About The Hanover The Hanover Insurance Group, Inc. is the holding company for several property and casualty insurance companies, which together constitute one of the largest insurance businesses in the United States. The company provides exceptional insurance solutions through a select group of independent agents and brokers. Together with its agent partners, The Hanover offers standard and specialized insurance protection for small and mid- sized businesses, as well as for homes, automobiles, and other pe ...

Core Viewpoint - Broad Arrow Auctions, a subsidiary of Hagerty, is set to host a significant BMW-only auction as part of the prestigious Concorso d'Eleganza Villa d'Este, showcasing exceptional collector cars from BMW's history [1][2][9]. Company Overview - Broad Arrow Auctions is recognized as a leading global collector car auction house, founded in 2021 by industry veterans, and is expanding its presence in Europe with its inaugural auction in May 2025 [17]. - The company has established itself as the fastest-growing auction house in its segment, with flagship events in California and Florida, and is now the official auction partner for the Concorso d'Eleganza Villa d'Este [17]. Auction Details - The BMW-only auction will take place on the evening of May 24, 2025, featuring a selection of iconic BMW models spanning nearly 70 years of production [2][9]. - The auction will include 70 of the world's finest automobiles, enhancing the prestige of the Concorso event [9][14]. Featured Cars - Notable cars include: - **1958 BMW 507 Series II Roadster**: Estimated value between €2,000,000 and €2,300,000, known for its exceptional originality and history of ownership [4][5]. - **1980 BMW M1**: Estimated value between €450,000 and €550,000, recognized for its racing heritage and limited production [6][7]. - **2000 BMW Z8**: Estimated value between €200,000 and €225,000, combining retro design with modern performance [11][12]. - **1981 BMW M1**: Estimated value between €475,000 and €575,000, previously owned by notable figures and showcasing a rich history [13][14]. Market Position - The auction is positioned as a premium experience for collectors and enthusiasts, reflecting the high demand and value associated with rare and historically significant automobiles [14].

Core Insights - Broad Arrow Auctions, a subsidiary of Hagerty, is set to host a significant BMW-only auction as part of the Concorso d'Eleganza Villa d'Este, highlighting BMW's legacy in the automotive world [2][9][14] Auction Details - The BMW-only auction will take place on May 24, 2025, during a two-day event at Villa Erba, Italy, featuring 70 of the world's finest automobiles [9][14] - The auction aims to celebrate BMW's heritage, showcasing both classic and modern collector cars, including iconic motorsport models [3][9] Featured Cars - The auction will include notable models such as: - **1958 BMW 507 Series II Roadster** with an estimated value of €2,000,000 - €2,300,000, known for its exceptional originality and history of ownership [4][5] - **1980 BMW M1** estimated at €450,000 - €550,000, recognized for its racing pedigree and limited production of only 453 units [6][9] - **2000 BMW Z8** estimated at €200,000 - €225,000, combining retro design with modern performance, featuring a 4.9-litre V8 engine [11][12] - **1981 BMW M1** estimated at €475,000 - €575,000, previously owned by Vijay Mallya, showcasing its unique history and modifications [13][14] Company Background - Broad Arrow Auctions, founded in 2021, has quickly established itself as a leading global collector car auction house, expanding its presence in Europe with this inaugural auction [17] - The company is recognized for offering high-quality collector cars and aims to enhance the auction experience during prestigious events like the Concorso d'Eleganza Villa d'Este [14][17]

Core Insights - Broad Arrow Auctions, a subsidiary of Hagerty, is set to host its inaugural Concorso d'Eleganza Villa d'Este Auction on May 24-25, 2025, featuring historically significant motorsport models [1][2][16] - The auction will showcase up to 70 high-quality collector cars, including classic and modern supercars, with a focus on vehicles that have made a mark in motorsport history [2][10] Auction Highlights - Featured cars include: - **1990 Citroën ZX Rallye Raid**: Estimated at €475,000 - €525,000, this car has a notable history in the Paris-Dakar Rally, finishing sixth in 1991 and contributing to Citroën Sport's FIA World Cup victory [3][4][5] - **1936 Fiat 570 Bertone Barchetta Special**: Estimated at €325,000 - €375,000, this car marks the beginning of Nuccio Bertone's design legacy and has a rich racing history, including participation in the Mille Miglia [7][9] - **1966 Fiat Abarth OT 1300**: Estimated at €400,000 - €450,000, this car is recognized for its performance in the Targa Florio, having won its class on its debut [11][12] - **1965 Elva BMW Mk 8**: Estimated at €175,000 - €225,000, this car has a strong racing pedigree and will compete at the 2025 Goodwood Members Meeting before the auction [13][10] Company Background - Broad Arrow Auctions is a leading global collector car auction house, founded in 2021, and has quickly established itself as a prominent player in the market [16] - The company is expanding its global presence, with the upcoming auction in Italy marking its first event in Europe as the official auction house for the Concorso d'Eleganza Villa d'Este [16][18]

Core Viewpoint - Broad Arrow Auctions, a subsidiary of Hagerty, is set to host its inaugural Concorso d'Eleganza Villa d'Este Auction on May 24-25, 2025, featuring historically significant motorsport models [1][2]. Auction Details - The auction will take place on the shores of Lake Como, in partnership with BMW AG, showcasing up to 70 high-quality collector cars [2]. - The auction will include a diverse range of vehicles, from coachbuilt classics to modern supercars, highlighting significant motorsport legends [2]. Featured Cars - **1990 Citroën ZX Rallye Raid**: Estimated between €475,000 and €525,000, this car has a notable history in the Paris-Dakar Rally, finishing sixth in 1991 and contributing to Citroën Sport's FIA World Cup victory [3][4][5]. - **1936 Fiat 570 Bertone Barchetta Special**: Estimated between €325,000 and €375,000, this car marks the beginning of Nuccio Bertone's design career and has a rich racing history, including participation in the Mille Miglia [7][8][9]. - **1966 Fiat Abarth OT 1300**: Estimated between €400,000 and €450,000, this car is recognized for its performance in the Targa Florio and has a storied motorsport pedigree [11][12]. - **1965 Elva BMW Mk 8**: Estimated between €175,000 and €225,000, this car has competed in notable races and will participate in the 2025 Goodwood Members Meeting before the auction [13]. Company Background - Broad Arrow Auctions, founded in 2021, is a rapidly growing global collector car auction house, known for its high-quality offerings and flagship events in the U.S. [16][17]. - The company is expanding its presence in Europe with this auction, further solidifying its position in the collector car market [17].

Core Insights - The 30th Annual Amelia Concours d'Elegance showcased over 240 historically significant automobiles, with the 1938 Alfa Romeo 8C 2900 winning Best of Show in the Concours d'Elegance category and the 1967 Lotus 49 winning Best of Show in the Concours de Sport category [1][2][3] Event Highlights - The event took place from March 6-8, 2025, at The Ritz-Carlton, Amelia Island, Florida, attracting thousands of automotive enthusiasts and featuring a tribute to racing icon Hélio Castroneves [4][12] - The weekend included various activities such as fine dining, driving experiences, live auctions, and a showcase of automotive history [1][4] Auction Performance - Broad Arrow Auctions, the official auction of The Amelia, achieved $61.7 million in total sales with 88% of lots sold, marking a successful event [8][9] - The top sale was a 1959 Ferrari 250 GT LWB California Spider Competizione, which sold for $9,465,000, making it the most valuable car sold by Broad Arrow to date [8][9][14] Attendance and Community Impact - The event welcomed 17,000 attendees and pledged $119,000 to local nonprofits, highlighting its community engagement [6] - Over 500 volunteers contributed to the event, showcasing strong community support [6] Future Events - The next Amelia event is scheduled for March 5-8, 2026, and car enthusiasts are invited to the Greenwich Concours from May 30 to June 1, 2025 [7]

Core Insights - Broad Arrow Auctions, a Hagerty company, achieved $61.7 million in total sales during its third annual Amelia Auction, with 88 percent of all lots sold [1] - The auction saw a 22 percent increase in bidder registrations compared to the previous year, with 60 percent of bidders attending in person [1] - The top sale was a 1959 Ferrari 250 GT LWB California Spider Competizione, which sold for $9,465,000, making it the most valuable car ever sold by Broad Arrow [2][3] Auction Performance - The auction took place on March 7 and 8, 2025, at the Ritz-Carlton Amelia Island, with a well-attended preview leading to high engagement during the auction [1] - Over 15,000 viewers watched the auction on Broad Arrow's YouTube channel, with millions more tuning in via Hagerty's Samsung TV Plus and Tubi channels [1] - The auction featured spirited bidding across all categories, indicating a strong demand for high-quality collector cars [3] Notable Sales - The top 10 sales included iconic models such as the 1971 Lamborghini Miura P400 SV, which sold for $4,460,000, and the 2018 Pagani Huayra Roadster, which sold for $3,415,000 [4] - Other notable sales included a 1954 Jaguar D-Type for $4,295,000 and a 1990 Ferrari F40 for $3,665,000, showcasing a diverse range of high-value vehicles [4] Upcoming Events - Broad Arrow's next auction is the Porsche Air|Water Auction scheduled for April 26, 2025, featuring approximately 50 desirable Porsches [5] - The auction house will also host a Spring Memorabilia Online Auction from April 21 to May 4, 2025, focusing on motorsport memorabilia [4]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 grew 19% to $292 million, with written premiums increasing by 13% and commission and fee revenue rising 15% to $89 million [22][24] - Full year revenue increased by $412 million, operating income rose by $134 million, and operating cash flow tripled to $177 million [8][30] - Full year net income reached $78 million, a 178% increase, with adjusted earnings per share at $0.24 [29][30] Business Line Data and Key Metrics Changes - Membership, marketplace, and other revenue surged 68% to $34 million, driven by marketplace inventory sales [22] - Commission and fee revenue for the full year jumped 16%, while earned premium for Hagerty Reinsurance increased by 21% [27][29] - Operating income for 2024 increased to $66 million, with operating margins expanding by 450 basis points [28] Market Data and Key Metrics Changes - The company currently holds a 5% share of the 48 million collectible car market in the US, with a retention rate climbing to 89% in 2024 [11][34] - The marketplace for vehicles bought and sold by members reached $15.7 billion, up 10% from 2023 [16] Company Strategy and Development Direction - The company aims to expand specialty insurance offerings, simplify membership experiences, and grow its marketplace business [14][15] - A significant technology transformation is underway to transition to a modern cloud-based architecture, expected to enhance efficiency and scalability [19][20] - The company plans to double its policies enforced to three million by 2030, leveraging partnerships and new product offerings [21][37] Management's Comments on Operating Environment and Future Outlook - Management anticipates strong results in 2025, projecting 12% to 13% total revenue growth and 30% to 40% net income gains [34][37] - The company acknowledges potential inflationary effects from tariffs but expects a gradual impact due to its diverse supply chain [50][62] - Management remains optimistic about customer engagement and retention, with a focus on leveraging the Hagerty Drivers Club for cross-selling opportunities [45][48] Other Important Information - The company ended December 2024 with an unrestricted cash balance of $105 million, equal to its long-term debt [33] - The company has successfully renegotiated reinsurance terms for 2025, maintaining similar coverage at a lower cost despite a challenging hurricane season [32] Q&A Session Summary Question: Trends in cross-sell or cross-engagement between insurance, membership, and marketplace - Management noted that 80% of insurance customers also purchase the Hagerty Drivers Club membership, which drives engagement and retention [45][48] Question: Impact of tariffs on the business - Management indicated that while there may be an inflationary effect from tariffs, the impact would be gradual and less pronounced due to the fragmented supply chain [50][62] Question: Any slowdown in shopping behavior from consumers - Management confirmed that shopping behavior is seasonal, with a ramp-up expected in the coming months, and noted that recent events like wildfires may dampen activity temporarily [56][58] Question: Expense savings and tech migration - Management clarified that elevated expenses are expected to continue due to ongoing investments in technology and staffing for growth initiatives [67][70] Question: Drivers of strong growth and doubling policy count - Management highlighted the transition of State Farm vehicles to their program and the introduction of new products like Enthusiast Plus as key growth drivers [75][79]

Financial Performance - In 2024, the company reported Net Income of $78.3 million, a 177.9% increase compared to 2023, and Adjusted EBITDA of $124.5 million, a 41.2% increase compared to 2023[252]. - The company experienced a 20.0% increase in Total Revenue, reaching $1,200.0 million in 2024 compared to $1,000.2 million in 2023[255]. - Adjusted Earnings Per Share increased to $0.24 in 2024, a 500.0% increase from $0.04 in 2023[255]. - Operating income for 2024 was $66.4 million, a significant increase of $56.0 million, or 538.1%, compared to 2023[277]. - Net income for the year was $78.3 million, reflecting a substantial increase of $50.1 million, or 177.9%, from the previous year[277]. - Total revenue for the year ended December 31, 2024, was $1,200.0 million, an increase of $199.8 million, or 20.0%, compared to 2023[277]. - Consolidated net income for 2024 is $78.3 million, up from $28.2 million in 2023, indicating strong growth in profitability[368]. Revenue Sources - Total Written Premium reached $1,044.5 million in 2024, reflecting a 15.1% increase from $907.2 million in 2023[255]. - Commission and fee revenue increased to $423.2 million, up $57.7 million, or 15.8%, driven by a 16.2% increase in renewal policy premiums and a 13.4% increase in new policy premiums[278][279]. - Membership, marketplace, and other revenue reached $133.5 million, an increase of $30.6 million, or 29.8%, compared to 2023[284]. - Marketplace revenue surged to $54.3 million, a 90.1% increase, attributed to higher inventory sales and improved auction results[286]. Expenses and Loss Ratios - Total operating expenses were $1,133.6 million, an increase of $143.8 million, or 14.5%, with losses and loss adjustment expenses rising by 35.3% to $298.6 million[277]. - The Hagerty Re Loss Ratio increased to 46.4% in 2024 from 41.5% in 2023, while the Combined Ratio rose to 94.1% from 89.2%[255]. - Losses and loss adjustment expenses rose to $298.6 million, an increase of $77.9 million or 35.3% compared to 2023, driven by estimated losses from Hurricanes Helene and Milton[290]. - The loss ratio for 2024 was 46.4%, up from 41.5% in 2023, with catastrophe losses contributing 5.6% in 2024 compared to 1.2% in 2023[291]. Cash Flow and Investments - Net cash provided by operating activities for the year ended December 31, 2024 was $177.0 million, an increase of $43.3 million, or 32.4%, compared to 2023[326]. - Cash used in investing activities increased by $565.9 million in 2024, primarily due to diversification of the investment portfolio and the acquisition of Drivers Edge for $11.3 million[328]. - Cash used in financing activities included a reduction of outstanding borrowings by $28.8 million and a cash dividend payment of $5.6 million on Series A Convertible Preferred Stock[329]. - The company reported a net cash used in investing activities of $618,564,000 in 2024, a substantial increase from $52,647,000 in 2023[400]. Assets and Liabilities - Total assets increased to $1,709,338, up from $1,588,212 in 2023, indicating growth in the company's asset base[392]. - Total liabilities slightly increased to $1,101,169 from $1,094,867 in 2023, showing stable financial management[392]. - The total provision for unpaid losses and loss adjustment expenses as of December 31, 2024 was $168.5 million, compared to $136.5 million in 2023, reflecting an increase of $32.0 million[337]. - Outstanding losses reported as of December 31, 2024 were $99.3 million, which is 58.9% of the total provision, compared to $86.4 million or 63.3% in 2023[337]. Tax and Deferred Assets - The effective income tax rate decreased to 17% in 2024 from 37% in 2023, with income tax expense at $15.4 million, down $1.2 million or 7.3%[302][303]. - As of December 31, 2024, the company recorded deferred tax assets of $193.6 million, with $148.1 million related to the difference between the outside tax basis and book basis of its investment in THG[345]. - A valuation allowance of $176.2 million was recorded against deferred tax assets as of December 31, 2024, indicating management's belief that certain deferred tax assets may not be realized[345]. - The company anticipates a reasonable possibility of reversing a significant portion of the valuation allowance against U.S. deferred tax assets within the next twelve months[346]. Shareholder Equity - Total stockholders' equity increased to $523.506 million as of December 31, 2024, up from $410.509 million in 2023, representing a growth of approximately 27.5%[393]. - The additional paid-in capital rose to $603.780 million in 2024, up from $561.754 million in 2023, marking an increase of about 7.5%[393]. - The company reported an accretion of Series A Convertible Preferred Stock amounting to $7.427 million for the year 2024[393]. - The total accumulated earnings (deficit) improved to $(451.978) million in 2024 from $(468.995) million in 2023, indicating a reduction in the deficit by approximately 3.6%[393]. Goodwill and Intangible Assets - The company recorded goodwill of $114.1 million and intangible assets of $90.1 million as of December 31, 2024[356]. - Goodwill represents the excess cost of a business combination over the fair value of net assets acquired and is tested annually for impairment[446]. - Intangible assets are recorded at cost and amortized over 3 to 25 years, depending on the type of asset[445]. - Non-compete agreements and customer relationships are part of the intangible assets amortized over their estimated life[445].

Group 1: Earnings Performance - Hagerty, Inc. reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, compared to a loss of $0.01 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $291.73 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.77%, and compared to year-ago revenues of $245.04 million [2] - Over the last four quarters, Hagerty has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Hagerty shares have increased approximately 3.7% since the beginning of the year, while the S&P 500 has declined by 0.5% [3] - The current consensus EPS estimate for the coming quarter is $0.06 on revenues of $305.21 million, and for the current fiscal year, it is $0.36 on revenues of $1.36 billion [7] - The estimate revisions trend for Hagerty is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Group 3: Industry Context - The Automotive - Retail and Wholesale - Parts industry, to which Hagerty belongs, is currently in the top 24% of over 250 Zacks industries, suggesting a positive outlook for the sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]