Hagerty, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Hagerty, Inc. has filed its 2023 annual report (10-K) detailing financial performance and operational highlights, including a recent acquisition.</b>

AI Summary

Hagerty, Inc. (HGTY) filed a Annual Report (10-K) with the SEC on March 12, 2024. Hagerty, Inc. filed its 2023 Form 10-K on March 12, 2024, reporting on the fiscal year ending December 31, 2023. The filing covers the company's financial performance and business operations for the fiscal year 2023. Key financial data and operational details are presented for the period. The report includes information on various warrant types, including Private Placement, Underwriter, OTM, and PIPE warrants, with associated measurement inputs for the year ended December 31, 2023. A subsequent event noted is the acquisition of Consolidated National Insurance Company (CNIC) on January 12, 2024.

Why It Matters

For investors and stakeholders tracking Hagerty, Inc., this filing contains several important signals. This 10-K filing provides investors with a comprehensive overview of Hagerty's financial health, strategic initiatives, and risk factors for the fiscal year 2023, enabling informed investment decisions. The inclusion of detailed warrant information and a significant subsequent event (CNIC acquisition) offers insights into potential future dilution and strategic growth avenues for the company.

Risk Assessment

Risk Level: medium — Hagerty, Inc. shows moderate risk based on this filing. The company's business is subject to various risks and uncertainties, including those related to the insurance industry, market conditions, and regulatory changes, as detailed in the risk factors section of the 10-K.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to assess Hagerty's performance and future outlook.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period for the 10-K)
• 2024-03-12 — Filing Date (Date the 10-K was filed)
• 2024-01-12 — CNIC Acquisition Date (Subsequent event)

Key Players & Entities

• Hagerty, Inc. (company) — Filer of the 10-K report
• Aldel Financial Inc. (company) — Former company name
• Consolidated National Insurance Company CNIC (company) — Acquired entity in a subsequent event

FAQ

Risk Factors

• Regulatory Environment [medium — regulatory]: The company's operations are subject to extensive regulation by state and federal authorities, which can impact business practices and profitability.
• Market and Economic Conditions [medium — market]: Adverse changes in market and economic conditions, including interest rate fluctuations and inflation, could negatively affect the company's financial results.
• Operational Risks [medium — operational]: The company faces operational risks, including cybersecurity threats and the potential for system failures, which could disrupt services and harm reputation.
• Financial Risks [medium — financial]: The company is exposed to financial risks such as credit risk, liquidity risk, and the potential impact of accounting estimates and judgments.

Key Dates

• 2023-12-31: Fiscal Year End — Defines the reporting period for the 2023 10-K.
• 2024-03-12: 10-K Filing Date — Official filing date of the annual report.
• 2024-01-12: Acquisition of CNIC — Significant subsequent event impacting the company's structure and operations.

Key Financial Figures

• $0.0001 — stered Class A common stock, par value $0.0001 per share HGTY The New York Stock Excha
• $11.50 — mon stock, each at an exercise price of $11.50 per share HGTY.WS The New York Stock Ex
• $9.36 — 30, 2023, based on the closing price of $9.36 for shares of the Registrant's Class A
• $18 billion — te that the U.S. market translates into $18 billion of annual premium for insurable collect
• $381 — verage vehicle premium of approximately $381 per year. Over the last decade, we have
• $20.0 million — paid Hagerty an advanced commission of $20.0 million in 2020, which is being recognized as "

Filing Documents

• hgty-20231231.htm (10-K) — 3345KB
• hgty-20240312_ex46.htm (EX-4.6) — 71KB
• hgty-20240312xex1033.htm (EX-10.33) — 25KB
• hgty-20240312xex1034.htm (EX-10.34) — 26KB
• hgty-20240312_ex191.htm (EX-19.1) — 80KB
• hgty-20240312xex211.htm (EX-21.1) — 51KB
• hgty-20240312xex231.htm (EX-23.1) — 2KB
• hgty_12312023xex311.htm (EX-31.1) — 10KB
• hgty_12312023xexh312.htm (EX-31.2) — 10KB
• hgty_12312023xexh321.htm (EX-32.1) — 5KB
• hgty_12312023xexh322.htm (EX-32.2) — 5KB
• hgty-20240312_ex971.htm (EX-97.1) — 26KB
• hgty-20231231_g1.jpg (GRAPHIC) — 295KB
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• hgty-20240312xex1034007.jpg (GRAPHIC) — 191KB
• hgty-20240312xex1034008.jpg (GRAPHIC) — 209KB
• hgty-20240312xex1034009.jpg (GRAPHIC) — 151KB
• image_0.jpg (GRAPHIC) — 27KB
• image_1.jpg (GRAPHIC) — 21KB
• 0001840776-24-000022.txt (&nbsp;) — 24381KB
• hgty-20231231.xsd (EX-101.SCH) — 103KB
• hgty-20231231_cal.xml (EX-101.CAL) — 170KB
• hgty-20231231_def.xml (EX-101.DEF) — 782KB
• hgty-20231231_lab.xml (EX-101.LAB) — 1270KB
• hgty-20231231_pre.xml (EX-101.PRE) — 1096KB
• hgty-20231231_htm.xml (XML) — 2960KB

RISK FACTORS

ITEM 1A. RISK FACTORS 13

UNRESOLVED STAFF COMMENTS

ITEM 1B. UNRESOLVED STAFF COMMENTS 42

CYBERSECURITY

ITEM 1C. CYBERSECURITY 42

PROPERTIES

ITEM 2. PROPERTIES 43

LEGAL PROCEEDINGS

ITEM 3. LEGAL PROCEEDINGS 43

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES 43 PART II 43

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 43

[ Reserved ]

ITEM 6. [ Reserved ] 45

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 45

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 67

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 68

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES 128

CONTROLS AND PROCEDURES

ITEM 9A. CONTROLS AND PROCEDURES 128

OTHER INFORMATION

ITEM 9B. OTHER INFORMATION 129

DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS 129 PART III 129

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 129

EXECUTIVE COMPENSATION

ITEM 11. EXECUTIVE COMPENSATION 129

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 129

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 130

PRINCIPAL ACCOUNTING FEES AND SERVICES

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 130 PART IV 131

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 131

FORM 10-K SUMMARY

ITEM 16. FORM 10-K SUMMARY 134

Signatures

Signatures 135 3 TABLE OF CONTENTS Where You Can Find More Information In this Annual Report on Form 10-K (this "Annual Report"), "we," "our," "us," "Hagerty," "HGTY," and the "Company" refer to Hagerty, Inc., formerly known as Aldel Financial Inc. ("Aldel"), and its consolidated subsidiaries including The Hagerty Group, LLC ("The Hagerty Group"), unless the context requires otherwise. We file annual, quarterly, and current reports, proxy statements and other information with the United States Securities and Exchange Commission (the "SEC"). General information about us can be found at investor.hagerty.com. Our Annual Report, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as any amendments to those reports, are available free of charge through our website at investor.hagerty.com as soon as reasonably practicable after we file them with, or furnish them to, the SEC. The SEC also maintains a website at www.sec.gov that contains reports, proxy statements, and other information regarding SEC registrants, including Hagerty, Inc. We use our investor relations website, investor.hagerty.com, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media channels. Information contained on or accessible through, including any reports available on, our website or social media channels is not a part of, and is not incorporated by reference into, this Annual Report or any other report or document we file with the SEC. Any reference to our website in this Form 10-K is intended to be an inactive textual reference only. 4 TABLE OF CONTENTS Cautionary Statement Regarding Forward-Looking Statements This Annual Report, as well as information included in oral statements or o

: BUSINESS

ITEM 1: BUSINESS Company Overview We are a market leader in providing insurance for classic cars and enthusiast vehicles. Through our insurance model, we act as a Managing General Agent ("MGA") by underwriting, selling and servicing classic car and enthusiast vehicle insurance policies. Then, due to our consistent track record of delivering strong underwriting results, we reinsure a large portion of the risks written by our MGA subsidiaries through our wholly owned subsidiary, Hagerty Reinsurance Limited ("Hagerty Re"). In addition, we offer Hagerty Drivers Club ("HDC") memberships, which can be bundled with our insurance policies and give subscribers access to an array of products and services, including Hagerty Drivers Club Magazine, automotive enthusiast events, our proprietary vehicle valuation tool, emergency roadside assistance, and special vehicle-related discounts. Lastly, to complement our insurance and membership offerings, we also offer Hagerty Marketplace ("Marketplace"), where car enthusiasts can buy, sell, and finance collector cars. Through these offerings, our goal is to be the world's most trusted and preferred brand for enthusiasts to protect, buy and sell, and enjoy the special cars that are their passion. The backbone of our ecosystem is our fast-growing insurance business. People take excellent care of the things they love, and we take great pride in protecting and preserving their treasured vehicles. For almost 40 years, we have consistently grown our insurance business and currently insure approximately 2.4 million classic cars and enthusiast vehicles. We have built a strong reputation for providing excellent customer service through our passionate member service center, resulting in a Net Promoter Score ("NPS") of at least 82 in recent years, an insurance policy retention rate close to 90%, and a typical policy life of approximately nine years. HDC and Marketplace, as well as our media and entertainment platforms, work synergistically

View Full Filing

View this 10-K filing on SEC EDGAR