Hagerty : Fourth Quarter 2023 Earnings Webcast Presentation

This presentation contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. These forward-looking statements reflect our current expectations and projections with respect to our expected future business and financial performance, including, among other things: (i) expected operating results, such as revenue growth and financial position; (ii) changes in the market for our products and services; (iii) our plans to expand market share, including planned investments and partnerships; (iv) anticipated business objectives; and (v) the strength of our business model. These statements may be preceded by, followed by, or include the words "anticipate," "believe," "envision," "estimate," "expect," "forecast," "future," "goal," "intend," "likely," "outlook," "plan," "potential," "project," "seek," "target," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning. A number of factors could cause actual results or outcomes to differ materially from those indicated by these forward-looking statements. These factors include, among other things, our ability to: (i) compete effectively within our industry and attract and retain members; (ii) maintain key strategic relationships with our insurance distribution and underwriting carrier partners; (iii) prevent, monitor and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages or other issues with our technology platforms or our (vi) manage the cyclical nature of the insurance

business, including through any periods of recession, economic downturn or inflation; (vii) address unexpected increases in the frequency or severity of claims; (viii) comply with the numerous laws and regulations applicable to our business, including state, federal, and foreign laws relating to insurance and rate increases, privacy, the internet and accounting matters; (ix) manage risks associated with being a controlled company; and (x) successfully defend any litigation, government inquiries and investigations. The forward-looking statements herein represent our judgment as of the date of this release and we disclaim any intent or obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. This presentation should be read in conjunction with the information included in our filings with the SEC and press releases. Understanding the information contained in these filings is important in order to fully understand our reported financial results and our business outlook for future periods. In addition, this presentation contains certain "non-GAAP financial measures". The non-GAAP measures are presented for supplemental informational purposes only. These financial measures are not recognized measures under GAAP and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP are provided in the appendix to this presentation.

		2023 OUTLOOK	2023 RESULTS
		(AS OF 3/14/2023)*
	Total Revenue Growth	22% - 26%	+27%
	Written Premium growth	11% - 13%	+17%
	Deliver an unmatched Marketplace experience	na	+109%
	Drive Membership revenue	na	+16%
	Significantly improve profitability:
	Net Income	$(20)M - $0M	$28M
	Adjusted EBITDA1	$40M - $60M	$88M

* Hagerty shared the initial 2023 Outlook on the fourth quarter 2022 earnings call on March 14, 2023. 1 See Appendix for additional information regarding this non-GAAP financial measure.

Total Revenue growth of 27%

Commission and Fee growth of 19%

Written Premium growth of 17%

• Added 254,000 new customers
• Launched State Farm partnership in four states
• Received financial strength rating of A- (Excellent) from AM Best

Marketplace growth of 109%

Significantly improved profitability

• Improved operating margin by 960 bps
• Net Income1 of $28 million compared to $2 million
• Adjusted EBITDA2 of $88 million compared to $(2) million

1. Net Income in the prior year period included a $35 million revaluation gain and a $42 million change in fair value of warrant liabilities.
2. See Appendix for additional information regarding this non-GAAP financial measure.

• Hagerty Marketplace was created by a proven leadership team to help consumers buy, sell, and finance collector cars.
• Provide an unmatched online and live Marketplace experience for consumers by serving as the trusted brand for auto enthusiasts, offering certification services, title and escrow, financing options and other high-value services that differentiate our product from competitors.
• Large and growing market opportunity with over 300,000 cars transacting for ~$14 billion through Hagerty's insurance book during 2023.
• During 2023, Marketplace delivered $29 million in revenue from live auctions, time-based online auctions, brokered private sales, as well as financing.
• Entered into revolving credit agreement with an aggregate borrowing capacity of $75 million for asset- based lending program.
• Other material opportunities include insurance sales and
  Hagerty Drivers Club (HDC) memberships.

• Began activating State Farm agents to offer State Farm Classic+ policies and Hagerty Drivers Club in four initial states in September of 2023
• 480,000+ existing collector car policies plus HDC enrollment possible on new insurance policies sold by
  State Farm's ~19,000 agents
• State Farm aligned in the success of the 10-year commercial partnership with an initial $500 million investment in Hagerty in 2021 as well as an additional $50 million investment in June of 2023 and $25 million long-term financing for Hagerty Re

Key 2024 business priorities include:

• Further improve loyalty to drive renewals and referrals
• Enhance member experience in a cost effective and efficient way
• Build Hagerty Marketplace into the most trusted and preferred place to buy, sell and finance collector cars
• Expand insurance offerings, particularly in the post-
  1980s collectible space

1 See Appendix for additional information regarding this non-GAAP measure.

Total Revenue

2023 Highlights

Commission + fee revenue (+19%)

• Written premium growth of 17%
• Policies in Force retention of 89%

Membership, marketplace + other revenue (+33%)

• Membership revenue growth of 16%
• Marketplace revenue growth of 109%
• 80% of new insurance customers joined
  Hagerty Drivers Club (HDC)

Earned premium in Hagerty Re (+32%)

» Contractual quota share2 increased to ~80% in 2023

1. Includes base commissions, payment plan fees and contingent underwriting commissions.
2. Currently applies to U.S. and U.K. programs. Generally described as an arrangement where underwriting risk and profit is shared proportionately.

		Net Income		Adjusted EBITDA

Adjusted EBITDA

IN THOUSANDS	Q4 2023	Q4 2022	YTD 2023	YTD 2022
Net income (loss)	$9,042	$(32,233)	$28,179	$2,403
Interest and other income	(7,144)	(2,403)	(22,821)	(2,028)
Income tax expense	4,591	2,940	16,593	7,017
Depreciation and amortization	10,916	9,550	45,809	33,887
EBITDA	$17,405	$(22,146)	$67,760	$41,279
Restructuring, impairment and related charges, net	(45)	18,324	8,812	18,324
Change in fair value of warrant liabilities	(12,962)	(4,030)	(11,543)	(41,899)
Share-based compensation expense	4,860	3,964	17,729	12,129
Losses and impairments related to divestitures	(99)	-	4,013	-
Revaluation gain previously held equity method investment	-	-	-	(34,735)
Net loss from asset disposals	-	1,970	-	1,970
Other unusual items1	554	(118)	1,391	992
Adjusted EBITDA2	$9,713	$(2,036)	$88,162	$(1,940)

1. Other unusual items primarily includes certain legal settlement expenses (net) recognized in the three months ended and year ended December 31, 2023 and 2022, as well as certain non-restructuring severance expenses recognized in the year ended December 31, 2022.
2. See Appendix for additional information regarding this non-GAAP financial measure.