Hagerty, a specialty insurance provider catering to the global automotive enthusiast market, has announced that it is raising $105 million from existing strategic investors. The investors include State Farm, Markel Group, and the Hagerty family.
This funding infusion comprises $80 million of convertible preferred equity, which was finalized on June 23, and an additional commitment of $25 million in long-term debt financing for Hagerty Reinsurance Limited.
The capital injection will play a crucial role in supporting Hagerty’s growth initiatives, which are primarily focused on serving the community of car enthusiasts, the company said. One key aspect involves enhancing the company’s risk appetite and core product to expand its offerings for existing members, as well as reaching out to new members.
The capital infusion will enable Hagerty to make strategic investments in technology, the company said. By leveraging technology, the company aims to improve operational efficiency and enhance customer interactions, ensuring a seamless and satisfying experience for its policyholders.
“We are pleased to continue to grow our investment in Hagerty and help support their strategic business objectives as we prepare for the upcoming launch of our commercial relationship,” said Michael Tipscord, chairman, president, and CEO of State Farm.
“Hagerty is an important partner for our insurance business, and we are excited to see them further expand their insurance offerings by finding new and innovative ways to serve automotive enthusiasts,” said Tom Gayner, CEO of Markel Group.
“We have been working diligently over the last six months to deliver improved profitability and margin expansion while making the investments necessary to sustain our growth trajectory for many years to come,” said McKell Hagerty, CEO of Hagerty. “We believe that the additional capital positions us well during uncertain economic times to execute against our significant growth opportunities.”
The cash infusion comes on the heels of Hagerty reporting a $15 million net loss in the first quarter of 2023. The company has launched a significant restructuring overhaul, including trimming its workforce.