. OTM Warrants — Each OTM Warrant is exercisable for one share of Class A Common Stock at a price of $15.00 per share, subject to adjustments and additional vesting requirements as outlined within the warrant agreements covering those securities, provided that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities laws of the state of residence of the holder. The OTM Warrants may be exercised only for a whole number of shares of Class A Common Stock. The OTM Warrants may be exercised on a cashless basis so long as they continue to be held by the initial purchasers or their permitted transferees. The OTM Warrants expire in December 2031. PIPE Warrants — Each PIPE Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustments, provided that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under securities laws of the state of residence of the holder. The PIPE Warrants may be exercised only for a whole number of shares of Class A Common Stock. The PIPE Warrants may be exercised on a cashless basis. The PIPE Warrants expire in December 2026. The Company accounts for these warrants as liabilities in accordance with ASC 815-40. The warrants are measured at fair value each reporting period with the change in fair value recorded within "Change in fair value of warrant liabilities" in the Condensed Consolidated Statements of Operations. The Company recognized a $1.8 million loss and a $5.4 million loss as a result of an increase in the fair value of the warrant liability for the three months ended June 30, 2023 and 2022, respectively. The Company recognized a $2.3 million loss and a $26.3 million gain as a result of an increase and decrease in the fair value of the warrant liability for the six months ended June 30, 2023 and 2022, respectively. During the six months ended June 30, 2022, 522,000 PIPE warrants were exercised, on a cashless basis, for an equivalent of 124,748 shares of Class A Common Stock. The cashless exercise resulted in a decrease in "Warrant liabilities" and an increase in "Class A Common Stock" and "Additional paid-in capital" of $1.9 million on the Condensed Consolidated Balance Sheets. No warrants were exercised during the six months ended June 30, 2023. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | 18 — Share-Based Compensation The Company's 2021 Equity Incentive Plan provides for the issuance of up to approximately 38.3 million shares of Class A Common Stock to employees and non-employee directors. The 2021 Equity Incentive Plan allows for the issuance of incentive stock o ptions, non-qualified stock options, restricted stock awards, stock appreciation rights, restricted stock units and performance restricted stock units. Awards granted under the 2021 Equity Incentive Plan generally vest over a two Share-based compensation expense related to employees is recognized in the Condensed Consolidated Statements of Operations within "Salaries and benefits" and, to a much lesser extent, when applicable, "Restructuring, impairment and related charges, net." Share-based compensation expense related to non-employee directors is recognized within "General and administrative services." The Company recognizes forfeitures of share-based compensation awards in the period in which they occur. The following table summarizes share-based compensation expense recognized during the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands Restricted stock units $ 3,393 $ 3,592 $ 6,626 $ 3,592 Performance restricted stock units 716 715 1,431 715 Employee stock purchase plan — — 165 — Total share-based compensation expense $ 4,109 $ 4,307 $ 8,222 $ 4,307 Restricted Stock Units The Company grants serviced-based restricted stock units ("RSUs") to employees and non-employee directors. The grant date fair value is determined based on the closing market price of the Class A Common Stock on the business day prior to the grant date. Compensation expense related to service-based RSUs is recognized ratably over the requisite service period. The following table provides a summary of the RSU activity during the six months ended June 30, 2023: Restricted Stock Units Weighted Average Grant Date Fair Value Unvested balance as of December 31, 2022 3,195,038 $ 10.76 Granted 1,009,853 8.74 Vested (824,790) 10.79 Forfeited (65,491) 10.79 Unvested balance as of June 30, 2023 3,314,610 $ 10.14 The Company granted 3,173,231 RSUs during the six months ended June 30, 2022 with a weighted-average grant date fair value of $10.79. The total grant date fair value of RSUs that vested during six months ended June 30, 2023 was $8.9 million. There were no RSUs that vested during the six months ended June 30, 2022. The tax impact related to vested shares for the six months ended June 30, 2023 was not material to the Company's Condensed Consolidated Financial Statements due to the full valuation allowance on the deferred tax asset for the investment in the assets of The Hagerty Group. Unrecognized compensation expense related to RSUs as of June 30, 2023 was $26.4 million, which the Company expects to recognize over a weighted average period of 3.23 years. Performance Restricted Stock Units In April 2022, the CEO was granted The following table summarizes the assumptions and related information used to determine the grant-date fair value of performance-based RSUs awarded in April 2022: Inputs Performance Restricted Stock Units Weighted average grant-date fair value per share $5.19 Expected stock volatility 35% Expected term (in years) 7.0 Risk-free interest rate 2.5% Dividend yield —% The following table provides a summary of performance-based RSU activity during the six months ended June 30, 2023: Performance Restricted Stock Units Weighted Average Fair Value Outstanding as of December 31, 2022 3,707,136 $ 5.19 Granted — — Outstanding as of June 30, 2023 3,707,136 $ 5.19 Employee Stock Purchase Plan The 2021 Employee Stock Purchase Plan (the "ESPP") allows substantially all of the Company's employees to purchase shares of the Class A Common Stock. The ESPP allows purchases of Class A Common Stock to be made at a discount of up to 15% and for the purchase price to occur at the lesser of the fair market value of the Class A Common Stock on (i) the offering date and (ii) the applicable purchase date. E mployees are allowed to terminate their participation in the ESPP at any time during the purchase period prior to the purchase of shares. As of June 30, 2023, approximately 118,009 shares had been purchased under the ESPP and there were approximately 11.4 million shares available for future purchases. |
Taxation
Taxation | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Taxation | 19 — Taxation United States — The Hagerty Group is taxed as a pass-through ownership structure under provisions of the Internal Revenue Code ("IRC") and a similar section of state income tax law except for Hagerty Re, Broad Arrow, and various foreign subsidiaries. Any taxable income or loss generated by The Hagerty Group is passed through to and included in the taxable income or loss of the Hagerty Group Unit Holders, including the Company. The Company is taxed as a corporation under the IRC and pays corporate, federal, state, and local taxes with respect to income allocated from The Hagerty Group. The Company has a Tax Receivable Agreement ("TRA") with the Legacy Unit Holders that requires the Company to pay 85% of the tax savings that are realized as a result of increases in the tax basis in The Hagerty Group’s assets as a result of an exchange of Hagerty Group Units and Class V Common Stock for Class A Common Stock or cash. See "Tax Receivable Agreement Liability" below for additional information. Canada — Canadian entities are taxed as non-resident corporations and subject to income tax in Canada under provisions of the Canadian Revenue Agency. United Kingdom — U.K. entities are taxed as corporations and subject to income tax in the U.K. under provisions of HM Revenue & Customs. Bermuda — Hagerty Re has received an undertaking from the Bermuda government exempting it from all local income, withholding, and capital gains taxes until March 31, 2035. At present time no such taxes are levied in Bermuda. Hagerty Re made an irrevocable election under Section 953(d) of the U.S. IRC, as amended, to be taxed as a U.S. domestic corporation. As a result of this "domestic election", Hagerty Re is subject to U.S. taxation on its worl d-wide income as if it were a U.S. corporation. In accordance with an agreement between Hagerty Re and the Internal Revenue Service ("IRS"), Hagerty Re established an irrevocable letter of credit with the IRS in 2021. Income tax expense (benefit) reflected in the Condensed Consolidated Financial Statements differs from the tax computed by applying the statutory U.S. federal rate of 21% to "Income (loss) before income tax expense" as follows: Six months ended June 30, 2023 2022 in thousands (except percentages) Income tax (benefit) expense at statutory rate $ 1,661 21 % $ 3,073 21 % State taxes 103 1 % (142) (1) % Loss not subject to entity-level taxes 4,311 55 % 4,692 32 % Foreign rate differential (185) (2) % (175) (1) % Change in valuation allowance 252 3 % 2,002 14 % Change in fair value of warrant liability 477 6 % (5,520) (38) % Permanent items 510 7 % 238 2 % Other, net 269 3 % — — % Income tax expense $ 7,398 94 % $ 4,168 29 % The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction, as well as many state and foreign jurisdictions. As of June 30, 2023, tax years 2019 to 2022 are subject to examination by various tax authorities. With few exceptions, as of June 30, 2023, the Company is no longer subject to U.S. federal, state, local or foreign examinations for years before 2019. The Hagerty Group is currently under audit by the IRS for the 2021 tax year. The Canadian statute of limitation for tax year 2018 was open as of June 30, 2023 and remains open because the Company is currently under examination by the Canadian Revenue Agency for that year. The calculation of the Company's tax liabilities involves uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across its global operations. ASC Topic 740, Income Taxes ("ASC 740") states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company records uncertain tax benefits ("UTB") as liabilities in accordance with ASC 740 and adjusts these liabilities when management's conclusion changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the UTB liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of June 30, 2023 and December 31, 2022, the Company did not have any unrecognized tax benefits and had no material accrued interest or penalties related to uncertain tax positions. If recorded, interest and penalties would be recorded within "Income tax benefit (expense)" in the Condensed Consolidated Statements of Operations. In August 2022, the Inflation Reduction Act ("IRA") was enacted into law. Among the provisions in the IRA was a 15% corporate minimum tax effective for years beginning after December 31, 2022, and a 1% tax on share repurchases after December 31, 2022. The Company does not expect the tax provisions of the IRA to have a material impact on its results. Tax Receivable Agreement Liability — The TRA provides for payment to the Legacy Unit Holders of 85% of the U.S. federal, state and local income tax savings realized by Hagerty, Inc. as a result of the increases in tax basis and certain other tax benefits as outlined in the Business Combination Agreement (provided as Exhibit 2.1, incorporated by reference within Item 6. Exhibits , in this Quarterly Report on Form 10-Q) upon the exchange of Hagerty Group Units and Class V Common Stock of the Company for Class A Common Stock of the Company or cash. The Hagerty Group will have in effect an election under Section 754 of the IRC effective for each taxable year in which an exchange of Hagerty Group Units occurs. The remaining 15% cash tax savings resulting from the basis adjustments will be retained by Hagerty, Inc. Significant inputs and assumptions are used to estimate the future expected payments under the TRA, including the timing of the realization of the tax benefits and a tax savings rate of approximately 25.6%. The estimated value of the TRA recorded by the Company within "Other long-term liabilities" on the Condensed Consolidated Balance Sheets was $0.6 million and $3.2 million at June 30, 2023 and December 31, 2022, respectively, which was limited by the ability to currently utilize tax benefits. The decrease in value of $2.6 million was recorded in "Interest and other income (expense)" within the Condensed Consolidated Statements of Operations. |
Related-Party Transactions
Related-Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 20 — Related-Party Transactions As of June 30, 2023, Markel and State Farm had the following equity interests in Hagerty and as a result, are considered related parties: Markel State Farm Equity Interest Shares/Units Percentage of total outstanding (1) Shares/Units Percentage of total outstanding (1) Hagerty, Inc. Class A Common Stock 3,000,000 3.6 % 50,000,000 59.2 % Hagerty, Inc. Class V Common Stock 75,000,000 29.9 % — — % Hagerty, Inc. Series A Convertible Preferred Stock 1,590,668 18.8 % 5,302,226 62.5 % Hagerty Group Units 75,000,000 22.1 % — — % Controlling Interest 3,000,000 3.6 % 50,000,000 59.2 % Non-controlling Interest 75,000,000 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. Further, these percentages do not reflect any ownership of warrants. Refer to Note 15 — Stockholders' Equity for a description of each equity interest in the table above. State Farm Alliance Agreement State Farm and Hagerty entered into a master alliance agreement in 2020 to establish an alliance insurance program whereby State Farm’s customers, through State Farm agents, will have access to Hagerty features and services. This program is expected to begin in the second half of 2023. Under this agreement, State Farm paid Hagerty an advanced commission of $20.0 million in 2020, which will be recognized into "Commission and fee revenue" over the life of the arrangement beginning in the period when policies may be issued under the agreement. As part of the Company's master alliance agreement with State Farm, it also entered into a managing general underwriter agreement whereby the State Farm Classic+ policy will be offered through State Farm Classic Insurance Company, a new wholly-owned subsidiary of State Farm, subject to any applicable state regulatory review and approval. The State Farm Classic+ policy will be available to new and existing customers through State Farm agents on a state by state basis. Hagerty Insurance Agency, LLC will be paid a commission under the managing general underwriter agreement and ancillary agreements for servicing the State Farm Classic+ policies. Additionally, the Company will have the opportunity to offer HDC membership to State Farm Classic+ customers which provides Hagerty an additional revenue opportunity. Reinsurance Agreement Effective March 1, 2023, Hagerty Re entered into a quota share reinsurance agreement to cede 50% of the High-Net-Worth Accounts risks assumed from Evanston to Oglesby Reinsurance Company, an affiliate of State Farm. Refer to Note 9 — Reinsurance for additional information on the Company's reinsurance programs. The following tables summarize all balances related to the Company's ceded reinsurance business with State Farm affiliates: June 30, 2023 December 31, 2022 Assets: in thousands Commissions receivable $ 2,909 $ — Other current assets 4,483 — Total assets $ 7,392 $ — Liabilities: Accounts payable, accrued expenses and other current liabilities $ 7,782 $ — Total liabilities $ 7,782 $ — Three months ended Six months ended 2023 2022 2023 2022 Revenue: in thousands Earned premium $ (1,390) $ — $ (1,390) $ — Expenses: Ceding commission $ (723) $ — $ (723) $ — Losses and loss adjustment expenses (278) — (278) — Total expenses $ (1,001) $ — $ (1,001) $ — Markel Alliance Agreement The Company's affiliated U.S. and U.K. MGA subsidiaries have personal and commercial lines of business written with Markel-affiliated carriers. The following tables provide information about Markel-affiliated due to insurer liabilities and commission revenue under the agreement with Markel subsidiaries: June 30, 2023 December 31, 2022 in thousands (except percentages) Due to insurer $ 116,411 $ 64,873 Percent of total 91 % 95 % Three months ended Six months ended 2023 2022 2023 2022 in thousands (except percentages) Commission revenue $ 100,737 $ 86,716 $ 172,376 $ 146,252 Percent of total 93 % 93 % 95 % 94 % Reinsurance Agreement For the six months ended June 30, 2023 and 2022, under a quota share agreement with Evanston, a wholly-owned subsidiary of Markel, Hagerty Re reinsured approximately 80% and 70%, respectively, of the risks written through the Company’s U.S. MGAs. Effective January 1, 2023, the quota share agreement with Evanston was amended to increase Hagerty Re's participation on High-Net-Worth Accounts from 80% to 100%. At the same time, Hagerty Re entered into a reinsurance agreement to cede 10% of the High-Net-Worth Accounts physical damage risks assumed from Evanston to Markel International, an affiliate of Markel. Additionally, under a quota share agreement with Markel International Insurance Company Limited, Hagerty Re reinsured approximately 80% and 70% of the risks for the six months ended June 30, 2023 and 2022, respectively, written through the Company’s U.K. MGA. The following tables summarize all balances related to the Company's reinsurance business with Markel affiliates: June 30, 2023 December 31, 2022 Assets: in thousands Premiums receivable $ 185,458 $ 97,897 Commissions receivable 584 — Deferred acquisition costs, net 135,769 103,869 Other current assets 1,217 — Total assets $ 323,028 $ 201,766 Liabilities: Accounts payable, accrued expenses and other current liabilities $ 1,956 $ — Losses payable and provision for unpaid losses and loss adjustment expenses 163,833 160,236 Commissions payable 98,331 75,898 Unearned premiums 293,507 227,192 Total liabilities $ 557,627 $ 463,326 Three months ended Six months ended 2023 2022 2023 2022 Revenue: in thousands Earned premium $ 130,610 $ 89,738 $ 243,972 $ 175,428 Expenses: Ceding commission, net $ 59,419 $ 43,415 $ 113,177 $ 84,303 Losses and loss adjustment expenses 51,194 36,808 97,849 71,379 Total expenses $ 110,613 $ 80,223 $ 211,026 $ 155,682 Broad Arrow In January 2022, the Company entered into a joint venture with Broad Arrow and acquired approximately 40% equity ownership interest in Broad Arrow. In August 2022, the Company acquired the remaining 60% of Broad Arrow in exchange for $73.3 million of Class A Common Stock and Hagerty Group Units exchangeable for Class A Common Stock. Prior to the Company's joint venture with Broad Arrow in January 2022, Broad Arrow was majority owned by Kenneth Ahn, the President of Marketplace, who received Hagerty Group Units as a part of this transaction. Refer to Note 6 — Acquisitions and Investments for additional information. Speed Digital In April 2022, Hagerty acquired Speed Digital for a purchase price of $15.0 million. Speed Digital was previously wholly-owned indirectly by Robert Kauffman, a director on Hagerty's Board, who will receive 100% of the proceeds of the purchase price. Refer to Note 6 — Acquisitions and Investments for additional information. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 21 — Commitments and Contingencies Employee Compensation Agreements — In the ordinary course of conducting its business, the Company enters into certain employee compensation agreements from time to time which commit the Company to severance obligations in the event an employee terminates employment with the Company. If applicable, these obligations are included in the accrued expenses lines of the Condensed Consolidated Balance Sheets. Litigation — From time to time, Hagerty is involved in various claims and legal actions that arise in the ordinary course of business. Management is required to assess the likelihood of any adverse judgments or outcomes related to these legal contingencies, as well as potential ranges of probable or reasonably possible losses. The determination of the amount of any losses to be recorded or disclosed as a result of these contingencies is based on a careful analysis of each individual exposure with, in some cases, the assistance of outside legal counsel. The amount of losses recorded or disclosed for such contingencies may change in the future due to new developments in each matter or a change in legal or settlement strategy. While the impact of any one or more legal claims or proceedings could be material to the Company's operating results in any period, management does not believe that the outcome of any of these pending claims or proceedings (including the matter discussed below), individually or in the aggregate, will have a material adverse effect on the Company's consolidated financial condition. Data Security Incident — In 2021, the Company experienced an unauthorized access into its online insurance quote feature. The issue has been remediated. This incident is the subject of coordinated industry-wide regulatory investigations in New York state. The Company could be subject to litigation, fines and/or penalties related to this incident. In the second quarter of 2023, the Company accrued an estimated liability related to this incident based on the facts known by management and developed through its assessment of the current status of ongoing dialog with the regulatory investigators. The amount of the estimated liability is not material to the Company's Condensed Consolidated Financial Statements. The amount of the ultimate fine and/or penalties related to this incident could differ from the amount currently accrued and such difference is not currently estimable. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 22 — Subsequent Events Management has evaluated subsequent events through August 8, 2023, which is the date these Condensed Consolidated Financial Statements were issued and no material subsequent events were identified that are required to be reported. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 2,405 | $ (5,536) | $ 306 | $ 21,971 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 shares | Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Laurie Harris [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On March 22, 2023, Laurie Harris, a director, adopted a programmed plan of transactions intended to satisfy the affirmative defense provided by Rule 10b5-1 (the "10b5-1 Plan"). The 10b5-1 Plan was adopted in order to sell-to-cover a number of shares of our Class A Common Stock to satisfy tax withholding obligations in connection with the vesting of Ms. Harris' restricted stock units on April 1, 2023. The 10b5-1 Plan provided for a first possible trade date of June 21, 2023, and terminated automatically on June 30, 2023. The aggregate number of shares to be sold pursuant to the 10b5-1 Plan was 50% of the vested value of 8,341 shares of Class A Common Stock. | |
Name | Laurie Harris | |
Title | irector | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | March 22, 2023 | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | June 30, 2023 | |
Arrangement Duration | 9 days | |
Aggregate Available | 8,341 | 8,341 |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation — The Company's Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the regulations of the Securities and Exchange Commission and include the accounts of Hagerty, Inc., which is comprised of The Hagerty Group with its consolidated subsidiaries. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as permitted by such rules and regulations. The Company's Condensed Consolidated Financial Statements reflect all normal recurring adjustments and accruals that are, in the opinion of management, necessary for a fair statement of its financial position and results of operations for the interim periods presented. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. |
Principles of Consolidation | Principles of Consolidation — The Company's Condensed Consolidated Financial Statements contain the accounts of Hagerty, Inc. and its majority-owned or controlled subsidiaries. The Company is the sole managing member of The Hagerty Group and, as a result, consolidates the financial statements of The Hagerty Group. The Company had economic ownership of 24.8% and 24.5% of The Hagerty Group as of June 30, 2023 and December 31, 2022, respectively. In addition, Member Hubs Holding, LLC ("MHH"), which operates as Hagerty Garage + Social, is an approximately 80% owned subsidiary of The Hagerty Group. The Company consolidates these entities using the voting interest method in accordance with Accounting Standards Codification ("ASC") Topic 810, Consolidations ("ASC 810"). Non-controlling interest is presented separately on the Condensed Consolidated Statements of Operations, the Condensed Consolidated Statements of Comprehensive Income (Loss), the Condensed Consolidated Balance Sheets, and the Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity. From January 2022 to August 2022, the Company owned approximately 40% of Broad Arrow, which was accounted for as an equity method investment. Subsequent to the acquisition of the remaining 60% of Broad Arrow in August 2022, Broad Arrow became a wholly-owned subsidiary of the Company and, as a result, the financial statements of Broad Arrow are now consolidated as a part of Hagerty. Refer to Note 6 — Acquisitions and Investments for additional information. |
Business Combination | Business Combination — On December 2, 2021, (the "Closing"), The Hagerty Group completed a business combination with Aldel Financial Inc. ("Aldel"), and Aldel Merger Sub LLC ("Merger Sub"), a Delaware limited liability company and wholly-owned subsidiary of Aldel (the "Business Combination"). In connection with the Closing, Aldel changed its name from Aldel Financial Inc. to Hagerty, Inc. Following the Closing, the Company is organized as a C corporation and owns an equity interest in The Hagerty Group in what is commonly known as an "Up-C" structure in which substantially all of the assets and liabilities of the Company are held by The Hagerty Group. |
Use of Estimates | Use of Estimates — The preparation of the Company's Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements, as well as the reported amounts of revenue and expenses during the reporting period. Although the estimates are considered reasonable, actual results could materially differ from those estimates. |
Segment Information | Segment Information — The Company has one operating segment and one reportable segment. The Company’s Chief Operating Decision Maker ("CODM") is the Chief Executive Officer ("CEO"), who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. The Company’s management approach is to utilize an internally developed strategic decision making framework with its Members and customers at the center of all decisions, which requires the CODM to have a consolidated view of the operations so that decisions can be made in the best interest of Hagerty and its Members. |
Foreign Currency Translation | Foreign Currency Translation — The Company translates its foreign currency denominated assets and liabilities into U.S. dollars at current rates of exchange as of the balance sheet date, and foreign currency denominated income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in "Foreign currency translation adjustments", a component of Accumulated other comprehensive income (loss). Foreign currency transaction gains and losses are recognized within "Interest and other income (expense)" in the Condensed Consolidated Statements of Operations. |
Recently Adopted Accounting Guidance and Accounting Guidance Not Yet Adopted | Recently Adopted Accounting Standards Leases — In February 2016, the Financial Accounting Standards Board (the "FASB") issued ASC 842, which supersedes the lease requirements in ASC Topic 840, Leases . ASC 842 requires the recognition of an asset and liability for the rights and obligations created by a leased asset, whether classified as an operating lease or a finance lease. The Company adopted ASC 842 effective January 1, 2022 using the modified retrospective approach and elected not to recast comparative prior year periods. Upon adoption, the Company measured and recorded its operating lease liabilities at the present value of the remaining rental payments. Corresponding right-of-use ("ROU") assets were recorded based on the amount of the lease liabilities, adjusted by any unamortized lease incentives, deferred rent accruals and initial direct costs. The adoption of ASC 842 resulted in the recognition of initial ROU assets and lease liabilities of $72.8 million as of January 1, 2022. ASC 842 also requires sellers in a sale-leaseback transaction to recognize the entire gain from the sale of an underlying asset at the time of sale rather than over the leaseback term. The carrying value of the deferred gain on the single sale-leaseback transaction executed by the Company prior to January 1, 2022 was approximately $4.3 million and was recorded as an increase to "Accumulated Earnings (Deficit)" and "Non-controlling Interest" within the Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity at adoption. The adoption of ASC 842 did not have a material impact on the Condensed Consolidated Statements of Operations or Condensed Consolidated Statements of Cash Flows. The Company also elected the package of practical expedients provided by ASC 842, which allowed it to: (i) not reassess whether expired or existing contracts contained leases, (ii) not reassess previous lease classification, and (iii) not revalue initial direct costs for existing leases. The Company also elected the lessee practical expedient to combine lease and non-lease components in the accounting for leases of all asset classes. In addition, the Company did not elect the hindsight practical expedient. The expense of operating leases under ASC 842 is generally recognized on a straight-line basis which is calculated as the total lease cost divided by the lease term and is recognized in the Condensed Consolidated Statements of Operations. Credit Losses — In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments , which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The standard requires financial assets measured on the amortized cost basis to be presented at the net amount expected to be collected. The following financial assets held by the Company are within the scope of ASU No. 2016-13: (i) Accounts receivable, (ii) Premiums receivable, (iii) Commissions receivable, (iv) Notes receivable and (v) certain fixed income securities. The amount of any required allowance for expected credit losses is determined utilizing historical loss rates, which are then adjusted, if necessary, for specific financial assets that are judged to have a higher-than-normal risk profile. Additional credit loss allowances may also be recorded after taking into account macro-economic and industry risk factors. For Notes receivable, to the extent necessary, the amount of any required allowance for credit losses takes into account the estimated realizable value of the collateral securing the loan. The Company adopted ASU No. 2016-13 on January 1, 2023 without a material effect on the Company's Condensed Consolidated Financial Statements and with no required cumulative-effect adjustment to "Accumulated earnings (deficit)" within the Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as of June 30, 2023 and 2022: June 30, 2023 June 30, 2022 in thousands Cash and cash equivalents $ 114,252 $ 180,165 Restricted cash and cash equivalents 518,109 381,284 Total cash and cash equivalents and restricted cash and cash equivalents $ 632,361 $ 561,449 |
Schedule of Restricted Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as of June 30, 2023 and 2022: June 30, 2023 June 30, 2022 in thousands Cash and cash equivalents $ 114,252 $ 180,165 Restricted cash and cash equivalents 518,109 381,284 Total cash and cash equivalents and restricted cash and cash equivalents $ 632,361 $ 561,449 |
Schedule of Supplemental Cash Flow Information | The table below presents information regarding the Company's non-cash investing activities, as well as the cash paid for interest and taxes for the six months ended June 30, 2023 and 2022: Six months ended 2023 2022 NON-CASH INVESTING ACTIVITIES: in thousands Capital expenditures $ 212 $ 4,389 Acquisitions $ 1,742 $ 7,500 CASH PAID FOR: Interest $ 3,312 $ 2,037 Income taxes $ 6,500 $ 5,250 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents Hagerty's revenue by distribution channel offering, as well as a reconciliation to total revenue for the three and six months ended June 30, 2023 and 2022: Agent Direct Total in thousands Three months ended June 30, 2023 Commission and fee revenue $ 46,972 $ 40,702 $ 87,674 Contingent commission revenue 12,242 10,271 22,513 Membership revenue — 13,146 13,146 Marketplace and other revenue — 10,429 10,429 Total revenue from customer contracts 59,214 74,548 133,762 Earned premium recognized under ASC 944 127,482 Total revenue $ 261,244 Three months ended June 30, 2022 Commission and fee revenue $ 40,193 $ 35,479 $ 75,672 Contingent commission revenue 10,857 8,977 19,834 Membership revenue — 11,131 11,131 Marketplace and other revenue — 5,280 5,280 Total revenue from customer contracts 51,050 60,867 111,917 Earned premium recognized under ASC 944 94,100 Total revenue $ 206,017 Agent Direct Total in thousands Six months ended June 30, 2023 Commission and fee revenue $ 78,659 $ 66,841 $ 145,500 Contingent commission revenue 21,681 17,618 39,299 Membership revenue — 25,693 25,693 Marketplace and other revenue — 24,391 24,391 Total revenue from customer contracts 100,340 134,543 234,883 Earned premium recognized under ASC 944 244,713 Total revenue $ 479,596 Six months ended June 30, 2022 Commission and fee revenue $ 66,392 $ 58,152 $ 124,544 Contingent commission revenue 18,232 15,191 33,423 Membership revenue — 21,449 21,449 Marketplace and other revenue — 11,180 11,180 Total revenue from customer contracts 84,624 105,972 190,596 Earned premium recognized under ASC 944 183,232 Total revenue $ 373,828 The following table presents Hagerty's revenue disaggregated by geographic area, as well as a reconciliation to total revenue for the three and six months ended June 30, 2023 and 2022: U.S. Canada Europe Total in thousands Three months ended June 30, 2023 Commission and fee revenue $ 77,611 $ 8,587 $ 1,476 $ 87,674 Contingent commission revenue 22,478 — 35 22,513 Membership revenue 12,254 892 — 13,146 Marketplace and other revenue 9,061 348 1,020 10,429 Total revenue from customer contracts 121,404 9,827 2,531 133,762 Earned premium recognized under ASC 944 127,482 Total revenue $ 261,244 Three months ended June 30, 2022 Commission and fee revenue $ 66,400 $ 7,956 $ 1,316 $ 75,672 Contingent commission revenue 19,798 — 36 19,834 Membership revenue 10,288 843 — 11,131 Marketplace and other revenue 4,754 152 374 5,280 Total revenue from customer contracts 101,240 8,951 1,726 111,917 Earned premium recognized under ASC 944 94,100 Total revenue $ 206,017 U.S. Canada Europe Total in thousands Six months ended June 30, 2023 Commission and fee revenue $ 132,208 $ 10,957 $ 2,335 $ 145,500 Contingent commission revenue 39,230 — 69 39,299 Membership revenue 23,923 1,770 — 25,693 Marketplace and other revenue 22,587 512 1,292 24,391 Total revenue from customer contracts 217,948 13,239 3,696 234,883 Earned premium recognized under ASC 944 244,713 Total revenue $ 479,596 Six months ended June 30, 2022 Commission and fee revenue $ 112,070 $ 10,274 $ 2,200 $ 124,544 Contingent commission revenue 33,266 — 157 33,423 Membership revenue 19,779 1,670 — 21,449 Marketplace and other revenue 10,066 470 644 11,180 Total revenue from customer contracts 175,181 12,414 3,001 190,596 Earned premium recognized under ASC 944 183,232 Total revenue $ 373,828 |
Schedule of Premiums Assumed and the Change in Unearned Premiums | The following table presents Hagerty Re's total premiums assumed and ceded on a written and earned basis for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands Premiums: Assumed $ 188,456 $ 139,627 $ 320,643 $ 237,255 Ceded (8,541) — (22,269) (9,690) Net $ 179,915 $ 139,627 $ 298,374 $ 227,565 Premiums earned: Assumed $ 132,123 $ 96,504 $ 252,520 $ 187,860 Ceded (4,641) (2,404) (7,807) (4,628) Net $ 127,482 $ 94,100 $ 244,713 $ 183,232 |
Schedule of Contract with Customer, Contract Asset, Contract Liability, and Receivable | The following table is a summary of the Company's contract assets and liabilities as of June 30, 2023 and December 31, 2022. Contract assets are included within "Commissions receivable" and liabilities are classified as "Contract liabilities" within current and non-current liabilities on the Condensed Consolidated Balance Sheets. June 30, 2023 December 31, 2022 in thousands Contract assets $ 38,240 $ 60,151 Contract liabilities $ 47,997 $ 44,426 |
Notes Receivable (Tables)
Notes Receivable (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Financing Receivable Credit Quality Indicators | The table below provides the aggregate LTV ratio for Broad Arrow's loan portfolio as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 in thousands Secured loans $ 42,876 $ 37,427 Estimate of collateral value $ 100,053 $ 75,802 Aggregate LTV ratio 42.9 % 49.4 % |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Assets, Current and Long-term | As of June 30, 2023 and December 31, 2022, other assets, current and long-term, consist of: June 30, 2023 December 31, 2022 in thousands Prepaid sales, general and administrative expenses $ 21,810 $ 24,234 Prepaid software as a service ("SaaS") implementation costs 19,046 18,501 Fixed income investments 16,489 12,986 Contract costs 7,482 6,576 Consignor advances (1) 6,100 — Inventory (2) 4,973 2,074 Digital media content (3) 2,652 5,580 Deferred reinsurance premiums ceded 14,552 91 Other (4) 11,787 12,691 Other assets $ 104,891 $ 82,733 (1) Broad Arrow makes consignor advances secured by collector cars that are contractually committed, in the near term, to be offered for sale at a Broad Arrow auction. Consignor advances allow the seller to receive funds upon consignment for an auction sale that will occur up to six months in the future and have short-term contractual maturities. (2) As of June 30, 2023, "Inventory" primarily includes vehicles owned by Broad Arrow that have been purchased for resale purposes. (3) The reduction in digital media content when compared to December 31, 2022 was primarily attributable to $3.8 million of impairments recorded in the first half of 2023 as a result of lower than anticipated advertising and sponsorship revenue associated with these assets. (4) As of June 30, 2023, other assets primarily includes $4.0 million of other investments, the $3.1 million fair value of an interest rate swap, $2.7 million of collector vehicle investments, and $1.4 million of deferred financing costs related to the Company's credit facility. As of December 31, 2022, other assets primarily included $4.0 million of other investments, the $3.3 million fair value of an interest rate swap, $2.5 million of collector vehicle investments, $1.4 million of deferred financing costs related to the Company's credit facility, and $1.4 million related to an outstanding reinsurance recoverable. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of Components of Operating Lease Expense | The following table summarizes the components of the Company's operating lease expense for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands Operating lease expense (1) $ 3,153 $ 2,233 $ 6,300 $ 4,283 Short-term lease expense (1) 147 66 216 77 Variable lease expense (1) (3) 842 669 1,649 1,245 Sublease revenue (2) (134) (33) (197) (45) Lease cost, net $ 4,008 $ 2,935 $ 7,968 $ 5,560 (1) Classified within "General and administrative services" on the Condensed Consolidated Statements of Operations. (2) Classified within "Membership, marketplace and other revenue" on the Condensed Consolidated Statements of Operations. (3) Amounts include payments for maintenance, taxes, insurance and payments affected by the Consumer Price Index. The following tables summarize supplemental balance sheet information related to operating leases as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 in thousands Operating lease ROU assets (1) $ 77,640 $ 82,398 Current lease liabilities (2) 7,988 7,556 Long-term lease liabilities 77,084 80,772 Total operating lease liabilities $ 85,072 $ 88,328 June 30, 2023 December 31, 2022 in thousands ROU assets obtained in exchange for new operating lease liabilities (3) $ 359 $ 82,398 Gains on sales and leaseback transactions, net $ — $ 4,314 Weighted-average lease term 9.82 10.23 Weighted-average discount rate 5.5 % 5.5 % (1) Refer to Note 10 — Restructuring, Impairment and Related Charges for information regarding operating lease ROU asset impairments. (2) Current lease liabilities are recorded within "Accounts payable, accrued expenses and other current liabilities" within the Condensed Consolidated Balance Sheets. (3) Represents the amount of ROU assets obtained during the six months ended June 30, 2023 and year ended December 31, 2022, which includes the transition adjustment of $72.8 million for operating lease ROU assets recorded as of January 1, 2022, upon the adoption of ASC 842. |
Schedule of Maturities of Lease Liabilities | The following table summarizes information about the amount and timing of the Company's future operating lease commitments as of June 30, 2023: in thousands 2023 $ 6,177 2024 12,299 2025 11,876 2026 11,244 2027 11,052 Thereafter 58,646 Total lease payments 111,294 Less: imputed interest (26,222) Total lease liabilities $ 85,072 |
Acquisitions and Investments (T
Acquisitions and Investments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of Broad Arrow as of the date of the acquisition (in thousands): Total equity consideration $ 73,253 Fair value of previously held equity interest in Broad Arrow (1) 48,309 Total consideration and value to be allocated to net assets $ 121,562 (1) The Broad Arrow Acquisition was accounted for as a step acquisition. Accordingly, the Company remeasured its pre-existing 40% equity interest in Broad Arrow immediately prior to the completion of the acquisition to its estimated fair value of approximately $48.3 million. This fair value was derived from the Hagerty, Inc. stock price of $13.47 as of the closing date and thus represents a Level 1 fair value measurement. As a result of the remeasurement, the Company recorded a net gain of approximately $34.7 million in the third quarter of 2022, representing the excess of the $48.3 million estimated fair value of its pre-existing 40% equity interest over its closing date carrying value of approximately $13.6 million. |
Schedule of Asset Acquisition | The following table summarizes the allocation of the purchase consideration to the fair values of the identifiable assets acquired and liabilities assumed as of the date of the Broad Arrow Acquisition (in thousands): Notes receivable (1) $ 21,594 Intangible assets, net (2) 3,100 Other assets (3) 11,756 Other liabilities (4) (13,449) Total identifiable net assets acquired 23,001 Goodwill 98,561 Total purchase consideration allocated to net assets acquired $ 121,562 (1) Broad Arrow makes term loans secured by collector cars. The fair value of the acquired loans approximates their carrying value due to the relatively short-term maturities and market rates of interest associated with most loans. Refer to Note 3 — Notes Receivable for additional information with respect to the Broad Arrow loan portfolio. (2) The fair value of the identifiable intangible assets acquired is a Level 3 fair value measurement, estimated using significant assumptions that are not observable in the market through the use of a discounted cash flow model. Inputs utilized in this model include the discount rate and terminal growth rate, as well as the return on assets. Identifiable intangible assets acquired consisted of trade names of $3.1 million with a 5-year estimated useful life. (3) Other assets includes $2.8 million of cash acquired, $2.6 million of Accounts receivable and $6.2 million of Other current assets. (4) Other liabilities includes a $7.0 million Note payable, $5.3 million of Contract liabilities and $0.7 million of Accounts payable. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following is a reconciliation of the changes in the Company's goodwill for the six months ended June 30, 2023 and 2022: 2023 2022 in thousands Goodwill as of January 1, $ 115,041 $ 11,488 Goodwill resulting from acquisition — 5,044 Effect of foreign currency translation 19 (7) Goodwill as of June 30, $ 115,060 $ 16,525 Refer to Note 6 — Acquisitions and Investments for information related to the Company's acquisitions of Speed Digital, in April 2022, and Broad Arrow, in August 2022, which together resulted in the recognition of $103.6 million of goodwill. |
Schedule of Finite-Lived Intangible Assets | The cost and accumulated amortization of intangible assets as of June 30, 2023 and December 31, 2022 are as follows: Weighted Average Useful Life June 30, 2023 December 31, 2022 in thousands Renewal rights 10.0 $ 20,221 $ 17,282 Internally developed software 3.1 119,885 109,764 Trade names and trademarks 14.0 12,541 12,541 Relationships and customer lists 15.4 13,898 13,890 Other 4.4 1,445 1,434 Intangible assets 167,990 154,911 Less: accumulated amortization (64,164) (50,887) Intangible assets, net $ 103,826 $ 104,024 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future aggregate amortization expense as of June 30, 2023 is as follows (in thousands): 2023 $ 16,808 2024 26,110 2025 18,760 2026 11,176 2027 8,376 Thereafter 22,596 Total $ 103,826 |
Provision for Unpaid Losses a_2
Provision for Unpaid Losses and Loss Adjustment Expenses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The following table presents a reconciliation of the beginning and ending provision for unpaid losses and loss adjustment expenses related to Hagerty Re, net of amounts recoverable from reinsurers: Six months ended 2023 2022 in thousands Gross reserves for unpaid losses and loss adjustment expenses, beginning of year $ 111,741 $ 74,869 Less: Reinsurance recoverable on unpaid losses and loss adjustment expenses 843 — Net reserves for unpaid losses and loss adjustment expenses, beginning of year 110,898 74,869 Incurred losses and loss adjustment expenses: Current accident year 101,976 75,539 Prior accident year — — Total incurred losses and loss adjustment expenses 101,976 75,539 Payments: Current accident year 8,639 6,698 Prior accident year 32,744 19,706 Total payments 41,383 26,404 Effect of foreign currency rate changes 104 (83) Net reserves for unpaid losses and loss adjustment expenses, end of period 171,595 123,921 Reinsurance recoverable on unpaid losses and loss adjustment expenses 538 — Gross reserves for unpaid losses and loss adjustment expenses, end of period $ 172,133 $ 123,921 |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule of Premiums Assumed and the Change in Unearned Premiums | The following table presents Hagerty Re's total premiums assumed and ceded on a written and earned basis for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands Premiums: Assumed $ 188,456 $ 139,627 $ 320,643 $ 237,255 Ceded (8,541) — (22,269) (9,690) Net $ 179,915 $ 139,627 $ 298,374 $ 227,565 Premiums earned: Assumed $ 132,123 $ 96,504 $ 252,520 $ 187,860 Ceded (4,641) (2,404) (7,807) (4,628) Net $ 127,482 $ 94,100 $ 244,713 $ 183,232 |
Schedule of Reinsurance Recoverable, Past Due | The following table presents reinsurance recoverable on paid and unpaid losses and loss adjustment expenses as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, in thousands Reinsurance recoverable on paid losses and loss adjustment expenses $ 106 $ 605 Reinsurance recoverable on unpaid losses and loss adjustment expenses 538 843 Total reinsurance recoverable $ 644 $ 1,448 December 31, |
Restructuring, Impairment and_2
Restructuring, Impairment and Related Charges (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following is a reconciliation of the liability related to the 2022 Restructuring Actions and the 2023 Restructuring Actions, which is recorded within "Accounts payable, accrued expenses and other current liabilities" on the Condensed Consolidated Balance Sheets. The remaining liability as of June 30, 2023 is expected to be settled in the third quarter of 2023. in thousands Balance at December 31, 2022 $ 9,470 Costs incurred and charged to expense 8,384 Costs paid or otherwise settled (1) (16,995) Balance at June 30, 2023 $ 859 (1) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The following table summarizes the significant inputs used in the valuation model for the private warrants as of June 30, 2023: Inputs Private Placement Warrants Underwriter Warrants OTM Warrants PIPE Warrants Exercise price $11.50 $11.50 $15.00 $11.50 Common stock price $9.36 $9.36 $9.36 $9.36 Volatility 42.5% 42.5% 41.0% 42.5% Expected term of the warrants 3.43 3.43 8.43 3.43 Risk-free rate 4.40% 4.40% 3.90% 4.40% Dividend yield —% —% —% —% |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The fair value of the Company's financial assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022, are shown in the tables below: Fair Value Measurements Total Level 1 Level 2 Level 3 in thousands June 30, 2023 Financial Assets Interest rate swaps $ 3,146 $ — $ 3,146 $ — Total $ 3,146 $ — $ 3,146 $ — Financial Liabilities Public warrants $ 13,512 $ 13,512 $ — $ — Private placement warrants 689 — — 689 Underwriter warrants 77 — — 77 OTM warrants 4,937 — — 4,937 PIPE warrants 28,615 — — 28,615 Total $ 47,830 $ 13,512 $ — $ 34,318 December 31, 2022 Financial Assets Interest rate swaps $ 3,294 $ — $ 3,294 $ — Total $ 3,294 $ — $ 3,294 $ — Financial Liabilities Public warrants $ 12,880 $ 12,880 $ — $ — Private placement warrants 673 — — 673 Underwriter warrants 75 — — 75 OTM warrants 4,706 — — 4,706 PIPE warrants 27,227 — — 27,227 Total $ 45,561 $ 12,880 $ — $ 32,681 |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents a reconciliation of the Company's warrant liabilities that are classified as Level 3 within the fair value hierarchy for the six months ended June 30, 2023 and 2022: Private Placement Warrants Underwriter Warrants OTM Warrants PIPE Warrants Total in thousands Balance at December 31, 2021 $ 1,248 $ 139 $ 6,849 $ 55,887 $ 64,123 Change in fair value of warrant liabilities (402) (44) (1,301) (16,834) (18,581) Exercise of warrants — — — (1,906) (1,906) Balance at June 30, 2022 $ 846 $ 95 $ 5,548 $ 37,147 $ 43,636 Balance at December 31, 2022 $ 673 $ 75 $ 4,706 $ 27,227 $ 32,681 Change in fair value of warrant liabilities 16 2 231 1,388 1,637 Balance at June 30, 2023 $ 689 $ 77 $ 4,937 $ 28,615 $ 34,318 |
Schedule of Debt Securities, Held-to-Maturity | The following table discloses the fair value and related carrying amount of fixed income investments held within Hagerty Re as of June 30, 2023 and December 31, 2022: Carrying Amount Estimated Fair Value in thousands June 30, 2023 Short-term $ 7,930 $ 7,817 Long-term 8,559 8,243 Total $ 16,489 $ 16,060 December 31, 2022 Short-term $ 6,296 $ 6,205 Long-term 6,690 6,316 Total $ 12,986 $ 12,521 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | As of June 30, 2023 and December 31, 2022, "Long-term debt" consisted of the following: June 30, 2023 December 31, 2022 in thousands Credit Facility $ 75,008 $ 105,000 Notes payable 5,833 3,280 Total debt outstanding 80,841 108,280 Less: current portion — — Total long-term debt outstanding $ 80,841 $ 108,280 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Other Ownership Interests | The following table summarizes the ownership of Hagerty Group Units as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Units Owned Ownership Percentage Units Owned Ownership Percentage Hagerty Group Units held by Hagerty, Inc. 84,405,625 24.8 % 83,202,969 24.5 % Hagerty Group Units held by other unit holders 255,499,164 75.2 % 255,758,466 75.5 % Total 339,904,789 100.0 % 338,961,435 100.0 % |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table summarizes the basic and diluted earnings per share calculations for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands, except per share amounts Earnings (Loss) Per Share of Class A Common Stock, Basic Net income (loss) available to Class A Common Stockholders $ 2,388 $ (5,536) $ 305 $ 21,971 Weighted-average shares of Class A Common Stock outstanding 84,371 82,452 83,820 82,443 Net income (loss) per share of Class A Common Stock, Basic $ 0.03 $ (0.07) $ — $ 0.27 Earnings (Loss) Per Share of Class A Common Stock, Diluted Net income (loss) available to Class A Common Stockholders $ 2,405 $ (5,536) $ 307 $ (6,546) Weighted-average shares of Class A Common Stock outstanding 85,563 82,452 84,424 334,702 Net income (loss) per share of Class A Common Stock, Diluted $ 0.03 $ (0.07) $ — $ (0.02) Net Income (Loss) Available to Class A Common Stockholders Net income (loss) $ 15,539 $ (5,543) $ 514 $ 10,323 Net loss (income) attributable to non-controlling interest (13,134) 7 (208) 11,648 Undistributed earnings allocated to Series A Convertible Preferred Stock (17) — (1) — Net income (loss) available to Class A Common Stockholders, Basic 2,388 (5,536) 305 21,971 Undistributed earnings allocated to to Series A Convertible Preferred Stock 17 — 1 — Adjustment for potentially dilutive Hagerty Group Units — — — (11,237) Adjustment for potentially dilutive Series A Convertible Preferred Stock — — 1 — Adjustment for potentially dilutive warrant liabilities — — — (17,280) Net income (loss) available to Class A Common Stockholders, Diluted $ 2,405 $ (5,536) $ 307 $ (6,546) Weighted-Average Shares of Class A Common Stock Outstanding Weighted-average shares of Class A Common Stock outstanding, Basic 84,371 82,452 83,820 82,443 Adjustment for potentially dilutive Hagerty Group Units — — — 251,034 Adjustment for potentially dilutive Series A Convertible Preferred Stock 597 — 300 — Adjustment for potentially dilutive share-based compensation awards 595 — 304 — Adjustment for potentially dilutive warrant liabilities — — — 1,225 Weighted-average shares of Class A Common Stock outstanding, Diluted 85,563 82,452 84,424 334,702 |
Schedule of the Weighted Average Excluded from Diluted Earnings (Loss) | The following table summarizes the weighted-average potential shares of Class A Common Stock excluded from diluted earnings (loss) per share of Class A Common Stock as their effect would be anti-dilutive: Three months ended Six months ended 2023 2022 2023 2022 in thousands Hagerty Group Units 255,532 251,034 255,620 — Series A Convertible Preferred Stock — — — — Warrants 19,484 19,484 19,484 7,050 Unvested shares associated with RSUs, performance-based RSUs and the ESPP 5,931 6,872 6,328 3,455 Total 280,947 277,390 281,432 10,505 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The following table summarizes share-based compensation expense recognized during the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 in thousands Restricted stock units $ 3,393 $ 3,592 $ 6,626 $ 3,592 Performance restricted stock units 716 715 1,431 715 Employee stock purchase plan — — 165 — Total share-based compensation expense $ 4,109 $ 4,307 $ 8,222 $ 4,307 |
Schedule of Restricted Stock Units Activity | The following table provides a summary of the RSU activity during the six months ended June 30, 2023: Restricted Stock Units Weighted Average Grant Date Fair Value Unvested balance as of December 31, 2022 3,195,038 $ 10.76 Granted 1,009,853 8.74 Vested (824,790) 10.79 Forfeited (65,491) 10.79 Unvested balance as of June 30, 2023 3,314,610 $ 10.14 |
Schedule of Grant-date Fair Value of Performance Stock Units | The following table summarizes the assumptions and related information used to determine the grant-date fair value of performance-based RSUs awarded in April 2022: Inputs Performance Restricted Stock Units Weighted average grant-date fair value per share $5.19 Expected stock volatility 35% Expected term (in years) 7.0 Risk-free interest rate 2.5% Dividend yield —% |
Schedule of Performance-based Units Activity | The following table provides a summary of performance-based RSU activity during the six months ended June 30, 2023: Performance Restricted Stock Units Weighted Average Fair Value Outstanding as of December 31, 2022 3,707,136 $ 5.19 Granted — — Outstanding as of June 30, 2023 3,707,136 $ 5.19 |
Taxation (Tables)
Taxation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | Income tax expense (benefit) reflected in the Condensed Consolidated Financial Statements differs from the tax computed by applying the statutory U.S. federal rate of 21% to "Income (loss) before income tax expense" as follows: Six months ended June 30, 2023 2022 in thousands (except percentages) Income tax (benefit) expense at statutory rate $ 1,661 21 % $ 3,073 21 % State taxes 103 1 % (142) (1) % Loss not subject to entity-level taxes 4,311 55 % 4,692 32 % Foreign rate differential (185) (2) % (175) (1) % Change in valuation allowance 252 3 % 2,002 14 % Change in fair value of warrant liability 477 6 % (5,520) (38) % Permanent items 510 7 % 238 2 % Other, net 269 3 % — — % Income tax expense $ 7,398 94 % $ 4,168 29 % |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Ownership Interests, by Affiliates | As of June 30, 2023, Markel and State Farm had the following equity interests in Hagerty and as a result, are considered related parties: Markel State Farm Equity Interest Shares/Units Percentage of total outstanding (1) Shares/Units Percentage of total outstanding (1) Hagerty, Inc. Class A Common Stock 3,000,000 3.6 % 50,000,000 59.2 % Hagerty, Inc. Class V Common Stock 75,000,000 29.9 % — — % Hagerty, Inc. Series A Convertible Preferred Stock 1,590,668 18.8 % 5,302,226 62.5 % Hagerty Group Units 75,000,000 22.1 % — — % Controlling Interest 3,000,000 3.6 % 50,000,000 59.2 % Non-controlling Interest 75,000,000 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. Further, these percentages do not reflect any ownership of warrants. Refer to Note 15 — Stockholders' Equity for a description of each equity interest in the table above. |
Schedule of Related Party Transactions | The following tables summarize all balances related to the Company's ceded reinsurance business with State Farm affiliates: June 30, 2023 December 31, 2022 Assets: in thousands Commissions receivable $ 2,909 $ — Other current assets 4,483 — Total assets $ 7,392 $ — Liabilities: Accounts payable, accrued expenses and other current liabilities $ 7,782 $ — Total liabilities $ 7,782 $ — Three months ended Six months ended 2023 2022 2023 2022 Revenue: in thousands Earned premium $ (1,390) $ — $ (1,390) $ — Expenses: Ceding commission $ (723) $ — $ (723) $ — Losses and loss adjustment expenses (278) — (278) — Total expenses $ (1,001) $ — $ (1,001) $ — June 30, 2023 December 31, 2022 in thousands (except percentages) Due to insurer $ 116,411 $ 64,873 Percent of total 91 % 95 % Three months ended Six months ended 2023 2022 2023 2022 in thousands (except percentages) Commission revenue $ 100,737 $ 86,716 $ 172,376 $ 146,252 Percent of total 93 % 93 % 95 % 94 % The following tables summarize all balances related to the Company's reinsurance business with Markel affiliates: June 30, 2023 December 31, 2022 Assets: in thousands Premiums receivable $ 185,458 $ 97,897 Commissions receivable 584 — Deferred acquisition costs, net 135,769 103,869 Other current assets 1,217 — Total assets $ 323,028 $ 201,766 Liabilities: Accounts payable, accrued expenses and other current liabilities $ 1,956 $ — Losses payable and provision for unpaid losses and loss adjustment expenses 163,833 160,236 Commissions payable 98,331 75,898 Unearned premiums 293,507 227,192 Total liabilities $ 557,627 $ 463,326 Three months ended Six months ended 2023 2022 2023 2022 Revenue: in thousands Earned premium $ 130,610 $ 89,738 $ 243,972 $ 175,428 Expenses: Ceding commission, net $ 59,419 $ 43,415 $ 113,177 $ 84,303 Losses and loss adjustment expenses 51,194 36,808 97,849 71,379 Total expenses $ 110,613 $ 80,223 $ 211,026 $ 155,682 |
Basis of Presentation and Acc_4
Basis of Presentation and Accounting Policies - Narrative (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Aug. 16, 2022 USD ($) | Aug. 31, 2022 USD ($) | Jan. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2023 GBP (£) segment | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 | Jan. 01, 2022 USD ($) | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||
Reinsurance, Amount Retained, Per Policy | £ | £ 1,000,000 | ||||||||
Purchase of previously held equity method investment | $ 0 | $ 15,250 | |||||||
Number of operating segments | segment | 1 | 1 | |||||||
Number of reportable segments | segment | 1 | 1 | |||||||
Total lease liabilities | $ 85,072 | $ 88,328 | $ 72,800 | ||||||
Lease right-of-use assets | 77,640 | 82,398 | 72,800 | ||||||
Accumulated earnings (deficit) | $ (489,296) | $ (489,602) | |||||||
Accounting Standards Update 2020-05 | |||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||
Accumulated earnings (deficit) | $ 4,300 | ||||||||
The Hagerty Group, LLC | |||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||
Ownership percentage by Hagerty, Inc | 24.80% | 24.80% | 24.50% | ||||||
Member Hubs Holding, LLC | The Hagerty Group, LLC | |||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||
Ownership percentage by Hagerty, Inc | 80% | 80% | |||||||
Broad Arrow Group Inc | |||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||
Business combination, percentage of voting interest acquired | 60% | ||||||||
Business combination, equity consideration issued | $ 73,300 | $ 73,253 | |||||||
Broad Arrow Group Inc | |||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||
Purchase of previously held equity method investment | $ 15,300 | ||||||||
Equity method investment, ownership percentage | 40% | 40% |
Basis of Presentation and Acc_5
Basis of Presentation and Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 114,252 | $ 95,172 | $ 180,165 | |
Restricted cash and cash equivalents | 518,109 | 381,284 | ||
Total cash and cash equivalents and restricted cash and cash equivalents | $ 632,361 | $ 539,191 | $ 561,449 | $ 603,972 |
Basis of Presentation and Acc_6
Basis of Presentation and Accounting Policies - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
NON-CASH INVESTING ACTIVITIES: | ||
Capital expenditures | $ 212 | $ 4,389 |
Acquisitions | 1,742 | 7,500 |
CASH PAID FOR: | ||
Interest | 3,312 | 2,037 |
Income taxes | $ 6,500 | $ 5,250 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue By Distribution Channel Offering and Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | $ 133,762 | $ 111,917 | $ 234,883 | $ 190,596 |
Earned premium | 127,482 | 94,100 | 244,713 | 183,232 |
Total revenue | 261,244 | 206,017 | 479,596 | 373,828 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 121,404 | 101,240 | 217,948 | 175,181 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 9,827 | 8,951 | 13,239 | 12,414 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 2,531 | 1,726 | 3,696 | 3,001 |
Agent | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 59,214 | 51,050 | 100,340 | 84,624 |
Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 74,548 | 60,867 | 134,543 | 105,972 |
Commission and fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 110,187 | 95,506 | 184,799 | 157,967 |
Commission and fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 87,674 | 75,672 | 145,500 | 124,544 |
Commission and fee revenue | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 77,611 | 66,400 | 132,208 | 112,070 |
Commission and fee revenue | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 8,587 | 7,956 | 10,957 | 10,274 |
Commission and fee revenue | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 1,476 | 1,316 | 2,335 | 2,200 |
Commission and fee revenue | Agent | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 46,972 | 40,193 | 78,659 | 66,392 |
Commission and fee revenue | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 40,702 | 35,479 | 66,841 | 58,152 |
Contingent commission revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 22,513 | 19,834 | 39,299 | 33,423 |
Contingent commission revenue | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 22,478 | 19,798 | 39,230 | 33,266 |
Contingent commission revenue | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 0 | 0 | 0 | 0 |
Contingent commission revenue | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 35 | 36 | 69 | 157 |
Contingent commission revenue | Agent | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 12,242 | 10,857 | 21,681 | 18,232 |
Contingent commission revenue | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 10,271 | 8,977 | 17,618 | 15,191 |
Membership, marketplace and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 23,575 | 16,411 | 50,084 | 32,629 |
Membership revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 13,146 | 11,131 | 25,693 | 21,449 |
Membership revenue | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 12,254 | 10,288 | 23,923 | 19,779 |
Membership revenue | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 892 | 843 | 1,770 | 1,670 |
Membership revenue | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 0 | 0 | 0 | 0 |
Membership revenue | Agent | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 0 | 0 | 0 | 0 |
Membership revenue | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 13,146 | 11,131 | 25,693 | 21,449 |
Marketplace and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 10,429 | 5,280 | 24,391 | 11,180 |
Marketplace and other revenue | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 9,061 | 4,754 | 22,587 | 10,066 |
Marketplace and other revenue | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 348 | 152 | 512 | 470 |
Marketplace and other revenue | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 1,020 | 374 | 1,292 | 644 |
Marketplace and other revenue | Agent | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | 0 | 0 | 0 | 0 |
Marketplace and other revenue | Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from customer contracts | $ 10,429 | $ 5,280 | $ 24,391 | $ 11,180 |
Revenue - Contract Assets and L
Revenue - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 38,240 | |
Contract liabilities | $ 47,997 | $ 44,426 |
Notes Receivable - Narrative (D
Notes Receivable - Narrative (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) numberOfLoan | Dec. 31, 2022 USD ($) | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Notes receivable | $ 42,876 | $ 37,427 |
Notes receivable | 30,991 | 25,493 |
Notes receivable | $ 11,885 | $ 11,934 |
Customer Concentration Risk | Notes Receivable | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Loan to value ratio | 36% | |
Number of outstanding loan | numberOfLoan | 3 | |
Principal outstanding loan | $ 11,600 | |
Securities loaned, fair value of collateral | $ 31,800 | |
Customer Concentration Risk | Notes Receivable | Borrower | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Percent of total | 27% | |
Broad Arrow Group Inc | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Loans maturity term | 2 years | |
Loans, renewal option, term | 1 year | |
Loan to value ratio | 65% |
Notes Receivable - Aggregate LT
Notes Receivable - Aggregate LTV Ratio (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Secured loans | $ 42,876 | $ 37,427 |
Estimate of collateral value | $ 100,053 | $ 75,802 |
Aggregate LTV ratio | 42.90% | 49.40% |
Other Assets - Schedule of Prep
Other Assets - Schedule of Prepaid Expenses and Other Assets, Current and Long-term (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Prepaid sales, general and administrative expenses | $ 21,810 | $ 24,234 |
Prepaid software as a service ("SaaS") implementation costs | 19,046 | 18,501 |
Fixed income investments | 16,489 | 12,986 |
Contract costs | 7,482 | 6,576 |
Consignor advances | 6,100 | 0 |
Inventory | 4,973 | 2,074 |
Digital media content | 2,652 | 5,580 |
Deferred reinsurance premiums ceded | 14,552 | 91 |
Other | 11,787 | 12,691 |
Other assets | 104,891 | 82,733 |
Other investments | 4,000 | 4,000 |
Interest rate swap | 3,100 | 3,300 |
Collector vehicles | 2,700 | 2,500 |
Deferred financing costs | 1,400 | 1,400 |
Outstanding reinsurance recoverable | $ 1,400 | |
Digital media | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets | $ 3,800 |
Leases - Operating Lease Expens
Leases - Operating Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease expense | $ 3,153 | $ 2,233 | $ 6,300 | $ 4,283 |
Short-term lease expense | 147 | 66 | 216 | 77 |
Variable lease expense | 842 | 669 | 1,649 | 1,245 |
Sublease revenue | (134) | (33) | (197) | (45) |
Lease cost, net | $ 4,008 | $ 2,935 | $ 7,968 | $ 5,560 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jan. 01, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | |||
Operating lease ROU assets | $ 72,800 | $ 77,640 | $ 82,398 |
Current lease liabilities | 7,988 | 7,556 | |
Long-term lease liabilities | 77,084 | 80,772 | |
Total operating lease liabilities | 72,800 | 85,072 | 88,328 |
ROU assets obtained in exchange for new operating lease liabilities | $ 72,800 | 359 | 82,398 |
Gains on sales and leaseback transactions, net | $ 0 | $ 4,314 | |
Weighted-average lease term | 9 years 9 months 25 days | 10 years 2 months 23 days | |
Weighted-average discount rate | 5.50% | 5.50% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jan. 01, 2022 |
Leases [Abstract] | |||
2023 | $ 6,177 | ||
2024 | 12,299 | ||
2025 | 11,876 | ||
2026 | 11,244 | ||
2027 | 11,052 | ||
Thereafter | 58,646 | ||
Total lease payments | 111,294 | ||
Less: imputed interest | (26,222) | ||
Total lease liabilities | $ 85,072 | $ 88,328 | $ 72,800 |
Acquisitions and Investments -
Acquisitions and Investments - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | |||||
Aug. 16, 2022 | Aug. 31, 2022 | Apr. 30, 2022 | Jan. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Asset Acquisition [Line Items] | |||||||
Consideration transferred | $ 2,700 | $ 18,500 | |||||
Purchase of previously held equity method investment | $ 0 | $ 15,250 | |||||
Speed Digital | Director | |||||||
Asset Acquisition [Line Items] | |||||||
Percentage of purchase price received by related party | 100% | ||||||
Broad Arrow Group Inc | |||||||
Asset Acquisition [Line Items] | |||||||
Business combination, percentage of voting interest acquired | 60% | ||||||
Business combination, equity consideration issued | $ 73,300 | $ 73,253 | |||||
Share price (in dollars per share) | $ 13.47 | ||||||
Speed Digital | |||||||
Asset Acquisition [Line Items] | |||||||
Purchase price | $ 15,000 | ||||||
Cash consideration paid to acquire business | 7,500 | ||||||
Contingent liability, current | 3,750 | ||||||
Contingent liability, noncurrent | $ 3,750 | ||||||
Broad Arrow Group Inc | |||||||
Asset Acquisition [Line Items] | |||||||
Purchase of previously held equity method investment | $ 15,300 | ||||||
Equity method investment, ownership percentage | 40% | 40% |
Acquisitions and Investments _2
Acquisitions and Investments - Schedule of Fair Value of Broad Arrow (Details) - Broad Arrow Group Inc - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Aug. 16, 2022 | Aug. 31, 2022 | Sep. 30, 2022 | |
Asset Acquisition [Line Items] | |||
Total equity consideration | $ 73,300 | $ 73,253 | |
Fair value of previously held equity interest in Broad Arrow | 48,309 | $ 48,300 | |
Total consideration and value to be allocated to net assets | $ 121,562 | ||
Share price (in dollars per share) | $ 13.47 | ||
Remeasurement net gain | 34,700 | ||
Carrying Value | $ 13,600 |
Acquisitions and Investments _3
Acquisitions and Investments - Purchase Price Allocation (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Aug. 31, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Asset Acquisition [Line Items] | |||||
Goodwill | $ 115,060 | $ 115,041 | $ 16,525 | $ 11,488 | |
Broad Arrow Group Inc | |||||
Asset Acquisition [Line Items] | |||||
Notes receivable | $ 21,594 | ||||
Intangible assets, net | 3,100 | ||||
Other assets | 11,756 | ||||
Other liabilities | (13,449) | ||||
Total identifiable net assets acquired | 23,001 | ||||
Goodwill | 98,561 | ||||
Total purchase consideration allocated to net assets acquired | 121,562 | ||||
Cash and cash equivalents | 2,800 | ||||
Notes receivable | 2,600 | ||||
Other current assets | 6,200 | ||||
Note payable | 7,000 | ||||
Contract liabilities | 5,300 | ||||
Accounts payable, accrued expenses and other current liabilities | 700 | ||||
Broad Arrow Group Inc | Trade Names | |||||
Asset Acquisition [Line Items] | |||||
Intangible assets, net | $ 3,100 | ||||
Weighted average useful life | 5 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Aug. 31, 2022 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 115,041 | $ 11,488 | |
Goodwill resulting from acquisition | 0 | 5,044 | |
Effect of foreign currency translation | 19 | (7) | |
Goodwill, ending balance | 115,060 | 16,525 | |
Goodwill | $ 115,060 | $ 16,525 | |
Speed Digital and Broad Arrow | |||
Goodwill [Roll Forward] | |||
Goodwill | $ 103,600 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Cost and Accumulated Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 167,990 | $ 167,990 | $ 154,911 | ||
Less: accumulated amortization | (64,164) | (64,164) | (50,887) | ||
Total | 103,826 | 103,826 | 104,024 | ||
Amortization of intangible assets | 7,000 | $ 5,300 | 13,800 | $ 9,500 | |
Renewal rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 20,221 | $ 20,221 | 17,282 | ||
Renewal rights | Weighted Average | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Useful Life | 10 years | 10 years | |||
Internally developed software | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 119,885 | $ 119,885 | 109,764 | ||
Internally developed software | Weighted Average | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Useful Life | 3 years 1 month 6 days | 3 years 1 month 6 days | |||
Trade names and trademarks | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 12,541 | $ 12,541 | 12,541 | ||
Trade names and trademarks | Weighted Average | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Useful Life | 14 years | 14 years | |||
Relationships and customer lists | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 13,898 | $ 13,898 | 13,890 | ||
Relationships and customer lists | Weighted Average | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Useful Life | 15 years 4 months 24 days | 15 years 4 months 24 days | |||
Other | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 1,445 | $ 1,445 | $ 1,434 | ||
Other | Weighted Average | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Useful Life | 4 years 4 months 24 days | 4 years 4 months 24 days |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 16,808 | |
2024 | 26,110 | |
2025 | 18,760 | |
2026 | 11,176 | |
2027 | 8,376 | |
Thereafter | 22,596 | |
Total | $ 103,826 | $ 104,024 |
Provision for Unpaid Losses a_3
Provision for Unpaid Losses and Loss Adjustment Expenses - Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Gross reserves for unpaid losses and loss adjustment expenses, beginning of year | $ 111,741 | $ 74,869 | ||
Less: Reinsurance recoverable on unpaid losses and loss adjustment expenses | 843 | 0 | ||
Net reserves for unpaid losses and loss adjustment expenses, beginning of year | 110,898 | 74,869 | ||
Incurred losses and loss adjustment expenses: | ||||
Current accident year | 101,976 | 75,539 | ||
Prior accident year | 0 | 0 | ||
Total incurred losses and loss adjustment expenses | $ 53,564 | $ 38,620 | 101,976 | 75,539 |
Payments: | ||||
Current accident year | 8,639 | 6,698 | ||
Prior accident year | 32,744 | 19,706 | ||
Total payments | 41,383 | 26,404 | ||
Effect of foreign currency rate changes | 104 | (83) | ||
Net reserves for unpaid losses and loss adjustment expenses, end of period | 171,595 | 123,921 | 171,595 | 123,921 |
Reinsurance recoverable on unpaid losses and loss adjustment expenses | 538 | 0 | 538 | 0 |
Gross reserves for unpaid losses and loss adjustment expenses, end of period | $ 172,133 | $ 123,921 | $ 172,133 | $ 123,921 |
Reinsurance - Earned Premium (D
Reinsurance - Earned Premium (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Premiums: | ||||
Assumed | $ 188,456 | $ 139,627 | $ 320,643 | $ 237,255 |
Ceded | (8,541) | 0 | (22,269) | (9,690) |
Net | 179,915 | 139,627 | 298,374 | 227,565 |
Premiums earned: | ||||
Assumed | 132,123 | 96,504 | 252,520 | 187,860 |
Ceded | (4,641) | (2,404) | (7,807) | (4,628) |
Net | $ 127,482 | $ 94,100 | $ 244,713 | $ 183,232 |
Reinsurance (Details)
Reinsurance (Details) $ in Thousands | 6 Months Ended | ||
Mar. 01, 2023 | Jan. 01, 2023 | Jun. 30, 2023 USD ($) letter_of_credit | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Reinsurance retention policy, total insured amount | $ 5,000 | ||
Reinsurance, excess retention, amount reinsured, per event | 105,000 | ||
Reinsurance, amount retained, per event | $ 25,000 | ||
Reinsurance retention policy, number of coverage layers | letter_of_credit | 2 | ||
Reinsurance Contract [Axis]: Catastrophe Program - High Net Worth | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Reinsurance retention policy, total insured amount | $ 5,000 | ||
Reinsurance, excess retention, amount reinsured, per event | 30,000 | ||
Reinsurance, amount retained, per event | 9,000 | ||
Reinsured risk, percentage | 50% | 20% | |
Reinsurance Contract [Axis]: Catastrophe Reinsurance Layer One | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Reinsurance, excess retention, amount reinsured, per event | 25,000 | ||
Reinsurance, amount retained, per event | 25,000 | ||
Reinsurance Contract [Axis]: Catastrophe Reinsurance Layer Three | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Reinsurance, excess retention, amount reinsured, per event | 21,000 | ||
Reinsurance, amount retained, per event | $ 9,000 | ||
Reinsurance retention policy, number of coverage layers | letter_of_credit | 1 | ||
Reinsurance Contract [Axis]: Catastrophe Reinsurance Layer Two | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Reinsurance, excess retention, amount reinsured, per event | $ 55,000 | ||
Reinsurance, amount retained, per event | $ 50,000 |
Reinsurance - Reinsurance Recov
Reinsurance - Reinsurance Recoverable on Paid and Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | ||
Reinsurance recoverable on paid losses and loss adjustment expenses | $ 106 | $ 605 |
Reinsurance recoverable on unpaid losses and loss adjustment expenses | 538 | 843 |
Total reinsurance recoverable | $ 644 | $ 1,448 |
Restructuring, Impairment and_3
Restructuring, Impairment and Related Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring, impairment and related charges | $ 2,849 | $ 0 | $ 8,384 | $ 0 | $ 18,300 | |
Impairment of operating lease right-of-use assets | 2,600 | $ 1,147 | $ 0 | 4,700 | ||
Gain (loss) on disposition of leasehold improvements | 1,500 | |||||
Reduction In Force | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring, impairment and related charges | $ 5,500 | 8,000 | ||||
Severance costs | $ 200 | 5,100 | ||||
Asset impairment charges | $ 400 | |||||
Voluntary Retirement Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring, impairment and related charges | $ 4,200 |
Restructuring, Impairment and_4
Restructuring, Impairment and Related Charges - Reconciliation of Restructuring Liability (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Restructuring and Related Activities [Abstract] | |
Beginning balance | $ 9,470 |
Costs incurred and charged to expense | 8,384 |
Costs paid or otherwise settled | (16,995) |
Ending balance | $ 859 |
Fair Value Measurements - Warra
Fair Value Measurements - Warrant liabilities (Details) | Jun. 30, 2023 shares |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 19,483,550 |
Public warrants | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 5,750,000 |
Private placement warrants | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 257,500 |
Underwriter Warrants | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 28,750 |
OTM Warrants | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 1,300,000 |
PIPE Warrants | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 12,147,300 |
Fair Value Measurements - Input
Fair Value Measurements - Inputs in the Valuation Model (Details) | Jun. 30, 2023 $ / shares USD ($) year |
Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | $ | 0 |
Private placement warrants | Exercise price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 11.50 |
Private placement warrants | Common stock price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 9.36 |
Private placement warrants | Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 0.425 |
Private placement warrants | Expected term of the warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | year | 3.43 |
Private placement warrants | Risk-free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 0.0440 |
Private placement warrants | Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | $ | 0 |
Underwriter Warrants | Exercise price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 11.50 |
Underwriter Warrants | Common stock price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 9.36 |
Underwriter Warrants | Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 0.425 |
Underwriter Warrants | Expected term of the warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | year | 3.43 |
Underwriter Warrants | Risk-free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 0.0440 |
Underwriter Warrants | Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | $ | 0 |
OTM Warrants | Exercise price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 15 |
OTM Warrants | Common stock price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 9.36 |
OTM Warrants | Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 0.410 |
OTM Warrants | Expected term of the warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | year | 8.43 |
OTM Warrants | Risk-free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 0.0390 |
OTM Warrants | Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | $ | 0 |
PIPE Warrants | Exercise price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 11.50 |
PIPE Warrants | Common stock price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 9.36 |
PIPE Warrants | Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 0.425 |
PIPE Warrants | Expected term of the warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | year | 3.43 |
PIPE Warrants | Risk-free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | 0.0440 |
PIPE Warrants | Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants measurement input | $ | 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial Assets | ||
Total | $ 3,146 | $ 3,294 |
Financial Liabilities | ||
Total | 47,830 | 45,561 |
Public warrants | ||
Financial Liabilities | ||
Warrants | 13,512 | 12,880 |
Private placement warrants | ||
Financial Liabilities | ||
Warrants | 689 | 673 |
Underwriter Warrants | ||
Financial Liabilities | ||
Warrants | 77 | 75 |
OTM Warrants | ||
Financial Liabilities | ||
Warrants | 4,937 | 4,706 |
PIPE Warrants | ||
Financial Liabilities | ||
Warrants | 28,615 | 27,227 |
Interest rate swaps | ||
Financial Assets | ||
Interest rate swaps | 3,146 | 3,294 |
Level 1 | ||
Financial Assets | ||
Total | 0 | 0 |
Financial Liabilities | ||
Total | 13,512 | 12,880 |
Level 1 | Public warrants | ||
Financial Liabilities | ||
Warrants | 13,512 | 12,880 |
Level 1 | Private placement warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 1 | Underwriter Warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 1 | OTM Warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 1 | PIPE Warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 1 | Interest rate swaps | ||
Financial Assets | ||
Interest rate swaps | 0 | 0 |
Level 2 | ||
Financial Assets | ||
Total | 3,146 | 3,294 |
Financial Liabilities | ||
Total | 0 | 0 |
Level 2 | Public warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 2 | Private placement warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 2 | Underwriter Warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 2 | OTM Warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 2 | PIPE Warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 2 | Interest rate swaps | ||
Financial Assets | ||
Interest rate swaps | 3,146 | 3,294 |
Level 3 | ||
Financial Assets | ||
Total | 0 | 0 |
Financial Liabilities | ||
Total | 34,318 | 32,681 |
Level 3 | Public warrants | ||
Financial Liabilities | ||
Warrants | 0 | 0 |
Level 3 | Private placement warrants | ||
Financial Liabilities | ||
Warrants | 689 | 673 |
Level 3 | Underwriter Warrants | ||
Financial Liabilities | ||
Warrants | 77 | 75 |
Level 3 | OTM Warrants | ||
Financial Liabilities | ||
Warrants | 4,937 | 4,706 |
Level 3 | PIPE Warrants | ||
Financial Liabilities | ||
Warrants | 28,615 | 27,227 |
Level 3 | Interest rate swaps | ||
Financial Assets | ||
Interest rate swaps | $ 0 | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level Three Reconciliation (Details) - Warrant Liabilities - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 32,681 | $ 64,123 |
Change in fair value of warrant liabilities | 1,637 | (18,581) |
Exercise of warrants | (1,906) | |
Ending balance | 34,318 | 43,636 |
Private placement warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 673 | 1,248 |
Change in fair value of warrant liabilities | 16 | (402) |
Exercise of warrants | 0 | |
Ending balance | 689 | 846 |
Underwriter Warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 75 | 139 |
Change in fair value of warrant liabilities | 2 | (44) |
Exercise of warrants | 0 | |
Ending balance | 77 | 95 |
OTM Warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 4,706 | 6,849 |
Change in fair value of warrant liabilities | 231 | (1,301) |
Exercise of warrants | 0 | |
Ending balance | 4,937 | 5,548 |
PIPE Warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 27,227 | 55,887 |
Change in fair value of warrant liabilities | 1,388 | (16,834) |
Exercise of warrants | (1,906) | |
Ending balance | $ 28,615 | $ 37,147 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Estimated Fair Value (Details) - Fixed Income Securities - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term | $ 7,930 | $ 6,296 |
Long-term | 8,559 | 6,690 |
Total | 16,489 | 12,986 |
Level 2 | Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term | 7,817 | 6,205 |
Long-term | 8,243 | 6,316 |
Total | $ 16,060 | $ 12,521 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt outstanding | $ 80,841 | $ 108,280 |
Less: current portion | 0 | 0 |
Total long-term debt outstanding | 80,841 | 108,280 |
Notes payable | ||
Debt Instrument [Line Items] | ||
Total debt outstanding | 5,833 | 3,280 |
Revolving Credit Facility | Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt outstanding | $ 75,008 | $ 105,000 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 6 Months Ended | ||
Jun. 30, 2023 USD ($) letter_of_credit | Jun. 23, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 80,841,000 | $ 108,280,000 | |
Number of letters of credit authorized | letter_of_credit | 4 | ||
Letters of credit outstanding, amount | $ 11,600,000 | ||
Credit Facility | |||
Debt Instrument [Line Items] | |||
Annual extension term | 1 year | ||
Notes payable | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 5,833,000 | 3,280,000 | |
Notes payable | United Kingdom | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 5,800,000 | 3,300,000 | |
Notes payable | United Kingdom | Minimum | |||
Debt Instrument [Line Items] | |||
Fixed rate | 7% | ||
Notes payable | United Kingdom | Maximum | |||
Debt Instrument [Line Items] | |||
Fixed rate | 9% | ||
Unsecured term loan | State Farm | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 25,000,000 | ||
Revolving Credit Facility | Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 230,000,000 | ||
Accordion feature, increase limit | $ 50,000,000 | ||
Debt, weighted average interest rate | 7.38% | ||
Total debt outstanding | $ 75,008,000 | $ 105,000,000 | |
Revolving Credit Facility | Foreign Line of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 25,000,000 | ||
Letter of Credit | Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 25,000,000 |
Interest Rate Swaps (Details)
Interest Rate Swaps (Details) - Interest rate swaps | Jun. 30, 2023 USD ($) swap |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, number of instruments held | swap | 1 |
Derivative notional amount | $ | $ 35,000,000 |
Derivative fixed interest rate | 0.81% |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jun. 23, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) consecutiveTradingDay $ / shares shares | Dec. 31, 2022 $ / shares | |
Class of Stock [Line Items] | |||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Series A Convertible Preferred Stock | |||
Class of Stock [Line Items] | |||
Number of shares issued in transaction (in shares) | shares | 8,483,561 | ||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.0001 | ||
Sale of stock, consideration received per transaction | $ | $ 80 | ||
Sale of stock, price per share ( in dollar per share) | $ / shares | $ 9.43 | ||
Payments of debt issuance costs | $ | $ 0.8 | ||
Consideration received on transaction | $ | $ 79.2 | ||
Preferred stock, redemption amount | $ | $ 123.4 | ||
Preferred stock, dividend rate, percentage | 7% | ||
Convertible preferred stock Per-share purchase price (in dollars per shares) | $ / shares | $ 11.79 | ||
Conversion of stock, shares converted (in shares) | shares | 0 | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Debt instrument, convertible, threshold trading days | consecutiveTradingDay | 20 | ||
Debt instrument, convertible, threshold consecutive trading days | consecutiveTradingDay | 30 | ||
Preferred stock, convertible, shares issuable (in shares) | shares | 6,785,410 | ||
Class A Common Stock | On or after the Third and Prior to the Seventh Anniversary | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, threshold percentage of stock price trigger | 150% | ||
Class A Common Stock | On or after the Seventh and Prior to the Tenth Anniversary | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, threshold percentage of stock price trigger | 100% |
Convertible Preferred Stock - C
Convertible Preferred Stock - Change of Control, Fundamental Transaction and Optional Term Redemption (Details) - Series A Convertible Preferred Stock $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Fundamental Transaction | |
Class of Stock [Line Items] | |
Acquisition of minimum transaction value | $ 500 |
Minimum value of equity and debt financing | $ 500 |
Prior to or on the Third Anniversary | Change of Control | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 120% |
Prior to or on the Third Anniversary | Fundamental Transaction | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 120% |
After the Third but Prior to or on the Fifth Anniversary | Change of Control | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 110% |
After the Third but Prior to or on the Fifth Anniversary | Fundamental Transaction | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 110% |
After the Fifth Anniversary | Change of Control | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 100% |
After the Fifth but Prior to or on the Sixth Anniversary | Fundamental Transaction | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 108% |
After the Fifth but Prior to or on the Sixth Anniversary | Optional Term Redemption | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 110% |
After the Sixth but Prior to or on the Seventh Anniversary | Fundamental Transaction | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 106% |
After the Sixth but Prior to or on the Seventh Anniversary | Optional Term Redemption | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 108% |
After the Seventh but Prior to or on the Eighth Anniversary | Fundamental Transaction | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 104% |
After the Seventh but Prior to or on the Eighth Anniversary | Optional Term Redemption | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 106% |
After the Eighth but Prior to or on the Ninth Anniversary | Fundamental Transaction | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 102% |
After the Eighth but Prior to or on the Ninth Anniversary | Optional Term Redemption | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 104% |
After the Ninth Anniversary | Fundamental Transaction | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 100% |
On or after the Ninth but Prior to Tenth Anniversary | Optional Term Redemption | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 102% |
On or after the Tenth Anniversary | Optional Term Redemption | |
Class of Stock [Line Items] | |
Convertible preferred stock, redemption price, percentage | 100% |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Mar. 23, 2022 USD ($) | Jun. 30, 2023 vote $ / shares shares | Mar. 31, 2023 shares | Mar. 31, 2022 USD ($) shares | Mar. 23, 2022 USD ($) | Jun. 30, 2023 vote $ / shares shares | Dec. 31, 2022 $ / shares shares | Jun. 30, 2022 shares | Dec. 31, 2021 USD ($) shares | |
Class of Stock [Line Items] | |||||||||
Common stock, shares, outstanding (in shares) | 339,904,789 | 339,904,789 | 338,961,435 | ||||||
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | |||||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | ||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | ||||||
Redeemable noncontrolling interest, equity, carrying amount | $ | $ 2,100,000 | $ 2,100,000 | $ 593,300 | ||||||
Redemption value adjustment for redeemable non-controlling interest | $ | $ (1,560,420) | 1,600,000 | |||||||
Removal of the redeemable feature of the non-controlling interest | $ | 2,142,490 | ||||||||
Additional Paid in Capital | |||||||||
Class of Stock [Line Items] | |||||||||
Redemption value adjustment for redeemable non-controlling interest | $ | (162,095) | (162,100) | |||||||
Removal of the redeemable feature of the non-controlling interest | $ | 528,600 | 528,615 | |||||||
Accumulated Earnings (Deficit) | |||||||||
Class of Stock [Line Items] | |||||||||
Redemption value adjustment for redeemable non-controlling interest | $ | (1,398,325) | $ (1,400,000) | |||||||
Removal of the redeemable feature of the non-controlling interest | $ | 1,400,000 | 1,398,325 | |||||||
Non-controlling Interest | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, shares, outstanding (in shares) | 255,499,164 | 255,499,164 | 255,758,466 | ||||||
Removal of the redeemable feature of the non-controlling interest | $ | $ 215,600 | $ 215,550 | |||||||
Class A Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Common stock, votes per share | vote | 1 | 1 | |||||||
Common stock, shares, issued (in shares) | 84,405,625 | 84,405,625 | 83,202,969 | ||||||
Common stock, shares, outstanding (in shares) | 84,405,625 | 84,405,625 | 83,202,969 | ||||||
Class A Common Stock | Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, shares, outstanding (in shares) | 84,406,000 | 83,339,000 | 82,452,000 | 84,406,000 | 83,203,000 | 82,452,000 | 82,327,000 | ||
Conversion of Hagerty Group Units to Class A Common Stock (in shares) | 141,000 | 119,000 | 259,302 | ||||||
Class V Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Common stock, votes per share | vote | 10 | 10 | |||||||
Common stock, shares, issued (in shares) | 251,033,906 | 251,033,906 | 251,033,906 | ||||||
Common stock, shares, outstanding (in shares) | 251,033,906 | 251,033,906 | 251,033,906 | ||||||
Common stock, conversion ratio | 1 | ||||||||
Class V Common Stock | Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, shares, outstanding (in shares) | 251,034,000 | 251,034,000 | 251,034,000 | 251,034,000 | 251,034,000 | 251,034,000 | 251,034,000 | ||
Convertible Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Stockholders' Equity - Ownershi
Stockholders' Equity - Ownership (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | ||
Units owned (in shares) | 339,904,789 | 338,961,435 |
Non-controlling Interest | ||
Class of Stock [Line Items] | ||
Units owned (in shares) | 255,499,164 | 255,758,466 |
The Hagerty Group, LLC | ||
Class of Stock [Line Items] | ||
Ownership percentage by Hagerty, Inc | 24.80% | 24.50% |
Percentage of total outstanding | 75.20% | 75.50% |
Total ownership percentage | 100% | 100% |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Units owned (in shares) | 84,405,625 | 83,202,969 |
Common stock, shares, issued (in shares) | 84,405,625 | 83,202,969 |
Earnings (Loss) Per Share - Ear
Earnings (Loss) Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net Income (Loss) Available to Class A Common Stockholders | |||||
Net income (loss) | $ 15,539 | $ (15,025) | $ (5,543) | $ 514 | $ 10,323 |
Net loss (income) attributable to non-controlling interest | (13,134) | 7 | (208) | 11,648 | |
Class A Common Stock | |||||
Earnings (Loss) Per Share of Class A Common Stock, Basic | |||||
Net income (loss) available to Class A Common Stockholders, Basic | $ 2,388 | $ (5,536) | $ 305 | $ 21,971 | |
Weighted average shares of Class A Common Stock outstanding, basic (in shares) | 84,371 | 82,452 | 83,820 | 82,443 | |
Net income (loss) Per class A common stock, basic (in dollars per share) | $ 0.03 | $ (0.07) | $ 0 | $ 0.27 | |
Earnings (Loss) Per Share of Class A Common Stock, Diluted | |||||
Net income (loss) available to Class A Common Stockholders | $ 2,405 | $ (5,536) | $ 307 | $ (6,546) | |
Weighted-average shares of class A common stock outstanding (in shares) | 85,563 | 82,452 | 84,424 | 334,702 | |
Net income (loss) per class A common stock, diluted (in dollars per share) | $ 0.03 | $ (0.07) | $ 0 | $ (0.02) | |
Net Income (Loss) Available to Class A Common Stockholders | |||||
Net income (loss) | $ 15,539 | $ (5,543) | $ 514 | $ 10,323 | |
Net loss (income) attributable to non-controlling interest | (13,134) | 7 | (208) | 11,648 | |
Undistributed earnings allocated to Series A Convertible Preferred Stock | (17) | 0 | (1) | 0 | |
Net income (loss) available to Class A Common Stockholders, Basic | 2,388 | (5,536) | 305 | 21,971 | |
Undistributed earnings allocated to to Series A Convertible Preferred Stock | 17 | 0 | 1 | 0 | |
Adjustment for potentially dilutive Hagerty Group Units | 0 | 0 | 0 | (11,237) | |
Adjustment for potentially dilutive Series A Convertible Preferred Stock | 0 | 0 | 1 | 0 | |
Adjustment for potentially dilutive warrant liabilities | 0 | 0 | 0 | (17,280) | |
Net income (loss) available to Class A Common Stockholders, Diluted | $ 2,405 | $ (5,536) | $ 307 | $ (6,546) | |
Weighted-Average Shares of Class A Common Stock Outstanding | |||||
Weighted average shares of Class A Common Stock outstanding, basic (in shares) | 84,371 | 82,452 | 83,820 | 82,443 | |
Adjustment for potentially dilutive hagerty group units (in shares) | 0 | 0 | 0 | 251,034 | |
Adjustment for potentially dilutive Series A Convertible Preferred Stock ( in shares) | 597 | 0 | 300 | 0 | |
Adjustment for potentially dilutive share-based compensation awards (in shares) | 595 | 0 | 304 | 0 | |
Adjustment for potentially dilutive warrant liabilities (in shares) | 0 | 0 | 0 | 1,225 | |
Weighted-average shares of class A common stock outstanding, diluted (in shares) | 85,563 | 82,452 | 84,424 | 334,702 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from diluted earnings (loss) per Class A Common Stock (in shares) | 280,947 | 277,390 | 281,432 | 10,505 |
Hagerty Group Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from diluted earnings (loss) per Class A Common Stock (in shares) | 255,532 | 251,034 | 255,620 | 0 |
Series A Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from diluted earnings (loss) per Class A Common Stock (in shares) | 0 | 0 | 0 | 0 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from diluted earnings (loss) per Class A Common Stock (in shares) | 19,484 | 19,484 | 19,484 | 7,050 |
Unvested shares associated with RSUs, performance-based RSUs and the ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from diluted earnings (loss) per Class A Common Stock (in shares) | 5,931 | 6,872 | 6,328 | 3,455 |
Warrant Liabilities (Details)
Warrant Liabilities (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 02, 2021 | |
Class of Warrant or Right [Line Items] | ||||||
Warrants outstanding (in shares) | 19,483,550 | 19,483,550 | ||||
Loss (gain) on fair value adjustments to warrant liabilities | $ 1,754 | $ 5,400 | $ 2,269 | $ (26,286) | ||
Warrants exercised (in shares) | 0 | |||||
Warrant liabilities | $ 47,830 | $ 47,830 | $ 45,561 | |||
Warrant Liabilities | ||||||
Class of Warrant or Right [Line Items] | ||||||
Exercise of warrants | $ (1,906) | |||||
Class A Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants exercised (in shares) | 124,748 | |||||
Public warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants outstanding (in shares) | 5,750,000 | 5,750,000 | ||||
Public warrants | Class A Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of securities called by each warrant (in shares) | 1 | |||||
Exercise price of warrants (in dollars per share) | $ 11.50 | |||||
Private placement warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants outstanding (in shares) | 257,500 | 257,500 | ||||
Exercise price of warrants (in dollars per share) | $ 11.50 | |||||
Private placement warrants | Warrant Liabilities | ||||||
Class of Warrant or Right [Line Items] | ||||||
Exercise of warrants | $ 0 | |||||
Private placement warrants | Class A Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of securities called by each warrant (in shares) | 1 | |||||
Underwriter Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants outstanding (in shares) | 28,750 | 28,750 | ||||
Exercise price of warrants (in dollars per share) | $ 11.50 | |||||
Underwriter Warrants | Warrant Liabilities | ||||||
Class of Warrant or Right [Line Items] | ||||||
Exercise of warrants | 0 | |||||
Underwriter Warrants | Class A Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of securities called by each warrant (in shares) | 1 | |||||
OTM Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants outstanding (in shares) | 1,300,000 | 1,300,000 | ||||
Exercise price of warrants (in dollars per share) | $ 15 | |||||
OTM Warrants | Warrant Liabilities | ||||||
Class of Warrant or Right [Line Items] | ||||||
Exercise of warrants | $ 0 | |||||
OTM Warrants | Class A Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of securities called by each warrant (in shares) | 1 | |||||
PIPE Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants outstanding (in shares) | 12,147,300 | 12,147,300 | ||||
Exercise price of warrants (in dollars per share) | $ 11.50 | |||||
Warrants exercised (in shares) | 522,000 | |||||
PIPE Warrants | Warrant Liabilities | ||||||
Class of Warrant or Right [Line Items] | ||||||
Exercise of warrants | $ (1,906) | |||||
PIPE Warrants | Class A Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of securities called by each warrant (in shares) | 1 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Apr. 30, 2022 USD ($) d $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2022 $ / shares shares | Dec. 31, 2021 shares | |
2021 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | 30,400,000 | |||
Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in years) | 2 years | |||
Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in years) | 5 years | |||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 1,009,853 | 3,173,231 | ||
Granted (in dollars per share) | $ / shares | $ 8.74 | $ 10.79 | ||
Fair value of award grants | $ | $ 8,900,000 | |||
Vested (in shares) | (824,790) | 0 | ||
Unrecognized compensation cost | $ | $ 26,400,000 | |||
Weighted average recognition period (in years) | 3 years 2 months 23 days | |||
Performance restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 3,707,136 | 0 | ||
Granted (in dollars per share) | $ / shares | $ 0 | |||
Grant date fair value of performance restricted stock units | $ | $ 19,200,000 | |||
Performance restricted stock units | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 25% | |||
Share price (in dollar per share) | $ / shares | $ 20 | |||
Number of consecutive days | d | 60 | |||
Performance restricted stock units | Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 25% | |||
Share price (in dollar per share) | $ / shares | $ 25 | |||
Number of consecutive days | d | 60 | |||
Performance restricted stock units | Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 50% | |||
Share price (in dollar per share) | $ / shares | $ 30 | |||
Number of consecutive days | d | 60 | |||
Performance restricted stock units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance period (in years) | 3 years | |||
Performance restricted stock units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance period (in years) | 7 years | |||
Class A Common Stock | Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for future issuance (in shares) | 11,400,000 | |||
Stock purchased under ESPP plan (in shares) | (118,009) | |||
Class A Common Stock | 2021 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for future issuance (in shares) | 38,300,000 | |||
Class A Common Stock | Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Purchase price | 15% |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 4,109 | $ 4,307 | $ 8,222 | $ 4,307 |
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 0 | 0 | 165 | 0 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 3,393 | 3,592 | 6,626 | 3,592 |
Performance restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 716 | $ 715 | $ 1,431 | $ 715 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted stock units - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Restricted Stock Units | ||
Beginning balance (in shares) | 3,195,038 | |
Granted (in shares) | 1,009,853 | 3,173,231 |
Vested (in shares) | (824,790) | 0 |
Forfeited (in shares) | (65,491) | |
Ending balance (in shares) | 3,314,610 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 10.76 | |
Granted (in dollars per share) | 8.74 | $ 10.79 |
Vested (in dollars per share) | 10.79 | |
Forfeited (in dollars per share) | 10.79 | |
Ending balance (in dollars per share) | $ 10.14 |
Share-Based Compensation - Gran
Share-Based Compensation - Grant-date Fair Value of Performance Stock Units (Details) - Performance restricted stock units - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant-date fair value per share (in dollars per share) | $ 5.19 | $ 5.19 |
Expected stock volatility | 35% | |
Expected term (in years) | 7 years | |
Risk-free interest rate | 2.50% | |
Dividend yield | 0% |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Stock Units Outstanding (Details) - Performance restricted stock units - $ / shares | 1 Months Ended | 6 Months Ended |
Apr. 30, 2022 | Jun. 30, 2023 | |
Performance Restricted Stock Units | ||
Beginning balance (in shares) | 3,707,136 | |
Granted (in shares) | 3,707,136 | 0 |
Ending balance (in shares) | 3,707,136 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 5.19 | |
Granted (in dollars per share) | 0 | |
Ending balance (in dollars per share) | $ 5.19 |
Taxation - Narrative (Details)
Taxation - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | Dec. 02, 2021 | |
Income Tax Disclosure [Abstract] | |||
Tax benefit distributions to noncontrolling interest holders, percent | 85% | ||
Deferred tax assets, excess tax basis | $ 156.6 | $ 159.3 | |
Valuation allowance | 176.3 | 176.1 | |
Tax benefit retained by parent, percent | 15% | ||
Tax savings rate | 25.60% | ||
Tax receivable agreement, fair value | 0.6 | $ 3.2 | |
Tax receivable agreement, increase (decrease) In fair value | $ (2.6) |
Taxation - Income Tax Rate Reco
Taxation - Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Amount | ||||
Income tax (benefit) expense at statutory rate | $ 1,661 | $ 3,073 | ||
State taxes | 103 | (142) | ||
Loss not subject to entity-level taxes | 4,311 | 4,692 | ||
Foreign rate differential | (185) | (175) | ||
Change in valuation allowance | 252 | 2,002 | ||
Change in fair value of warrant liability | 477 | (5,520) | ||
Permanent items | 510 | 238 | ||
Other, net | 269 | 0 | ||
Income tax expense | $ 3,730 | $ 2,138 | $ 7,398 | $ 4,168 |
Percent | ||||
Income tax (benefit) expense at statutory rate | 21% | 21% | ||
State taxes | 1% | (1.00%) | ||
Loss not subject to entity-level taxes | 55% | 32% | ||
Foreign rate differential | (2.00%) | (1.00%) | ||
Change in valuation allowance | 3% | 14% | ||
Change in fair value of warrant liability | 6% | (38.00%) | ||
Permanent items | 7% | 2% | ||
Other, net | 3% | 0% | ||
Income tax expense | 94% | 29% |
Related-Party Transactions - Eq
Related-Party Transactions - Equity Interests in Hagerty (Details) - Hagerty, Inc. - Affiliated Entity | Jun. 30, 2023 shares |
Markel | Total Stockholders' Equity | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 3,000,000 |
Percentage of total outstanding | 3.60% |
Markel | Non-controlling Interest | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 75,000,000 |
Percentage of total outstanding | 29.40% |
Markel | Hagerty Group Units | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 75,000,000 |
Percentage of total outstanding | 22.10% |
State Farm | Total Stockholders' Equity | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 50,000,000 |
Percentage of total outstanding | 59.20% |
State Farm | Non-controlling Interest | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 0 |
Percentage of total outstanding | 0% |
State Farm | Hagerty Group Units | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 0 |
Percentage of total outstanding | 0% |
Class A Common Stock | Markel | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 3,000,000 |
Percentage of total outstanding | 3.60% |
Class A Common Stock | State Farm | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 50,000,000 |
Percentage of total outstanding | 59.20% |
Class V Common Stock | Markel | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 75,000,000 |
Percentage of total outstanding | 29.90% |
Class V Common Stock | State Farm | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 0 |
Percentage of total outstanding | 0% |
Series A Convertible Preferred Stock | Markel | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 1,590,668 |
Percentage of total outstanding | 18.80% |
Series A Convertible Preferred Stock | State Farm | |
Class of Stock [Line Items] | |
Equity interests in Hagerty (in shares) | 5,302,226 |
Percentage of total outstanding | 62.50% |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Mar. 01, 2023 | Jan. 01, 2023 | Aug. 16, 2022 | Aug. 31, 2022 | Apr. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2020 | Sep. 30, 2022 | Jan. 31, 2022 | |
Related Party Transaction [Line Items] | |||||||||||||
Net | $ (127,482) | $ (94,100) | $ (244,713) | $ (183,232) | |||||||||
Ceding commission | (60,350) | (45,255) | (115,775) | (87,633) | |||||||||
Losses and loss adjustment expenses | (53,564) | (38,620) | (101,976) | (75,539) | |||||||||
Total operating expenses | (243,991) | (203,630) | $ (478,832) | $ (384,445) | |||||||||
Broad Arrow Group Inc | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Equity method investment, ownership percentage | 40% | 40% | |||||||||||
Broad Arrow Group Inc | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Business combination, percentage of voting interest acquired | 60% | ||||||||||||
Business combination, equity consideration issued | $ 73,300 | $ 73,253 | |||||||||||
Speed Digital | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Purchase price | $ 15,000 | ||||||||||||
Affiliated Entity | Reinsurance Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Reinsured risk, ceded, percentage | 50% | 10% | |||||||||||
Reinsured risk, percentage | 100% | 80% | 70% | 80% | |||||||||
Affiliated Entity | Reinsurance Agreement | U.K. | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Reinsured risk, percentage | 80% | 70% | |||||||||||
Affiliated Entity | State Farm | Advanced Commission Payment | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Related party transaction, amounts of transaction | $ 20,000 | ||||||||||||
Affiliated Entity | State Farm | Reinsurance Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Net | (1,390) | 0 | $ (1,390) | $ 0 | |||||||||
Ceding commission | (723) | 0 | (723) | 0 | |||||||||
Losses and loss adjustment expenses | (278) | 0 | (278) | 0 | |||||||||
Total operating expenses | $ (1,001) | $ 0 | $ (1,001) | $ 0 | |||||||||
Speed Digital | Director | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Percentage of purchase price received by related party | 100% |
Related-Party Transactions - Re
Related-Party Transactions - Reinsurance Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||||
Premiums receivable | $ 193,268 | $ 193,268 | $ 100,700 | |||
Commissions receivable | 42,317 | 42,317 | 60,151 | |||
Deferred acquisition costs, net | 140,098 | 140,098 | 107,342 | |||
Other current assets | 63,929 | 63,929 | 45,651 | |||
TOTAL ASSETS | 1,552,530 | 1,552,530 | 1,312,518 | |||
Losses payable and provision for unpaid losses and loss adjustment expenses | 172,133 | $ 123,921 | 172,133 | $ 123,921 | 110,898 | $ 74,869 |
Commissions payable | 101,739 | 101,739 | 77,075 | |||
Unearned premiums | 303,585 | 303,585 | 235,462 | |||
TOTAL LIABILITIES | 1,094,561 | 1,094,561 | 945,149 | |||
Earned premium | (127,482) | (94,100) | (244,713) | (183,232) | ||
Ceding commission | (60,350) | (45,255) | (115,775) | (87,633) | ||
Losses and loss adjustment expenses | (53,564) | (38,620) | (101,976) | (75,539) | ||
Total expenses | (243,991) | (203,630) | (478,832) | (384,445) | ||
State Farm | Reinsurance Agreement | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Commissions receivable | 2,909 | 2,909 | 0 | |||
Other current assets | 4,483 | 4,483 | 0 | |||
TOTAL ASSETS | 7,392 | 7,392 | 0 | |||
Accounts payable, accrued expenses and other current liabilities | 7,782 | 7,782 | 0 | |||
TOTAL LIABILITIES | 7,782 | 7,782 | 0 | |||
Earned premium | (1,390) | 0 | (1,390) | 0 | ||
Ceding commission | (723) | 0 | (723) | 0 | ||
Losses and loss adjustment expenses | (278) | 0 | (278) | 0 | ||
Total expenses | (1,001) | 0 | (1,001) | 0 | ||
Markel | Reinsurance Agreement | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Premiums receivable | 185,458 | 185,458 | 97,897 | |||
Commissions receivable | 584 | 584 | 0 | |||
Deferred acquisition costs, net | 135,769 | 135,769 | 103,869 | |||
Other current assets | 1,217 | 1,217 | 0 | |||
TOTAL ASSETS | 323,028 | 323,028 | 201,766 | |||
Accounts payable, accrued expenses and other current liabilities | 1,956 | 1,956 | 0 | |||
Losses payable and provision for unpaid losses and loss adjustment expenses | 163,833 | 163,833 | 160,236 | |||
Commissions payable | 98,331 | 98,331 | 75,898 | |||
Unearned premiums | 293,507 | 293,507 | 227,192 | |||
TOTAL LIABILITIES | 557,627 | 557,627 | $ 463,326 | |||
Earned premium | (130,610) | (89,738) | (243,972) | (175,428) | ||
Ceding commission | (59,419) | (43,415) | (113,177) | (84,303) | ||
Losses and loss adjustment expenses | (51,194) | (36,808) | (97,849) | (71,379) | ||
Total expenses | $ (110,613) | $ (80,223) | $ (211,026) | $ (155,682) |
Related-Party Transactions - Al
Related-Party Transactions - Alliance Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Commission revenue | $ 133,762 | $ 111,917 | $ 234,883 | $ 190,596 | |
Markel | Alliance Agreement | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Due to insurer | 116,411 | 116,411 | $ 64,873 | ||
Commission revenue | $ 100,737 | $ 86,716 | $ 172,376 | $ 146,252 | |
Markel | Alliance Agreement | Affiliated Entity | Due To Related Parties | Related Party Concentration Risk | |||||
Related Party Transaction [Line Items] | |||||
Percent of total | 91% | 95% | |||
Markel | Alliance Agreement | Affiliated Entity | Revenue from Contract with Customer Benchmark | Related Party Concentration Risk | |||||
Related Party Transaction [Line Items] | |||||
Percent of total | 93% | 93% | 95% | 94% |