Car enthusiasts wake up in the morning wondering how they can protect their car, enhance their automotive knowledge and spend more time with other car enthusiasts.
“That’s incredibly powerful,” McKeel Hagerty, CEO of collector car insurance provider Hagerty, said Thursday (March 24) during the company’s first earnings call as a public company. “People generally spend discretionary income on things that bring them joy.”
Read more: Hagerty IPO Shows Value of Membership Model in Insuring Collectible Cars
In fact, car collectors spend an average of $13,000 on their hobby annually, the company reported in a presentation that accompanied the call. The collector car world is large, too, with 43 million vehicles in the United States being eligible as insurable collectible vehicles.
Building an Ecosystem Around Collector Cars
While insurance accounts for 92% of the company’s revenue, Hagerty has built a growing ecosystem that also includes automotive events, driving experiences, media content and a membership organization — all designed to boost the company’s engagement with members.
“People grow attached to these objects called ‘automobiles’ — freedom, self-expression, fun, competition, status, community, friends and groups,” Hagerty said.
During the call, company executives gave updates on the three latest additions to this ecosystem.
First, a partnership with State Farm that is to begin later this year. This will become the largest of the partnerships Hagerty has with other companies in which it handles the special insurance needs of the owners of collector cars, including valuation, specialty coverage and the handling of unique claims.
“We value all of these partnerships, and we treat them individually with no cross-selling of products and services, so that they know their core books of business are well protected, while the enthusiast cars are handled by a market leader in Hagerty,” Hagerty said.
Second, a move into an automotive marketplace in a joint venture with Broad Arrow Group, a new company made up of veterans from the auto auctions industry. Hagerty said during the call that Hagerty insurance customers bought and sold $9.5 billion in vehicles in 2021.
“Our intention is to use our data advantages and our partnership with Broad Arrow to develop buying and selling tools and experiences that focus on trust, integrity and transparency,” Hagerty said.
Reaching Out to the Next Generation of Enthusiasts
Third, a partnership with Polyphony Studios to be embedded in the video game Gran Turismo 7, the latest version of the best-selling game on the Sony PlayStation platform. Hagerty said this is a way to engage the next generation.
“This is exciting because of the reach implied by the millions of active users on such platforms, but also because it is our first foray into the interactive gaming world,” Hagerty said.
Looking ahead, Hagerty said he expects the car hobby will continue to thrive into the age of electric vehicles, particularly among the EV models with higher performance and aspirational designs.
“Our world of enthusiast vehicles is large and has many areas of interest, and we view our roles as stewards — stewards of driving, automotive competition and the joy of owning something fun to drive,” Hagerty said.