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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related Notes included in Item 8 of Part II of this Annual Report, including Note 4 — Segment Reporting and Disaggregated Revenue. Beginning with this Annual Report, our Consolidated Financial Statements are presented in accordance with Article 7 of Regulation S-X and reflect our new Insurance and Marketplace segments. This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") contains forward-looking statements based upon current expectations that involve risks and uncertainties. Please refer to the section in this Annual Report entitled "Cautionary Statement Regarding Forward-Looking Statements".

The following discussion contains references to the years ended December 31, 2025 and 2024. A discussion of the Company's results of operations comparing results for the years ended December 31, 2024 and 2023 is included under the section entitled "Results of Operations" in Item 7 of Part II of the Annual Report on Form 10-K for the year ended December 31, 2024, and is incorporated by reference into this Annual Report.

Overview

We are a market leader in providing insurance for collector cars and enthusiast vehicles, helping the automotive enthusiast community protect and enjoy their special cars for more than 40 years. Our insurance products are complemented by HDC, our renowned car events, and our media and entertainment platforms. We also operate a trusted marketplace where collectors and enthusiasts can buy and sell a wide range of vehicles, from entry level enthusiast vehicles to high value collector cars, primarily though Broad Arrow live auctions and brokered private sales. In addition, through our marketplace, BAC provides financing solutions by structuring loans secured by collector cars. Together, our integrated automotive ecosystem fosters a vibrant community where enthusiasts connect, share their passion, and access resources that enhance their ownership experience. Our vision is to be the world's most trusted and preferred brand for automotive enthusiasts to insure, buy, sell, and enjoy their special cars.

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Reportable Segments

Due to the continued revenue growth and recent geographic expansion of the marketplace business, beginning in the fourth quarter of 2025, we updated our segment reporting to reflect two operating and reportable segments: Insurance and Marketplace. Previously, we operated as a single operating and reportable segment. We have recast prior period segment information to conform to the current presentation in this Annual Report. For more information regarding segment reporting, refer to Note 4 — Segment Reporting and Disaggregated Revenue in Item 8 of Part II of this Annual Report.

Transition to Article 7 Reporting Framework

Beginning with this Annual Report, we present our Consolidated Financial Statements in accordance with Article 7 of Regulation S-X ("Article 7"), which governs financial reporting for insurance companies. In prior reporting periods, we presented our Consolidated Financial Statements in accordance with Article 5 of Regulation S-X ("Article 5"), which is applicable to entities operating in non-specialized industries. The adoption of Article 7 reflects the continued expansion of our insurance operations, including expanded risk assumption under the Markel Fronting Arrangement and the introduction of our Enthusiast+ product.

Investors should note that the transition to Article 7 results in presentation differences that may affect comparability when compared to the financial statements presented in prior SEC filings, including the discontinuation of a classified balance sheet and the reclassification of certain line items on the Consolidated Balance Sheets. In addition, "Net investment income" and "Net investment gains" are now reported as components of revenue within the Consolidated Statements of Operations. Prior period information has been recast in this Annual Report to conform to the requirements of Article 7.

Recent Developments

On December 31, 2025, we entered into new contractual arrangements and amended the terms of our existing contractual arrangements with Markel and its affiliates. These coordinated transactions form the Markel Fronting Arrangement, which became effective January 1, 2026. Under the Markel Fronting Arrangement: (i) we continue to issue policies through Essentia, with our underwriting authority (including pricing decisions, rate filing, insurance rating, and risk selections) and claims authority expanded to the maximum levels permitted by applicable law; (ii) we have assumed increased administrative responsibilities for the policies issued through Essentia; (iii) Hagerty Re controls 100% of the premium and assumes 100% of the risk for policies written through Essentia; and (iv) Hagerty Re pays an initial fronting fee, representing 2% of written premium, to Markel for administrative support, which incrementally decreases based on the level of written premium in each calendar year. We expect these changes to result in increased profitability and additional control, allowing for enhanced operational efficiencies.

Due to the expanded underwriting and claims authority granted to us under the Markel Fronting Arrangement, we now control the Markel book of business. While our U.S. MGA subsidiary and Hagerty Re will continue to operate in the same manner they have historically, beginning on January 1, 2026, the benefit of our MGA services will be received by Hagerty Re and not Markel. As a result, effective in the first quarter of 2026, we will not recognize commission revenue or the associated ceding commission expense for policies issued through the Markel Fronting Arrangement in our Consolidated Financial Statements. However, ceding commissions associated with Markel policies issued in 2025 will continue to be recognized as expense ratably over the remaining term of those policies throughout 2026. In addition, policy acquisition costs incurred by our U.S. MGA subsidiary for Markel policies issued in 2026 will be deferred and amortized over the policy term. Although we expect the Markel Fronting Arrangement to result in increased profitability, our reported commission revenue and policy acquisition costs, including ceding commission expense, will be lower than in prior periods, reflecting the new contractual terms governing our relationship with Markel.

Components of Our Results of Operations

Revenue

Commission and fee revenue

We generate commission and fee revenue through our MGA subsidiaries, primarily from the underwriting, sale, and servicing of collector car and enthusiast vehicle insurance policies on behalf of our insurance carrier partners. Commissions are earned for both new and renewed policies. Commission and fee revenue is earned when the policy becomes effective, net of allowances for policy changes and cancellations.

Under the terms of our contracts with certain insurance carrier partners, we have the opportunity to earn a contingent underwriting commission based on the results of the book of business, including the level of written or earned premium and loss ratio. CUCs are recognized in the period that the policy is issued based on our estimate of the commission we will become entitled to receive such that a significant reversal of revenue is not probable.

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Earned premium, net

Earned premium, net represents the earned portion of written premiums that Hagerty Re has assumed under quota share reinsurance agreements with our insurance carrier partners, net of premiums ceded to various reinsurers. Premiums assumed and ceded are recognized on a pro-rata basis over the term of the reinsured policies, which is generally 12 months.

Membership and other revenue

We earn subscription revenue from the sale of HDC memberships, which are bundled with our insurance policies and give members access to an array of products and services, including emergency roadside assistance, Hagerty Drivers Club Magazine, special access to automotive enthusiast events, our proprietary vehicle valuation tool, and special vehicle-related discounts. Revenue from the sale of HDC memberships is recognized ratably over the period of the membership. The membership is treated as a single performance obligation to provide access to stated Member benefits over the life of the membership, which is currently one year.

Other revenue also includes sponsorship, admission, advertising, valuation, registration, and sublease income. Other revenue is recognized when the performance obligation for the related product or service is satisfied.

Net investment income

Net investment income primarily consists of interest earned on our cash, cash equivalents, and fixed maturity securities, and, to a lesser extent, dividends earned from equity securities. Net investment income is recorded net of related investment management expenses. The principal factors that influence net investment income are the size, composition, and yield of our investment portfolio.

Net investment gains

Net investment gains represents the cumulative difference between the cost basis (or carrying value) and the net proceeds received from the sale of investments during the period, as well as the change in fair value of our equity securities between periods.

Marketplace revenue

Our marketplace business earns commission and fee-based revenue primarily from the sale of collector cars and enthusiast vehicles through live auctions, time-based digital auctions, and brokered private sales. Through our marketplace business, we also earn revenue from the sale of collector cars and enthusiast vehicles that we have opportunistically acquired for resale. In addition, we earn finance revenue from loans made to qualified collectors and businesses secured by their collector cars.

Commission and fee-based marketplace revenue is recognized on a net basis when the underlying sale is completed, which is generally upon the matching of a seller and buyer in a legally binding sale transaction. Revenue from the sale of acquired collector cars and enthusiast vehicles is recognized on a gross basis at the point in time when title and control of the vehicle is transferred to the buyer, which is generally upon collection of the full purchase price. Finance revenue is recognized over time as earned based on the amount of the outstanding loan, the applicable interest rate on the loan, and the length of time the loan was outstanding during the period.

Operating Expenses

Losses and loss adjustment expenses

Losses and loss adjustment expenses represent our best estimate of the losses and associated settlement costs related to the risks we assume. Losses consist of claims paid, case reserves, and IBNR costs, which are recorded net of estimated recoveries from reinsurance, salvage, and subrogation. Loss adjustment expenses consist of the cost associated with processing and settling claims.

Throughout the year, we record an estimate of quarterly losses and loss adjustment expenses in the Consolidated Statements of Operations using an annual loss ratio, which is based on statistical analysis performed by our internal and external actuarial teams and considers several factors, including projected levels of catastrophe events and development patterns. The annual loss ratio is reviewed regularly and adjusted, as necessary. Management believes this approach provides a more consistent view of loss experience over the year given the seasonality of our business.

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Ceding commissions, net

Ceding commissions, net represents the commissions paid by Hagerty Re to our insurance carrier partners for the risk assumed under the quota share agreements with those carriers. These commissions represent Hagerty Re's pro-rata share of the carrier's costs including (i) policy acquisition costs, which principally consist of the commissions earned by our MGA subsidiaries; (ii) general and administrative costs; and (iii) other costs. Ceding commissions are recorded net of commissions received by Hagerty Re from reinsurers related to ceded reinsurance premiums. Ceding commissions, net is recognized ratably over the term of the related policies, which is generally 12 months.

Sales expense

Sales expense includes costs related to the sale and servicing of insurance policies, as well as costs related to our membership and marketplace offerings, such as broker expense, cost of sales, promotion expense, and travel and entertainment expenses. Broker expense is the compensation paid to our agent partners and national broker partners when an insurance policy is written by our MGA subsidiaries through a broker relationship. Broker expense generally trends with written premium growth. Cost of sales includes payment processing fees, emergency roadside service costs, postage and other variable costs associated with the sale and servicing of a policy.

Cost of sales also represents direct costs associated with the sale of vehicles and memorabilia through auctions and private sales, including the purchase price and associated direct costs of inventory when Broad Arrow opportunistically purchases inventory to be sold through auctions or private sales, as well as interest expense and borrowing costs associated with the BAC Credit Facility. Promotion expense includes various costs related to branding, events, advertising, marketing, and customer acquisition.

Salaries and benefits

Salaries and benefits consists primarily of costs related to employee compensation, payroll taxes, employee benefits, and employee development costs. Salaries and benefits are expensed as incurred except for costs that are required to be capitalized, which are amortized over the useful life of the asset created, such as internally developed software and software-as-a-service ("SaaS") implementation costs.

General and administrative expenses

General and administrative expenses primarily consists of expenses related to non-capitalized hardware and software, professional services, and occupancy costs.

Depreciation and amortization

Depreciation and amortization reflects the recognition of the cost of our investments in various assets over their useful lives. Depreciation expense relates to computer hardware, furniture and equipment, and leasehold improvements. Amortization relates to internally developed software, SaaS implementation costs, and finite-lived intangible assets associated with acquisitions.

Other Items

Loss related to warrant liabilities, net

In July 2024, we completed an exchange offer under which holders of our warrants were issued 3,876,201 shares of Class A Common Stock in exchange for 19,483,539 warrants, with a nominal cash settlement paid in lieu of fractional shares (the "Warrant Exchange"). No warrants remained outstanding following the completion of the Warrant Exchange.

Prior to the Warrant Exchange, our warrants were accounted for as liabilities and were measured at fair value each reporting period, with changes in fair value recognized within "Loss (gain) related to warrant liabilities, net" in our Consolidated Statements of Operations. In general, under the fair value accounting model, in periods when our stock price increased, the warrant liability increased, and we recognized additional expense. In periods when our stock price decreased, the warrant liability decreased, and we recognized additional income.

Interest expense and other, net

Interest expense and other, net primarily includes interest expense related to outstanding borrowings, primarily related to our current and prior revolving credit facilities with JPMorgan Chase Bank, N.A. ("JPM"), as well as the State Farm Term Loan (as defined in Note 18 — Debt in Item 8 of Part II of this Annual Report). Interest expense and other, net also includes changes in the estimated value of the TRA Liability between periods. Refer to Note 23 — Taxation in Item 8 of Part II of this Annual Report for additional information related to the TRA.

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Income tax benefit (expense)

THG is taxed as a pass-through ownership structure under provisions of the IRC and a similar section of state income tax law. As such, any taxable income or loss generated by THG is passed through to and included in the taxable income or loss of THG unit holders, including Hagerty, Inc.

Hagerty, Inc. is taxed as a corporation and pays corporate federal, state, and local taxes with respect to income allocated from THG. Hagerty, Inc., Hagerty Insurance Holdings, Inc., Broad Arrow, Hagerty Radwood, Inc., and various foreign subsidiaries are treated as taxable entities and income taxes are provided where applicable. Hagerty Insurance Holdings, Inc. files a consolidated tax return with its wholly owned corporate subsidiaries Hagerty Re and Drivers Edge.

Key Operating Metrics

In MD&A, we discuss certain key operating metrics for the Insurance and Marketplace segments, as described below. We use these key operating metrics to evaluate our business, measure our performance, identify trends against planned initiatives, prepare financial projections, and make strategic decisions.

Insurance Segment

Total Written Premium is the total amount of insurance premium written by our MGA subsidiaries on behalf of our insurance carrier partners during the period. Total Written Premium reflects the direct economic benefit of our policy acquisition efforts and is closely correlated with the growth of insurance commission revenue generated by our MGA subsidiaries and earned premium generated by Hagerty Re.

Hagerty Re Loss Ratio represents the ratio of (i) Hagerty Re's losses and loss adjustment expenses to (ii) its earned premium. This metric allows us to evaluate our historical loss patterns and make necessary and appropriate adjustments.

Hagerty Re Combined Ratio represents the ratio of (i) Hagerty Re's losses, loss adjustment expenses, and underwriting expenses to (ii) its earned premium. Hagerty Re's underwriting expenses primarily include ceding commissions and, to a lesser extent, certain administrative expenses. This metric provides a benchmark to evaluate underwriting profitability. A combined ratio under 100% indicates underwriting income while a combined ratio exceeding 100% indicates an underwriting loss.

New Business Count represents the number of new insurance policies issued by our MGA subsidiaries during the period. New Business Count is an important metric to assess our financial performance because policy growth is critical to our success. While we benefit from strong policy retention through renewals, new policies more than offset those cancelled or non-renewed at expiration. New policies also often mean new relationships and an opportunity to sell additional products and services.

Policies in Force ("PIF") represents the number of current and active insurance policies as of the end of the period. PIF is an important metric to assess our financial performance because policy growth drives revenue growth, increases brand awareness and market penetration, generates additional insight to improve the performance of our platform, and provides key data to assist us in strategic decision making.

PIF Retention represents the percentage of expiring insurance policies that are renewed on the renewal effective date, calculated on a rolling twelve months basis. PIF Retention is an important measurement of the number of policies retained each year, which contributes to our recurring revenue streams including commissions earned by our MGA subsidiaries, HDC membership fees, and earned premium generated by Hagerty Re.

Vehicles in Force represents the number of current insured vehicles as of the end of the period. Vehicles in Force is an important metric to assess our financial performance because insured vehicle growth drives revenue growth and increases market penetration.

HDC Paid Member Count represents the number of current Members who pay an annual membership subscription as of the end of the period. HDC Paid Member Count primarily includes Members whose HDC membership is bundled with their insurance policy and paid as part of their policy premium. HDC Paid Member Count is an important metric because it helps us measure membership revenue growth and provides an opportunity to cross-sell other products and services to our Members.

Marketplace Segment

Aggregate Auction Sales represents the total purchase price paid by buyers, including our buyer's premium and fees, for vehicles and memorabilia purchased through Broad Arrow's live and online auctions, as well as through Hagerty Marketplace's online sale platform.

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Net Auction Sales represents the total purchase price paid by buyers, excluding buyer's premium and fees, for vehicles and memorabilia purchased through Broad Arrow's live and online auctions, as well as through Hagerty Marketplace's online sale platform.

Private Sales is a volume metric representing the total purchase price paid by buyers for all vehicles and memorabilia purchased through Broad Arrow's private sales business, including brokered sales and sales of our inventory.

BAC Loan Portfolio Balance represents the period end loan portfolio balance of BAC recorded on our Consolidated Balance Sheets.

BAC Average Loan Portfolio represents the monthly average loan portfolio balance of BAC during the period.

Financial Highlights

The table below presents a summary of key financial measures from our Consolidated Statements of Operations, which are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), as well as our non-GAAP financial measures.

Year ended December 31,

GAAP Financial Measures dollars in thousands (except per share amounts)

Basic Earnings Per Share ("EPS") $ 0.41 $ 0.10 $ 0.31 N/M

Non-GAAP Financial Measures

N/M = Not meaningful

(1) Refer to Note 2 — Summary of Significant Accounting Policies in Item 8 of Part II of this Annual Report for a reconciliation of prior year revenue to current year presentation.

For the year ended December 31, 2025, we reported Net income of $149.2 million, representing a $70.9 million, or 90.6%, increase compared to the prior year, and Adjusted EBITDA of $236.8 million, representing a $75.1 million, or 46.5%, increase compared to the prior year.

In our Insurance segment, we experienced 14.3% growth in Written Premium, which drove a 14.9% increase in Commission and fee revenue and a 13.0% increase in Earned premium, net. The comparison to the prior year is also favorably impacted by a lower level of losses and loss adjustment expenses, driven by a decrease in catastrophe losses, as prior year results included $26.7 million of pre-tax losses related to hurricane activity, as well as a $20.5 million reserve reduction primarily related to favorable development for the 2024 accident year and improvement in current accident year experience.

In our Marketplace segment, current year results reflect significantly higher levels of Broad Arrow inventory sales and private sale commissions, as well as results from Broad Arrow's inaugural European auctions at Concorso d’Eleganza Villa d’Este Auction on the shores of Lake Como in Italy, the Zoute Concours Auction held in Knokke-Heist, Belgium, the Zürich Auction held in Zürich, Switzerland, and an auction held at the Concours at Wynn Las Vegas.

Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS are non-GAAP financial measures. Please see the section titled "Non-GAAP Financial Measures" below for a description of these non-GAAP financial measures and a reconciliation to the most comparable GAAP measure.

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Results of Operations

Insurance Segment

The following table summarizes Insurance segment results of operations for the years ended December 31, 2025 and 2024, and the dollar and percentage change between the two periods:

Year ended December 31,

Segment Results: dollars in thousands

REVENUES:

EXPENSES:

Operational Metrics:

Hagerty Re Loss Ratio 39.3 % 46.4 % (7.1) % N/M

Hagerty Re Combined Ratio 86.6 % 94.1 % (7.5) % N/M

Operational Metrics:

Policies in Force Retention 88.7 % 89.0 % (0.3) % N/M

N/M = Not meaningful

(1) Other expenses primarily includes Salaries and benefits, General and administrative expenses, Depreciation and amortization, and Interest expense related to the State Farm Term Loan (as defined in Note 18 — Debt in Item 8 of Part II of this Annual Report).

Commission and fee revenue

Commission and fee revenue was $486.4 million for the year ended December 31, 2025, an increase of $63.1 million, or 14.9%, compared to 2024. This increase was driven by policy renewals, which contributed $51.1 million to the year-over-year improvement, as well as an increase in new business count, which resulted in a $12.0 million increase in revenue.

The increase in revenue from policy renewals was primarily driven by a 14.7% increase in written premium from renewal policies, as well as continued strong policy retention. The increase in renewal policy premiums is the result of rate increases in several states due to inflation and higher vehicle repair costs, both of which contribute to higher premiums and, in turn, higher commission revenue.

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The increase in revenue from new policies was primarily driven by a 33.3% increase in new policies written when compared to the prior year period, including business generated by the State Farm Master Alliance Agreement. Refer to Note 24 — Related-Party Transactions in Item 8 of Part II of this Annual Report for additional information with respect to the State Farm Master Alliance Agreement.

During the year ended December 31, 2025, Commission and fee revenue from agent sources increased $35.9 million, or 15.4%, and Commission and fee revenue from direct sources increased $27.2 million, or 14.3%, compared to 2024. Commission rates vary based on geography, but do not differ by distribution channel (i.e., whether they are direct-sourced or agent-sourced).

Earned premium, net

Earned premium, net was $726.7 million for the year ended December 31, 2025, an increase of $83.4 million, or 13.0%, compared to 2024. This increase was primarily due to continued growth of subject premiums written through our MGA subsidiaries, which increased $118.9 million, or 12.8%, compared to 2024.

The following tables present premiums assumed and earned, as well as the related quota share percentages for the years ended December 31, 2025 and 2024:

U.S. Canada U.K. (1) Total

in thousands (except percentages)

Reinsurance premiums ceded (53,308)

Change in unearned premiums (54,021)

Change in deferred reinsurance premiums 3,410

(1) In 2025 and 2024, we did not reinsure classic auto risks produced by our U.K. MGA subsidiary, and the prior book of business is in run-off.

(2) Represents the portion of total written premium written by our MGA subsidiaries that is subject to reinsurance agreements with our insurance carrier partners.

U.S. Canada U.K. (1) Total

in thousands (except percentages)

Reinsurance premiums ceded (50,541)

Change in unearned premiums (41,207)

Change in deferred reinsurance premiums 8,101

(1) In 2025 and 2024, we did not reinsure classic auto risks produced by our U.K. MGA subsidiary, and the prior book of business is in run-off.

(2) Represents the portion of total written premium written by our MGA subsidiaries that is subject to reinsurance agreements with our insurance carrier partners.

Membership and other revenue

Membership and other revenue was $82.4 million for the year ended December 31, 2025, an increase of $3.5 million, or 4.4%, compared to 2024.

Membership fee revenue was $63.0 million for the year ended December 31, 2025, an increase of $5.5 million, or 9.6%, compared to 2024, which was primarily due to a $5.1 million, or 9.6%, increase in revenue attributable to new insurance policies issued with a bundled HDC membership.

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Other revenue, which primarily includes sponsorship, admission, advertising, valuation, and sublease revenue, was $19.4 million for the year ended December 31, 2025, a decrease of $2.1 million, or 9.7%, compared to 2024. This decrease was primarily attributable to the loss of registration fee revenue attributable to Motorsport Reg ("MSR"), which was sold in June 2024. Refer to Note 12 — Divestitures in Item 8 of Part II of this Annual Report for additional information related to the sale of MSR.

Net investment income and Net investment gains

The following table presents the components of Net investment income and Net investment gains for the years ended December 31, 2025 and 2024:

Year ended December 31,

in thousands (except percentages)

Investment management fees and expenses (562) (324) (238) 73.5%

Losses and loss adjustment expenses

Losses and loss adjustment expenses were $285.4 million for the year ended December 31, 2025, a decrease of $13.2 million, or 4.4%, compared to 2024. For the year ended December 31, 2025, our loss ratio was 39.3%, a decrease of 7.1% from 2024, when our loss ratio was 46.4%. These decreases were primarily driven by a decrease in catastrophe losses, as prior year results included $26.7 million of pre-tax losses related to hurricane activity. The comparison to the prior year is also favorably influenced by a $20.5 million reduction to reserves recorded in 2025 primarily due to favorable development for the 2024 accident year related to decreased severity and loss ratio trends in auto liability and physical damage claims. To a lesser extent, there was also an improvement in current accident year experience driven by favorable loss trends, mainly in auto liability. These factors were partially offset by an increase in Losses and loss adjustment expenses due to the 13.0% increase in Earned premium, net discussed above.

Ceding commissions, net

Ceding commissions, net was $337.1 million for the year ended December 31, 2025, an increase of $35.4 million, or 11.7%, compared to 2024. This increase is primarily attributable to the 13.0% increase in Earned premium, net discussed above.

The following table summarizes the components of Ceding commissions, net for the years ended December 31, 2025 and 2024:

Year ended December 31,

Ceding commission: in thousands (except percentages)

Ceding commission – reinsurance ceded (20,599) (15,929)

Percentage of earned premium 46.4 % 46.9 %

Sales expense

Sales expense was $165.9 million for the year ended December 31, 2025, an increase of $14.6 million, or 9.6%, compared to 2024. This increase was primarily driven by broker expense, which increased $7.9 million, or 11.7%, consistent with the written premium growth in the agent insurance distribution channel. To a lesser extent, payment processing fees and postage costs increased by $2.1 million and $1.5 million, respectively, driven by policy count growth, as well as a shift in customer preference towards credit cards as a payment method within our MGA subsidiaries.

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Other expenses

Salaries and benefits were $245.9 million for the year ended December 31, 2025, an increase of $37.0 million, or 17.7%, compared to 2024. This increase was primarily driven by higher accrued incentive compensation, reflecting stronger performance compared to the prior year, when losses related to hurricane activity significantly reduced achievement of the financial goals underlying accrued incentive compensation. To a lesser extent, Salaries and benefits increased as a result of increased headcount and merit increases year-over-year.

General and administrative expenses were $85.6 million for the year ended December 31, 2025, an increase of $9.3 million, or 12.2%, compared to 2024. This increase was primarily due to a $5.8 million increase in software-related costs, largely driven by costs related to our new insurance policy management system, and to a lesser extent, a $1.1 million increase in professional fees. The increase in professional fees was primarily driven by costs related to the Markel Fronting Arrangement.

Marketplace Segment

The following table summarizes Marketplace segment results of operations for the years ended December 31, 2025 and 2024, and the dollar and percentage change between the two periods:

Year ended December 31,

Segment Results: in thousands (except percentages)

REVENUES:

EXPENSES:

Operational Metrics:

(1) Other expenses primarily includes Salaries and benefits, General and administrative expenses, and Depreciation and amortization.

Marketplace revenue was $120.1 million for the year ended December 31, 2025, an increase of $64.7 million, or 116.6%, compared to 2024. This increase was principally due to a significantly higher private sale revenue, including commissions earned from brokered private sale transactions, proceeds from the sale of inventory, and the expansion of our live auction offerings in Europe, which led to three inaugural auctions for Broad Arrow in 2025: the Concorso d’Eleganza Villa d’Este Auction on the shores of Lake Como in Italy, the Zoute Auction held in Knokke-Heist, Belgium, and the Zürich Auction held in Zürich, Switzerland. In addition to Broad Arrow's European expansion, Broad Arrow became the official auction of Concours at Wynn Las Vegas, which resulted in a new auction in 2025.

Sales expense was $92.3 million for the year ended December 31, 2025, an increase of $53.1 million, or 135.3%, compared to 2024. This increase was primarily due to a $46.9 million increase in cost of sales, predominantly as a result of a higher level of inventory sales, as well as a $7.8 million increase in sales commissions, consistent with revenue growth within the Marketplace segment.

Other expenses totaled $38.9 million for the year ended December 31, 2025, an increase of $8.3 million, or 27.1%, compared to 2024. The higher level of expense in 2025 was primarily driven by a $5.4 million increase in Salaries and benefits and a $2.2 million increase in General and administrative expenses. These increases were primarily the result of Broad Arrow's global expansion, as well as higher accrued incentive compensation, reflecting stronger performance compared to the prior year.

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Other Items

In addition to segment operating results, the following items contributed to our overall financial position and results of operations:

Year ended December 31,

in thousands (except percentages)

Loss related to warrant liabilities, net $ — $ 8,544 $ (8,544) (100.0) %

N/M = Not meaningful

Loss related to warrant liabilities, net

During the year ended December 31, 2024, Loss related to warrant liabilities, net was $8.5 million, consisting of a $2.0 million loss related to the Warrant Exchange and a $6.5 million loss related to the change in fair value of our then outstanding warrant liabilities. There were no warrants outstanding during the year ended December 31, 2025 due to the Warrant Exchange. Refer to Note 6 — Fair Value Measurements in Item 8 of Part II of this Annual Report for additional information with respect to our warrants.

Interest expense

During the year ended December 31, 2025, Interest expense increased $4.0 million compared to 2024. This increase was driven by higher net borrowings under the 2025 JPM Credit Facility, as well as a $2.3 million non-recurring gain on the sale of an interest rate swap in the second quarter of 2024.

Change in TRA Liability

During the year ended December 31, 2025, we recorded $32.2 million of expense due to a change in the value of the TRA Liability, compared to $1.6 million recorded in 2024. During the third quarter of 2025, we determined it was appropriate to establish the TRA Liability related to current and prior year exchanges of THG units for shares of Class A Common Stock. The establishment of the TRA Liability is based on management's estimate of sufficient future taxable income to utilize the full amount of any tax benefits subject to the TRA over the period specified therein. The expense related to the remeasurement of the TRA Liability is recorded within "Interest expense and other, net" in the Consolidated Statements of Operations. Refer to Note 23 — Taxation in Item 8 of Part II of this Annual Report for additional information.

Income tax benefit (expense)

We are the sole managing member of THG, and as a result, consolidate its financial results. THG is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, THG is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by THG is passed through and included in the taxable income or loss of its members, including Hagerty, Inc., on a pro rata basis. Hagerty, Inc. is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income or loss of THG, as well as any of its stand-alone income or loss. In addition, Hagerty Insurance Holdings, Inc., Broad Arrow, Hagerty Radwood, Inc., and various foreign subsidiaries are treated as taxable entities. Hagerty Insurance Holdings, Inc. files a consolidated tax return with its wholly owned corporate subsidiaries Hagerty Re and Drivers Edge.

We have historically maintained a full valuation allowance on our deferred tax assets related to the difference between the outside tax basis and book basis of Hagerty, Inc.'s investment in the assets of THG. The realization of deferred tax assets is dependent upon the generation of future taxable income sufficient to utilize these deferred tax assets. As of each reporting date, we consider new evidence, both positive and negative, that could affect our view of the future realization of our deferred tax assets. As of December 31, 2024, we concluded that it was more likely than not that certain deferred tax assets, including the deferred tax asset for Hagerty, Inc.'s investment in the assets of THG, would not be realized because we were in a three-year cumulative loss position and the generation of sufficient future taxable income to utilize these deferred tax assets was uncertain.

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As of each reporting period, we consider new evidence, both positive and negative, that could affect our view of the future realization of our deferred tax assets. In the third quarter of 2025, our continued assessment of the realizability of our deferred tax assets concluded that sufficient sources of future taxable income will be generated to realize a portion of the deferred tax assets related to the outside basis in Hagerty, Inc.'s investment in THG and other tax attributes of the Hagerty, Inc. filing entity. In assessing the realizability of these deferred tax assets, we considered all sources of positive and negative evidence, including (i) that we achieved cumulative three-year profitability during the quarter; (ii) that our forecasts indicated continued profitability; and (iii) other positive business factors. Based on this evaluation, we determined it was appropriate to release a portion of the valuation allowance previously recorded against our federal and state deferred tax assets. As a result, $41.8 million of this valuation allowance was released in 2025 with a corresponding income tax benefit recognized in the Consolidated Statements of Operations.

For the year ended December 31, 2025, income tax benefit was $10.0 million, representing a change of $25.4 million compared to 2024. This year-over-year change was primarily a result of a net decrease in the valuation allowance against our deferred tax assets, including the release of the valuation allowance discussed above. Refer to Note 23 — Taxation in Item 8 of Part II of this Annual Report for additional information with respect to items affecting our effective tax rate.

Non-GAAP Financial Measures

Adjusted EBITDA

We define EBITDA as consolidated Net income, excluding Interest expense and other, net, Income tax expense (benefit), and Depreciation and amortization. We define Adjusted EBITDA as EBITDA, further adjusted to (i) exclude net investment gains and losses; (ii) deduct interest expense related to the State Farm Term Loan; (iii) exclude net gains and losses related to our warrant liabilities prior to the Warrant Exchange; (iv) exclude share-based compensation expense; and when applicable, exclude (v) restructuring, impairment and related charges; (vi) gains, losses and impairments related to divestitures; and (vii) certain other unusual items. Refer to Note 6 — Fair Value Measurements in Item 8 of Part II of this Annual Report for additional information regarding the Warrant Exchange.

How This Measures is Useful

When used in conjunction with GAAP financial measures, Adjusted EBITDA is a supplemental measure of operating performance that we believe is a useful measure to evaluate our performance period over period and relative to our competitors and peers. Management uses Adjusted EBITDA to evaluate our operating performance on a consistent basis, as it removes the impact of items not directly resulting from our core operations. We believe the presentation of Adjusted EBITDA provides securities analysts, investors, and other interested parties with a supplemental view of our operating performance that enhances their understanding of our business and our results operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.

Limitations of the Usefulness of This Measure

Adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies. Presentation of Adjusted EBITDA is not intended to be considered in isolation or a substitute for, or superior to, the financial information prepared in accordance with GAAP. A reconciliation of Adjusted EBITDA to Net income, the most directly comparable GAAP measure, is presented below.

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Year ended December 31,

in thousands

Interest expense related to State Farm Term Loan (4) (2,060) (2,060)

Loss related to warrant liabilities, net — 8,544

Gain related to divestiture — (87)

(1) Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Consolidated Statements of Operations.

(2) Principally includes interest expense and changes in the value of the TRA liability, which totaled $32.2 million and $1.6 million during the years ended December 31, 2025 and 2024, respectively. Refer to Note 23 — Taxation in Item 8 of Part II of this Annual Report for additional information.

(3) Income tax (benefit) expense for the year ended December 31, 2025 includes a $41.8 million benefit related to the release of a portion of the valuation allowance against our deferred tax assets. Refer to Note 23 — Taxation in Item 8 of Part II of this Annual Report for additional information.

(4) Interest expense related to the State Farm Term Loan is charged against Adjusted EBITDA as it is directly attributable to the operations of Hagerty Re. Refer to Note 18 — Debt and Note 24 — Related-Party Transactions in Item 8 of Part II of this Annual Report for additional information.

(5) For the year ended December 31, 2025, other unusual items includes certain legal settlement expenses, professional fees associated with the THG Unit Exchange and related Secondary Offering, and certain material severance expenses. For the year ended December 31, 2024, other unusual items includes professional fees associated with the Warrant Exchange, as well as certain material severance expenses. Refer to Note 20 — Stockholders' Equity in Item 8 of Part II of this Annual Report for additional information with respect to the THG Unit Exchange and Note 6 — Fair Value Measurements in Item 8 of Part II of this Annual Report for additional information with respect to our warrants.

As a result of our transition to the Article 7 reporting standards, Net investment income is reported as a component of revenue and is no longer an adjustment in our reconciliation from Net income to Adjusted EBITDA. In addition, interest expense related to the State Farm Term Loan is now deducted from Adjusted EBITDA as it is directly attributable to Hagerty Re, which generates a significant portion of our net investment income. The following table presents a reconciliation of Adjusted EBITDA as presented in prior periods in accordance with Article 5, to the current presentation in accordance with Article 7:

in thousands

Prior presentation of Adjusted EBITDA $ 124,473

Net investment income 39,249

Interest expense related to State Farm Term Loan (2,060)

Current presentation of Adjusted EBITDA $ 161,662

Adjusted Net Income and Adjusted Diluted EPS

Beginning with this Annual Report, Adjusted Net Income is presented as a non-GAAP financial measure, as we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. In addition, we revised and renamed our non-GAAP measure previously titled "Adjusted EPS" to "Adjusted Diluted EPS". The revised measure uses Adjusted Net Income as the numerator in the calculation and updated the most comparable GAAP measure from Basic EPS to Diluted EPS. We believe that the revised calculation better reflects the potential dilution from these securities and enhances comparability with industry peers.

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Adjusted Net Income represents Net income attributable to Class A Common Stockholders, assuming the full exchange of all outstanding THG units and Series A Convertible Preferred Stock for shares of Class A Common Stock, adjusted to exclude (i) net investment gains and losses; (ii) changes in the fair value of warrant liabilities prior to the Warrant Exchange; (iii) changes in the TRA Liability; (iv) gains and losses related to divestitures; and (v) certain other unusual items, each of which we do not believe are directly related to our core operations and may not be indicative of our ongoing performance. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income by the weighted average shares of Class A Common Stock outstanding, assuming the full exchange of all outstanding THG units, Series A Convertible Preferred Stock, and unvested share-based compensation awards. Refer to Note 6 — Fair Value Measurements in Item 8 of Part II of this Annual Report for additional information regarding the Warrant Exchange.

How These Measures Are Useful

When used in conjunction with GAAP financial measures, Adjusted Net Income and Adjusted Diluted EPS are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors and peers. Management uses Adjusted Net Income and Adjusted Diluted EPS to evaluate our operating performance on a consistent basis to make strategic and operational decisions. We believe these measures provide management and investors with useful information regarding trends in our business that may not otherwise be apparent when relying solely on GAAP measures. By assuming the full exchange of all outstanding THG units and Series A Convertible Preferred Stock, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income attributable to Class A Common Stockholders driven by increases in Hagerty, Inc.'s ownership in THG, which is unrelated to our operating performance, and excludes items that are unusual or may not be indicative of our ongoing performance.

Limitations of the Usefulness of These Measures

Adjusted Net Income and Adjusted Diluted EPS may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of Adjusted Net Income and Adjusted Diluted EPS should not be considered alternatives to Net income attributable to Class A Common Stockholders and Diluted EPS, as determined under GAAP. While these measures are useful in evaluating our performance, they assume the full exchange of all outstanding THG units and Series A Convertible Preferred Stock for shares of Class A Common Stock, which has not occurred and may not occur. Further, the adjustments made to arrive at Adjusted Net Income exclude certain expenses and income that may recur in the future. Adjusted Net Income and Adjusted Diluted EPS should be evaluated in conjunction with our GAAP financial results. A reconciliation of Adjusted Net Income to Net income attributable to Class A Common Stockholders, the most directly comparable GAAP measure, and the computation of Adjusted Diluted EPS are presented below.

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Year ended December 31,

Numerator: in thousands (except per share amounts)

Net income attributable to Class A Common Stockholders $ 41,463 $ 9,590

Adjustments:

Accretion of Series A Convertible Preferred Stock 7,555 7,427

Net income attributable to non-controlling interest 100,207 61,286

Loss related to warrant liabilities, net — 8,544

Gain related to divestiture — (87)

Denominator:

Adjustments:

Assumed vesting of share-based compensation awards 7,062 7,162

Adjusted Diluted EPS $ 0.37 $ 0.21

Year ended December 31,

Diluted earnings per share $ 0.37 $ 0.10

Non-GAAP adjustments (4) (0.05) (0.01)

Adjusted Diluted EPS $ 0.37 $ 0.21

(1) For the year ended December 31, 2025, other unusual items includes certain legal settlement expenses, professional fees associated with the THG Unit Exchange and related Secondary Offering, and certain material severance expenses. For the year ended December 31, 2024, other unusual items includes professional fees associated with the Warrant Exchange, as well as certain material severance expenses. Refer to Note 20 — Stockholders' Equity in Item 8 of Part II of this Annual Report for additional information with respect to the THG Unit Exchange and Note 6 — Fair Value Measurements in Item 8 of Part II of this Annual Report for additional information with respect to our warrants.

(2) Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an estimated effective tax rate of 23.7% and 26.3% for the years ended December 31, 2025 and 2024, respectively, which considers the U.S. federal statutory rate of 21%, a combined state income tax rate of approximately 5% (net of federal benefits), and certain material permanent items.

(3)Assumes the exchange of all outstanding THG units, Series A Convertible Preferred Stock, and unvested share-based compensation awards for shares of Class A Common Stock, resulting in the elimination of the non-controlling interest and recognition of the Net income attributable to non-controlling interest, as well as elimination of the accretion of Series A Convertible Preferred Stock. Refer to Note 22 — Earnings Per Share in Item 8 of Part II of this Annual Report for additional information on Diluted EPS.

(4)Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation above for additional information.

Liquidity and Capital Resources

Maintaining a strong balance sheet and capital position is a top priority for us. As a holding company without direct operations, we manage liquidity globally and across all operating subsidiaries.

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Sources and Uses of Liquidity

Our sources of liquidity include our: (i) balances of cash and cash equivalents; (ii) net working capital; (iii) cash flows from operations, including net investment income; (iv) borrowings from the 2025 JPM Credit Facility (as defined below) to fund the general corporate needs of THG and its subsidiaries; and (v) borrowings from the BAC Credit Facility (as defined below) to fund a portion of the lending activities of BAC.

Our primary liquidity needs and capital requirements include cash required for: (i) funding the business operations of THG and its subsidiaries; (ii) funding strategic investments and acquisitions; (iii) servicing and repayment of borrowings under the 2025 JPM Credit Facility, the BAC Credit Facility, and the unsecured term loan credit facility with State Farm (the "State Farm Term Loan"); (iv) funding potential cash dividend payments on the Series A Convertible Preferred Stock; (v) payment of income taxes; (vi) funding required distributions to the non-controlling interest unit holders of THG; and (vii) funding required payments to Legacy Unit Holders under the TRA.

As of December 31, 2025, we believe that our sources of liquidity will be sufficient to provide an adequate level of capital to support our anticipated short and long-term commitments, operating needs, and capital requirements.

Financing Arrangements

2025 JPM Credit Facility

In March 2025, THG entered into a credit agreement with JPM, as administrative agent, issuing bank and swingline lender, the foreign subsidiary borrowers thereto, and the other financial institutions party thereto as lenders (the "2025 JPM Credit Agreement").

The 2025 JPM Credit Agreement provides for a senior unsecured revolving credit facility (the "2025 JPM Credit Facility") with an aggregate borrowing capacity of $375.0 million. The 2025 JPM Credit Agreement matures in March 2030, but may be extended if agreed to by THG and the lenders party thereto. Any unpaid balance on the 2025 JPM Credit Facility is due at maturity. As of December 31, 2025, total outstanding borrowings under the 2025 JPM Credit Facility were $84.9 million.

The 2025 JPM Credit Agreement requires us to, among other things, meet certain financial covenants, including a minimum fixed charge coverage ratio test and a maximum leverage ratio test. As of December 31, 2025, we were in compliance with these financial covenants.

BAC Credit Facility

BAC and its wholly owned subsidiary BAC Funding 2023-1, LLC, as borrower, have a revolving credit agreement (the "BAC Credit Agreement") that provides for a revolving credit facility (the "BAC Credit Facility"). On November 4, 2025, BAC and BAC Funding 2023-1, LLC, as borrower, amended the BAC Credit Agreement to, among other things, increase the aggregate commitment under the BAC Credit Facility from $75.0 million to $150.0 million. The BAC Credit Facility's borrowing base is determined by the carrying value of certain BAC notes receivable, which is then limited by the amount of the aggregate commitment. As of December 31, 2025, the applicable borrowing base for the BAC Credit Agreement was $68.4 million.

The revolving borrowing period of the BAC Credit Facility expires in November 2027, followed by an amortization period until it ultimately matures in November 2028. The borrowing period and the maturity date of the BAC Credit Facility may be extended by one year if requested by BAC and agreed by the administrative agent. BAC is not a borrower or guarantor of the BAC Credit Facility.

BAC and certain of its subsidiaries may transfer notes receivable to wholly owned, bankruptcy remote special purpose entities (each, an "SPE") to secure borrowings, isolating these assets from our other obligations. Recourse is limited to (i) an obligation of the applicable seller to repurchase a note receivable if it is determined that there was a breach of any representation or warranty relating to such note receivable as of the relevant date specified in the related transfer agreement; and (ii) a limited guarantee for certain liabilities that may result under certain foreign exchange hedging activity of one of the SPEs.

BAC and BAC Funding 2023-1, LLC are required, among other things, to meet certain financial covenants including that BAC, as the servicer, maintain a minimum tangible net worth, minimum liquidity balances, and an indebtedness to tangible net worth ratio. As of December 31, 2025, we were in compliance with the financial covenants under the BAC Credit Agreement.

Refer to Note 18 — Debt in Item 8 of Part II of this Annual Report for additional information related to the 2025 JPM Credit Agreement and BAC Credit Agreement.

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Capital and Dividend Restrictions

We are a holding company with no material assets other than our ownership interest in THG and its operating subsidiaries. Accordingly, our ability to meet our cash requirements depends on THG's financial performance and the distributions we receive from THG. Our subsidiaries' ability to make distributions, pay dividends and make other payments may be regulated by the states and territories where they are domiciled. For example, as described below, our ability to upstream capital from Hagerty Re is subject to Bermuda regulatory capital requirements and dividend restrictions administered by the BMA, which may limit distributions in certain periods.

For a discussion of the risks associated with our holding company structure, refer to Item 1A. Risk Factors — Risks Related to Tax — "Hagerty, Inc. is a holding company, whose only material asset is its interest in THG. Hagerty, Inc. depends on THG distributions to pay taxes, make payments under the TRA, and pay other expenses." in this Annual Report.

Capital Restrictions

Our reinsurance subsidiary, Hagerty Re, is subject to the Bermuda Solvency Capital Requirement ("BSCR"), which establishes a target capital level and enhanced capital requirements for each insurer. As of December 31, 2025, Hagerty Re maintained sufficient statutory capital and surplus to comply with the BSCR.

Similarly, our U.S. insurance company subsidiary, Drivers Edge, which holds certificates of authority in 41 states, is subject to state-specific minimum capital and surplus requirements, as well as risk-based capital ("RBC") requirements. RBC levels are reported on an annual basis. As of December 31, 2025, Drivers Edge maintained sufficient capital and surplus levels to comply with National Association of Insurance Commissioners ("NAIC") and state insurance regulations.

Dividend Restrictions

Under Bermuda law, Hagerty Re is prohibited from declaring or issuing a dividend if it fails to meet its minimum solvency margin or minimum liquidity ratio. Prior approval from the BMA is also required if Hagerty Re's proposed dividend payments would exceed 25% of its prior year-end total statutory capital and surplus. Based on these restrictions, during 2026, Hagerty Re can pay $95.4 million in dividends without prior BMA approval; however, the amount that Hagerty Re can pay in dividends is further limited by the amount of unrestricted cash and liquid investments held outside of restricted accounts, which totaled $65.6 million as of December 31, 2025. As of December 31, 2025, there were no plans to issue dividends from Hagerty Re.

Similarly, state statutes restrict the amount of dividends that Drivers Edge may pay without prior approval of state insurance regulators. As of December 31, 2025, there were no plans to issue dividends from Drivers Edge and a change in such plans may require regulatory approval.

Comparative Cash Flows

The following table summarizes our cash flow data for the years ended December 31, 2025 and 2024:

Year ended December 31,

in thousands (except percentages)

N/M = Not meaningful

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Operating Activities

Cash provided by operating activities primarily consists of Net income, adjusted for non-cash items, and changes in working capital balances. Net cash provided by operating activities for the years ended December 31, 2025 and 2024 is presented below:

Year ended December 31,

in thousands (except percentages)

Net cash provided by operating activities for the year ended December 31, 2025 was $219.0 million, an increase of $42.0 million, or 23.7%, compared to 2024. This increase was due to a $54.0 million increase in Net income, net of non-cash adjustments, partially offset by a $12.1 million decrease in cash from operating assets and liabilities.

The $12.1 million decrease in net cash from operating assets and liabilities was primarily driven by the timing of the settlement of CUC receivables and payables, which resulted in a $29.0 million net decrease in operating cash flows, as well as claim payments made by Hagerty Re related to catastrophe events occurring in the second half of 2024 and first quarter of 2025, including Hurricane Helene, Hurricane Milton, and the Southern California wildfires. These factors were partially offset by written premium growth, which led to higher balances of Unearned premiums, Advanced premiums, and Due to insurers.

Investing Activities

Cash used in investing activities for the year ended December 31, 2025 decreased by $433.4 million when compared to 2024. This decrease was almost entirely due to the diversification of our investment portfolio during 2024, which resulted in the purchase of investment-grade fixed maturity securities and, to a much lesser extent, equity securities. This factor was partially offset by a $31.0 million increase in net fundings of BAC notes receivable in 2025.

Financing Activities

Cash from financing activities for the year ended December 31, 2025 increased $76.9 million when compared to 2024 primarily due to a $98.1 million increase in net proceeds received from credit facility borrowings. These financing proceeds were partially offset by a $23.6 million increase in required tax distributions to THG non-controlling interest unit holders.

Tax Receivable Agreement

In connection with the consummation of the business combination that formed Hagerty, Inc. in 2021, Hagerty, Inc.

entered into a TRA with the Legacy Unit Holders. The TRA requires us to pay the Legacy Unit Holders 85% of the U.S. federal, state, and local cash tax savings realized by Hagerty, Inc. resulting from increases in tax basis and certain other tax benefits, as outlined in the Business Combination Agreement, upon the exchange of THG units and shares of Hagerty, Inc. Class V Common Stock for shares of Hagerty, Inc. Class A Common Stock or cash.

The amount and timing of any payments under the TRA will vary depending on a number of factors, including, but not limited to, the increase in tax basis of THG's assets, the timing of any future redemptions, exchanges or purchases of THG units held by Legacy Unit Holders, the price of Hagerty, Inc. Class A Common Stock at the time of the redemption, exchange or purchase, the extent to which redemptions or exchanges are taxable, the amount and timing of the taxable income that Hagerty, Inc. generates in the future, the tax rates then applicable, and the portion of the payments under the TRA constituting imputed interest. We expect to have adequate capital resources to meet the requirements and obligations under the TRA entered into with the Legacy Unit Holders.

Refer to the section "Critical Accounting Estimates — Tax Receivable Agreement" and Note 23 — Taxation in Item 8 of Part II of this Annual Report for information related to the TRA.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements as of December 31, 2025.

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Critical Accounting Estimates

The preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make significant judgments, assumptions, and estimates that materially affect the amounts reported in the Company's Consolidated Financial Statements. Management's judgments, assumptions, and estimates are based on historical experience, future expectations, and other factors that are believed to be reasonable as of the date of the Consolidated Financial Statements. Actual results may ultimately differ from management's original estimates, as future events and circumstances sometimes do not develop as expected. The following is a discussion of the critical accounting estimates that may have a material impact on our Consolidated Financial Statements.

Reserves for Unpaid Losses and Loss Adjustment Expenses

Description

Reserves are reviewed by management quarterly and periodically throughout the year by combining historical results and current actual results. When estimating reserves, our actuarial reserving group utilizes several actuarial reserving methods which consider historical claim reporting patterns, claim cycle time, claim frequency and severity, claims settlement practices, adequacy of case reserves over time, seasonality, and current economic conditions. Reserve estimates produced by various actuarial reserving methods are further analyzed to determine the actuarial central estimate which represents the expected value over the range of reasonably possible outcomes.

The following table presents our reserves for losses and loss adjustment expenses, both gross and net of reinsurance recoverables, as of December 31, 2025 and 2024:

Gross % of Total Net % of Total

Loss and loss adjustment reserves: in thousands (except percentages)

Gross % of Total Net % of Total

Loss and loss adjustment reserves: in thousands (except percentages)

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The following table summarizes the (favorable) unfavorable development of management's estimate of gross and net ultimate losses and loss adjustment expenses for the 2021 to 2025 accident years:

in thousands

Judgments and Uncertainties

Estimating the ultimate cost of claims and claims expenses is an inherently complex and subjective process that involves many variables and a high degree of judgment. The factors considered by management in estimating its reserves for unpaid losses and loss adjustment expenses include the following:

•the views of our actuaries;

•historical trends in claim frequency and severity, including the impacts of adverse weather-related events;

•changes in claim cycle time and claim settlement practices;

•observed industry trends;

•the changing mix of business, predominantly due to the large growth in modern collectible cars which carry a different risk profile than the risks associated with collector cars;

•inflation or deflation;

•retention limits under current catastrophe and treaty reinsurance programs; and

•legislative and judicial changes in the jurisdictions in which we operate.

Claims are analyzed and reported based on the year in which the loss occurred - i.e., on an accident year basis. Accident year data is classified and utilized within actuarial models to prepare estimates of required reserves for payments to be made in the future. The timing of claim settlement varies and depends on the type of claim being reported. Claims involving property damage are generally settled faster than bodily injury claims. Historical loss patterns are then applied to actual paid losses and reported losses by accident year to develop expectations of future claim payments. Implicit within the actuarial models are estimates of the impacts of inflation, especially for claims with longer expected cycle times. Refer to Note 15 — Reserves for Unpaid Losses and Loss Adjustment Expenses in Item 8 of Part II of this Annual Report for additional information regarding the methodologies used to estimate loss and loss adjustment expense reserves.

Effect if Actual Results Differ From Estimates and Assumptions

Because actual experience can differ from key assumptions used in estimating reserves, there may be significant variation in the development of reserves and the amount of actual losses and loss adjustment expenses ultimately paid in the future. Any adjustments to our reserves for unpaid losses and loss adjustment expenses are recognized in our Consolidated Statements of Operations in the period in which management determines that an adjustment is required.

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If the actual level of loss frequency and/or severity is higher or lower than our expectations, the ultimate cost of claims paid will differ from management's estimates. An illustration of the potential effect of higher or lower levels of loss frequency and severity on our ultimate cost of claims for the 2025 accident year is provided in the following table:

in thousands

Deferred Income Taxes

Description

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to (i) differences between the financial statement carrying values and tax bases of assets and liabilities; and (ii) operating loss and tax-credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In determining the provision for income taxes for financial statement purposes, we make estimates and judgments which affect our evaluation of the carrying value of our deferred tax assets, as well as our calculation of certain tax liabilities.

Judgments and Uncertainties

We evaluate the carrying value of our deferred tax assets on a quarterly basis. In completing this evaluation, we consider all available positive and negative evidence. Such evidence includes historical operating results, the existence of cumulative earnings and losses in the most recent fiscal years, taxable income in prior carryback year(s) if permitted under the tax law, expectations for future taxable income, the time period over which temporary differences will reverse, and the implementation of feasible and prudent tax planning strategies. Estimating future taxable income is inherently uncertain and requires judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of this evidence, it is more likely than not that all or a portion of the recorded deferred tax assets will not be realized in future periods.

As of December 31, 2025, our Consolidated Balance Sheets include deferred tax assets of $159.2 million related to the outside basis difference in Hagerty, Inc.'s investment in THG. A portion of the total outside basis difference is expected to reverse only upon the eventual sale of Hagerty, Inc.'s interest in THG, which would likely result in a capital loss. Accordingly, as of December 31, 2025, we maintained a corresponding valuation allowance of $133.2 million against the deferred tax assets associated with the outside basis difference.

Effect if Actual Results Differ From Estimates and Assumptions

If management's projections of future taxable income and other positive evidence considered in evaluating the need for the valuation allowance prove, with the benefit of hindsight, to be inaccurate, it could prove more difficult to support the realization of our net deferred tax assets. As a result, an additional valuation allowance could be required, which would have an adverse impact on our effective income tax rate and results. Conversely, if management determines that sufficient positive evidence exists in the jurisdiction in which a valuation allowance is recorded, we may reverse all or a portion of the valuation allowance in that jurisdiction. In such situations, the adjustment made to the deferred tax asset would have a favorable impact on our effective income tax rate and results in the period such determination was made.

Refer to Note 23 — Taxation in Item 8 of Part II of this Annual Report for additional information regarding our deferred tax assets, including information regarding changes in the related valuation allowance during the year ended December 31, 2025.

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Tax Receivable Agreement Liability

Description

In connection with the consummation of the business combination that formed Hagerty, Inc. in 2021, Hagerty, Inc. entered into a TRA with the Legacy Unit Holders. The TRA provides for payment to the Legacy Unit Holders of 85% of the U.S. federal, state and local cash tax savings realized by Hagerty, Inc. as a result of the increases in tax basis and certain other tax benefits, as outlined in the Business Combination Agreement, upon the exchange of THG units and shares of Hagerty, Inc. Class V Common Stock for shares of Hagerty, Inc. Class A Common Stock or cash. The remaining 15% cash tax savings resulting from the basis adjustments are retained by Hagerty, Inc. The Business Combination Agreement is provided as Exhibit 2.1 to this Annual Report, which is incorporated by reference within Item 15. Exhibits, Financial Statement Schedules.

In connection with the filing of its 2019 income tax return, THG made an election under Section 754 of the IRC for each taxable year in which TRA exchanges occur. This election allows THG to adjust the tax basis of its assets when certain ownership changes or distributions occur. This election cannot be revoked without the permission of the IRS Commissioner and will be in place for any future exchange of THG units.

In general, under the TRA, cash tax savings result in a year when the tax liability of Hagerty, Inc. for the year, computed without regard to the deductions attributable to the amortization of the basis increase and other deductions that arise in connection with the payment of the cash consideration under the TRA or the exchange of THG units and shares of Hagerty, Inc. Class V Common Stock for shares of Hagerty, Inc. Class A Common Stock, would be more than the tax liability for the year taking into account such deductions. Payments under the TRA are due when the Company produces taxable income and the resulting cash tax liability is reduced by deducting the amortization of the basis increase on a filed tax return. The payments under the TRA are expected to be substantial.

Judgments and Uncertainties

The estimation of the TRA Liability is, by its nature, imprecise and subject to significant assumptions regarding the amount and timing of Hagerty, Inc.'s future taxable income. If we do not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, then we would not be required to make the related payment under the TRA. Therefore, we only recognize a liability for the TRA if we determine it is probable that we will generate sufficient future taxable income over the term of the TRA to utilize the related tax benefits. Estimating future taxable income is inherently uncertain and requires significant management judgment.

Based on Hagerty, Inc.'s forecast of future taxable income, as of December 31, 2025, the estimated value of the TRA Liability was $39.8 million, which is reported within "Tax receivable agreement liability" on the Consolidated Balance Sheets.

Effect if Actual Results Differ From Estimates and Assumptions

The estimated value of the TRA Liability may change in future periods due to changes in anticipated future taxable income, changes in applicable tax rates, and other changes in tax attributes that may occur and impact the expected future tax benefits to be received. Any such changes in these factors or changes in our determination of the need for a valuation allowance related to the tax benefits acquired under the TRA could result in a significant change to the estimated value of the TRA Liability recognized on our Consolidated Balance Sheets. Any such changes are recorded as a component of "Interest expense and other, net" in the Consolidated Statements of Operations each period.

Refer to Note 23 — Taxation in Item 8 of Part II of this Annual Report for additional information regarding the TRA Liability and changes in its recorded balance during the year ended December 31, 2025.

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Goodwill

Description

Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired in a business combination. Goodwill is not amortized, but is tested annually for impairment at the reporting unit level as of October 1 and between annual tests if indicators of potential impairment exist. These indicators could include a significant decline in our stock price and market capitalization, a significant change in the outlook for a reporting unit, lower than expected reporting unit operating results, increased competition, legal factors, or the sale or disposition of a significant portion of a reporting unit. For reporting units with goodwill, an impairment loss is recognized for the amount by which the reporting unit's carrying value, including goodwill, exceeds its fair value.

Judgments and Uncertainties

Application of the goodwill impairment test requires judgment, including the identification of reporting units and the determination of the estimated fair value of reporting units. For reporting units with goodwill, we perform a qualitative analysis to determine whether it is more likely than not the fair value of the reporting unit is less than its carrying amount. When assessing goodwill for impairment, our decision to perform a qualitative assessment for an individual reporting unit is based on a number of factors, including the carrying value of the reporting unit's goodwill, the amount of time in between quantitative fair value assessments, macro-economic conditions, industry, and market conditions and the operating performance of the reporting unit. If it is determined, based on qualitative factors, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed, in which we determine the estimated fair value of the reporting unit using a discounted cash flow analysis. This analysis requires significant judgment, including the estimation of future cash flows, which is dependent on internal forecasts, available industry and market data, the estimation of the long-term rate of growth for the reporting unit including expectations and assumptions regarding the impact of general economic conditions on the reporting unit, the estimation of the useful life over which cash flows will occur (including terminal multiples), the determination of the respective weighted average cost of capital and market participant assumptions. Changes in these estimates and assumptions could materially affect the determination of estimated fair value and potential impairment for each reporting unit.

The Company did not recognize any goodwill impairments during the years ended December 31, 2025, 2024, and 2023. As of December 31, 2025, the Company has recorded goodwill of $114.2 million, including $103.6 million attributable to the Marketplace reporting unit.

Effect if Actual Results Differ from Estimates and Assumptions

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be an accurate prediction of the future. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of our reporting units may include such items as: (i) failure to meet business plans; (ii) deterioration of the U.S. and global economies; (iii) an increase in competition; (iv) an increase in interest rates; or (v) other unanticipated events and circumstances that may decrease or delay the projected cash flows or increase the discount rates and could potentially result in an impairment charge.

While historical performance and current expectations have resulted in the conclusion that our goodwill is not impaired, if our assumptions are not realized, it is possible that an impairment charge may need to be recorded in the future. There can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment tests will prove to be an accurate prediction of the future.

New Accounting Standards

New accounting standards are described in Note 2 — Summary of Significant Accounting Policies in Item 8 of Part II of this Annual Report, which are incorporated herein by reference.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of economic losses due to adverse changes in the estimated fair value of a financial instrument as a result of changes in interest rates, equity prices, foreign currency exchange rates and commodity prices. We are exposed to market risks primarily through the investment portfolio supporting our insurance operations, including interest rate risk in fixed maturity securities and credit risk. We do not enter into derivatives for trading purposes.

Interest rate risk

Interest rate risk is the risk that we will incur economic losses due to adverse changes in interest rates. Our available-for-sale securities, debt obligations, and loan portfolio secured by collector cars have interest rate risk.

Available-for-sale securities

The primary market risk to our investment portfolio is interest rate risk associated with investments in fixed maturity securities. Fluctuations in interest rates have a direct effect on the market valuation of these securities. When market interest rates increase, the fair value of our fixed maturity securities decreases. Conversely, as interest rates decrease, the fair value of our fixed maturity securities increases. We manage this interest rate risk by investing in securities with varied maturity dates and by managing the duration of our investment portfolio. The target duration of our investment portfolio is two to four years.

As of December 31, 2025, we held fixed maturity securities with a fair value of $696.3 million. The table below illustrates the sensitivity of the value of our fixed maturity securities with hypothetical changes in interest rates as of December 31, 2025:

in thousands (except percentages)

Debt obligations

As of December 31, 2025, we had approximately $153.4 million of variable rate indebtedness, representing approximately 86% of our total debt outstanding, at an average interest rate during the year ended December 31, 2025 of approximately 5.57%. Based on variable-rate borrowings outstanding as of December 31, 2025, a 100-basis point (or 1.0%) change in our borrowing rates would result in our annual interest payments changing by approximately $1.5 million.

Loan portfolio

We also have a portfolio of loans secured by collector cars of approximately $113.9 million as of December 31, 2025, upon which interest is earned predominately at variable rates including the Prime Rate and Term Secured Overnight Financing Rate. Based on variable-rate loans outstanding as of December 31, 2025, a 100-basis point (or 1.0%) change in our variable rates would result in our annual interest income changing by approximately $0.9 million.

Credit risk

Available-for-sale securities

Credit risk is the potential loss resulting from adverse changes in an issuer's ability to repay its debt obligations. We have exposure to credit risk as a holder of fixed maturity securities. Our risk management strategy and investment policy are designed to invest primarily in investment grade debt and to limit the amount of credit exposure with respect to a single issuer.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements Page No.

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) 69

Consolidated Balance Sheets as of December 31, 2025 and 2024 73

Notes Accompanying the Consolidated Financial Statements 78

Financial Statement Schedules:

Schedule II: Condensed Financial Information of Registrant Parent Company 130

Schedule V: Valuation and Qualifying Accounts 134

All other schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Hagerty, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Hagerty, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, changes in temporary equity and stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the schedules listed in the Index at Item 8 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Reserves for Unpaid Losses and Loss Adjustment Expenses – Refer to Notes 2 and 15 to the financial statements

Critical Audit Matter Description

Reserves for unpaid losses and loss adjustment expenses represent management's best estimate of the ultimate unpaid costs of all reported and unreported losses and loss adjustment expenses incurred as of the balance sheet date. Reserves are reviewed by management quarterly and periodically throughout the year by combining historical results and current actual results.

Given the significant judgments made by management in estimating the ultimate cost of losses and loss adjustment expenses incurred, particularly related to those claims with longer expected cycle times, the related audit effort in evaluating the reserve required a high degree of auditor judgment and an increased extent of effort, including involvement of our actuarial specialists.

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How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to reserves for unpaid losses and loss adjustment expenses included the following, among others:

•We tested the effectiveness of controls related to the reserves for unpaid losses and loss adjustment expenses, including those over the Company’s actuarial estimate.

•We tested the completeness and accuracy of the underlying key data inputs that served as the basis for the actuarial estimate.

•With the assistance of our actuarial specialists, we used the Company’s claims data to develop a range of independent estimates for the reserve for unpaid losses and loss adjustment expenses. We used these independent estimates to assess the reasonableness of the Company’s reserve by comparing our estimates to the Company’s recorded reserve for unpaid losses and loss adjustment expenses.

•We compared the Company’s prior years’ estimates of expected losses and loss adjustment expenses to actual experience during the current year to identify potential bias in the determination of reserves for losses and loss adjustment expenses.

/s/ DELOITTE & TOUCHE LLP

Detroit, Michigan

February 26, 2026

We have served as the Company's auditor since 2019.

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Hagerty, Inc.

Consolidated Statements of Operations

Year ended December 31,

REVENUES: (in thousands, except per share amounts)

EXPENSES:

Restructuring, impairment and related charges, net — — 8,812

Gains, losses, and impairments related to divestitures — (87) 4,013

Loss (gain) related to warrant liabilities, net — 8,544 (11,543)

Net income attributable to non-controlling interest (100,207) (61,286) (7,948)

Accretion of Series A Convertible Preferred Stock (7,555) (7,427) (3,677)

NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS $ 41,463 $ 9,590 $ 16,554

Earnings per share of Class A Common Stock:

Weighted average shares of Class A Common Stock outstanding:

The accompanying Notes are an integral part of these Consolidated Financial Statements.

See Note 24 for information regarding Related-Party Transactions.

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Hagerty, Inc.

Consolidated Statements of Comprehensive Income

Year ended December 31,

in thousands

Other comprehensive income (loss), net of tax:

Change in unrealized loss on interest rate swap — (2,234) (1,060)

Accretion of Series A Convertible Preferred Stock (7,555) (7,427) (3,677)

The accompanying Notes are an integral part of these Consolidated Financial Statements.

See Note 24 for information regarding Related-Party Transactions.

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Hagerty, Inc.

Consolidated Balance Sheets

December 31,

ASSETS in thousands (except share amounts)

Deferred tax assets 43,011 —

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses $ 111,947 $ 58,892

Reserves for unpaid losses and loss adjustment expenses 168,851 168,492

Tax receivable agreement liability 39,829 2,180

Commitments and Contingencies (Note 25) — —

TEMPORARY EQUITY

STOCKHOLDERS' EQUITY

Accumulated other comprehensive income (loss) 1,229 (1,514)

The accompanying Notes are an integral part of these Consolidated Financial Statements.

See Note 24 for information regarding Related-Party Transactions.

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Hagerty, Inc.

Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity

Temporary Equity Stockholders' Equity

in thousands Shares Amount Shares Amount Shares Amount

The accompanying Notes are an integral part of these Consolidated Financial Statements.

See Note 24 for information regarding Related-Party Transactions.

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Hagerty, Inc.

Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity

Temporary Equity Stockholders' Equity

in thousands Shares Amount Shares Amount Shares Amount

The accompanying Notes are an integral part of these Consolidated Financial Statements.

See Note 24 for information regarding Related-Party Transactions.

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Hagerty, Inc.

Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity

Temporary Equity Stockholders' Equity

in thousands Shares Amount Shares Amount Shares Amount

Non-controlling interest capital issued — — — — — — — — — — 779 779

The accompanying Notes are an integral part of these Consolidated Financial Statements.

See Note 24 for information regarding Related-Party Transactions.

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Hagerty, Inc.

Consolidated Statements of Cash Flows

Year ended December 31,

OPERATING ACTIVITIES: in thousands

Adjustments to reconcile net income to net cash from operating activities:

Loss on disposals of equipment, software, and other assets 1,912 500 1,894

Loss (gain) related to warrant liabilities, net — 8,544 (11,543)

(Accretion) amortization of discount and premium, net (4,146) (3,386) 34

Changes in assets and liabilities:

Reserves for unpaid losses and loss adjustment expenses 359 31,985 24,766

INVESTING ACTIVITIES:

FINANCING ACTIVITIES:

Proceeds from issuance of preferred stock, net of issuance costs — — 79,159

Distributions paid to non-controlling interest unit holders (30,257) (6,683) —

Payment of Series A Convertible Preferred Stock dividends (5,600) (5,600) —

Funding of TRA Liability payments (223) — —

Other financing activities 552 — 2,305

The accompanying Notes are an integral part of these Consolidated Financial Statements.

See Note 24 for information regarding Related-Party Transactions.

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Hagerty, Inc.

Notes To Consolidated Financial Statements

1 — Description of Business

Hagerty, Inc. is a holding company and the sole managing member of The Hagerty Group, LLC ("THG"). Hagerty, Inc.'s sole material asset is its ownership in THG, through which all of its business is conducted. In these Notes to the Consolidated Financial Statements, the terms "Hagerty" and the "Company" refer to Hagerty, Inc. and its consolidated subsidiaries unless the context requires otherwise.

Hagerty is a market leader in providing insurance for collector cars and enthusiast vehicles, helping the automotive enthusiast community protect and enjoy their special cars for over 40 years. Through Hagerty's insurance model, the Company operates as a Managing General Agent ("MGA") by underwriting, selling, and servicing collector car and enthusiast vehicle insurance policies on behalf of our insurance carrier partners. The Company then reinsures a significant portion of the risks written by its MGA subsidiaries through its wholly owned subsidiary, Hagerty Reinsurance Limited ("Hagerty Re"). Hagerty Re reinsures risks predominantly from policies issued by Essentia Insurance Company ("Essentia"), a subsidiary of Markel Group Inc. ("Markel"). Hagerty Re's quota share percentage for the risks that it assumes from Essentia has ranged from 25% at the program's inception to 80% as of December 31, 2025, and will increase to 100% in 2026. Markel is a related party to the Company. Refer to Note 24 — Related-Party Transactions for additional information on related parted transactions with Markel. Hagerty's insurance products are complemented by its membership product, Hagerty Drivers Club ("HDC"), its renowned car events, and its media and entertainment platforms.

Hagerty also operates a trusted marketplace where collectors and enthusiasts can buy and sell a wide range of vehicles, from entry level enthusiast vehicles to high value collector cars. Through its marketplace, Hagerty also provides financing solutions by structuring loans secured by collector cars.

Due to the continued revenue growth and recent geographic expansion of the Company's marketplace business, beginning in the fourth quarter of 2025, the Company updated its segment reporting to reflect two operating and reportable segments: Insurance and Marketplace. Previously, Hagerty operated as a single operating and reportable segment. For additional information regarding segment reporting, refer to Note 4 — Segment Reporting and Disaggregated Revenue.

On December 31, 2025, the Company entered into new contractual arrangements and amended the terms of its existing contractual arrangements with Markel and its affiliates. These coordinated transactions with Markel formed an arrangement that became effective January 1, 2026 (the "Markel Fronting Arrangement"). Under the Markel Fronting Arrangement: (i) the Company continues to issue policies through Essentia, with its underwriting authority (including pricing decisions, rate filing, insurance rating, and risk selections) and claims authority expanded to the maximum levels permitted by applicable law; (ii) the Company has assumed increased administrative responsibilities for the policies issued through Essentia; (iii) Hagerty Re controls 100% of the premium and assumes 100% of the risk for policies issued through Essentia; and (iv) Hagerty Re pays an initial fronting fee, representing 2% of written premium, to Markel for administrative support, which incrementally decreases based on the level of written premium in each calendar year.

2 — Summary of Significant Accounting Policies

Basis of Presentation — The Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the regulations of the Securities and Exchange Commission. The Consolidated Financial Statements reflect all normal recurring adjustments and accruals that are, in the opinion of management, necessary for a fair statement of the Company's financial position and results of operations for periods presented.

Beginning with this Annual Report on Form 10-K (this "Annual Report"), the Company presents its Consolidated Financial Statements in accordance with Article 7 of Regulation S-X ("Article 7"), which governs financial reporting for insurance companies. In prior reporting periods, the Company presented its Consolidated Financial Statements in accordance with Article 5 of Regulation S-X ("Article 5"), which is applicable to entities operating in non-specialized industries. The adoption of Article 7 reflects the continued expansion of the Company's insurance operations, including expanded risk assumption under the Markel Fronting Arrangement and the introduction of the Enthusiast+ product.

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The principal changes resulting from the transition to Article 7 include the discontinuation of a classified balance sheet and the reclassification of certain line items on the Consolidated Balance Sheets. In addition, "Net investment income" and "Net investment gains" are now reported as components of revenue within the Consolidated Statements of Operations. Prior period financial information has been recast to conform to the requirements of Article 7. The following table presents a reconciliation of Total revenue as presented in prior periods in accordance with Article 5, to the current presentation in accordance with Article 7:

Year ended December 31,

in thousands

Total revenue presented in accordance with Article 5 $ 1,200,038 $ 1,000,213

Net investment gains 2,223 —

Total revenue presented in accordance with Article 7 $ 1,241,510 $ 1,027,117

Principles of Consolidation — The Consolidated Financial Statements contain the accounts of Hagerty, Inc. and its majority-owned or controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

As the sole managing member of THG, Hagerty operates and controls all of the business affairs of THG and has the sole voting interest in, and controls the management of, THG. Accordingly, Hagerty consolidates THG in its consolidated financial statements, resulting in a non-controlling interest representing the economic interest in THG held by other parties. As of December 31, 2025 and 2024, Hagerty, Inc.'s economic ownership of THG was 29.1% and 26.1%, respectively. Refer to Note 20 — Stockholders' Equity for additional information related to the non-controlling interest in THG.

The financial statements of THG are consolidated by the Company under the voting interest method in accordance with Accounting Standards Codification ("ASC") Topic 810, Consolidations ("ASC 810"). Non-controlling interest is presented separately in the Consolidated Statements of Operations, the Consolidated Statements of Comprehensive Income, the Consolidated Balance Sheets, and the Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity.

Use of Estimates — The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements, as well as the reported amounts of revenue and expenses during the reporting period. Although the estimates are considered reasonable, actual results could materially differ from those estimates.

Significant estimates made by management include, but are not limited to: (i) the reserves for unpaid losses and loss adjustment expenses, including incurred but not reported ("IBNR") claims (see Note 15); (ii) the valuation of deferred income tax assets (see Note 23); (iii) the amount of the liability associated with the tax receivable agreement entered into in connection with the consummation of the business combination that formed Hagerty, Inc. in 2021 (the "TRA") (the "TRA Liability") (see Note 23); and (iv) the fair values of the reporting units used in assessing the recoverability of goodwill. Although some variability is inherent in these estimates, management believes that the current estimates are reasonable in all material respects. These estimates are reviewed regularly and adjusted as necessary. Adjustments related to changes in estimates are reflected in the Company's results of operations in the period during which those estimates changed.

Foreign Currency Translation — The functional currency of entities operating outside of the United States ("U.S.") is the principal currency of the economic environment in which the entity primarily generates and expends cash, which is generally the local currency. Foreign currency denominated assets and liabilities are translated into U.S. dollars at current rates of exchange as of the balance sheet date. Foreign currency denominated income and expense items are translated into U.S. dollars at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in "Foreign currency translation adjustments" in the Consolidated Statements of Comprehensive Income. Foreign currency transaction gains and losses are recorded within "Interest expense and other, net" in the Consolidated Statements of Operations.

Investments — Fixed maturity securities are classified as available-for-sale under ASC Topic 320, Investments - Debt Securities. Equity securities are accounted for following ASC Topic 321, Investments - Equity Securities. Available-for-sale and equity securities are recorded on the Consolidated Balance Sheets at their fair value.

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Interest and dividends are recognized when earned and recorded within "Net investment income" in the Consolidated Statements of Operations. Premiums and discounts are amortized or accreted, respectively, over the lives of the related fixed maturity securities using the effective interest method and recorded within "Net investment income" in the Consolidated Statements of Operations.

Realized investment gains and losses from sales of fixed maturity securities are recorded within "Net investment gains" in the Consolidated Statements of Operations. Realized and unrealized gains and losses on equity securities are recorded within "Net investment gains" in the Consolidated Statements of Operations. The Company uses the first in, first out method to determine the cost of the fixed maturity securities sold.

Unrealized gains and losses on fixed maturity securities, net of income taxes, are excluded from earnings and recorded within "Change in net unrealized gain (loss) on available-for-sale investments" in the Consolidated Statements of Comprehensive Income.

On a quarterly basis, fixed maturity securities with unrealized losses are reviewed to determine whether the decline in fair value is attributable to a material credit loss. The factors considered in this assessment include the extent to which the fair value has been less than amortized cost, current market interest rates, whether the unrealized loss is credit-driven or a result of changes in market interest rates, and the general financial condition of the issuer. If a material credit loss is noted, an allowance is established and the credit loss is recorded in the Consolidated Statements of Operations. There was no allowance for credit losses recorded for the Company's available-for-sale securities as of December 31, 2025 and 2024.

Refer to Note 5 — Investments and Note 6 — Fair Value Measurements for additional information regarding the Company's investment portfolio.

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents — The Company holds unrestricted and restricted cash and cash equivalents at multiple financial institutions. The combined account balances at one or more of these financial institutions may exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage limit of $250,000. The Company is subject to a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage limits. The Company believes the risk is not significant given the size and credit worthiness of the financial institutions at which the funds are held. Highly liquid investments convertible to a known amount of cash and with an original maturity of three months or less are considered to be cash equivalents.

Cash and cash equivalents that are restricted as to withdrawal or use are recorded as restricted cash and cash equivalents. The carrying value of the Company's restricted cash and cash equivalents approximates its fair value. Refer to Note 3 — Supplemental Balance Sheet and Cash Flow Information for additional information regarding the Company's restricted cash and cash equivalent balances.

The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as of December 31, 2025, 2024, and 2023:

December 31,

in thousands

Receivables — Accounts receivable primarily consists of amounts due from customers for insurance policies sold by the Company's MGA subsidiaries that will ultimately be remitted to our insurance carrier partners. Premiums receivable consists of ceded premiums due to Hagerty Re from insurance carriers. Commissions receivable primarily consists of profit sharing commissions due to the Company's MGA subsidiaries from insurance carriers. As of December 31, 2025 and 2024, the allowance for expected credit losses related to the Company's receivable balances was not material based on management's quarterly risk assessment, which takes into consideration historical trends, the current economic environment, the creditworthiness of the debtor, and other relevant factors.

Deferred Acquisition Costs, net — Deferred acquisition costs include the ceding commissions paid by Hagerty Re to our insurance carrier partners for the risk assumed under quota share reinsurance agreements with those carriers. Deferred acquisition costs are recorded net of commissions received by Hagerty Re for the risk ceded to various reinsurers and the net acquisition costs are deferred and recognized ratably over the term of the related policies, which is generally 12 months.

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Deferred acquisition costs are considered to be recoverable if the sum of expected future earned premiums exceeds expected future claims and expenses. Anticipated investment income is also a factor in the recoverability analysis. If, as a result of the recoverability analysis, a loss is determined to be probable, a premium deficiency reserve is recognized in the period in which such determination is made. At December 31, 2025 and 2024, deferred acquisition costs were considered fully recoverable and no premium deficiency reserve was recorded.

Reinsurance — Hagerty Re purchases catastrophe reinsurance to protect its capital from large catastrophic events. In addition, Hagerty Re enters into quota share reinsurance agreements with various reinsurers and purchases facultative reinsurance to cede a portion of its physical damage exposure related to certain policies and vehicles. Reinsurance recoverables are amounts due to Hagerty Re from reinsurers for paid and unpaid loss and loss adjustment expenses. The amount of any reinsurance recoverable is determined by applying the contract terms to incurred losses arising from a qualifying event.

Prepaid reinsurance premiums consists of the unearned portion of premiums ceded by Hagerty Re to various reinsurers and are initially recorded on the Consolidated Balance Sheets and subsequently recognized on a pro-rata basis over the term of the related reinsured policies as a reduction to "Earned premium, net" in the Consolidated Statements of Operations.

Refer to Note 16 — Reinsurance for additional information regarding the Company's reinsurance coverage.

Notes Receivable — Notes receivable primarily includes loans underwritten by Broad Arrow Capital LLC ("BAC") and its subsidiaries that are secured by collector cars, as well as accrued interest associated with the loans. Notes receivable are recorded on the date the loan is funded based on the amount stipulated in the underlying agreement. Finance revenue on the loans is recognized when earned based on the amount of the outstanding loan, the applicable interest rate on the loan, and the length of time the loan was outstanding during the period.

Notes receivable are recorded net of an allowance for expected credit losses, which is based on management's quarterly risk assessment and takes into consideration a number of factors including the level of historical losses for similar loans, the quality of the collateral, the loan-to-value ("LTV") ratio of each loan, management's overall assessment of the current circumstances and risks related to each loan, and, to a lesser extent, the circumstances related to each borrower. As of December 31, 2025 and 2024, the allowance for expected credit losses related to Notes receivable was not material. The valuation of collector cars is inherently subjective, and the realizable value of collector cars often fluctuates over time. Refer to Note 7 — Notes Receivable for additional information.

Costs to Obtain Contracts with Customers — The Company expects that commission costs incurred by its MGA subsidiaries in order to obtain new insurance policies are recoverable. As such, the incremental commission paid on new policies over renewal policies is recorded within "Other assets" on the Consolidated Balance Sheets when they are paid and are subsequently amortized to "Sales expense" in the Consolidated Statements of Operations based on the average expected life of the underlying insurance policy.

Inventory— Inventory primarily consists of vehicles that have been purchased opportunistically for resale by subsidiaries of the Broad Arrow Group, Inc. ("Broad Arrow"). Inventory is valued on a specific identification basis at the lower of cost or the Company's estimate of net realizable value (i.e., the expected sale price upon disposition). Inventory is recorded within "Other assets" on the Consolidated Balance Sheets. If there is evidence that the estimated net realizable value of a specific item held in inventory is less than its carrying value, a write down is recorded within "Sales expense" in the Consolidated Statements of Operations to reflect a revised estimate of net realizable value on the Consolidated Balance Sheets.

Software-as-a-Service— During the preliminary project stage, implementation costs related to software-as-a-service ("SaaS") arrangements are expensed as incurred to "Salaries and benefits" or "General and administrative expenses" in the Consolidated Statements of Operations. During the development phase, direct implementation costs related to SaaS arrangements are capitalized and recorded within "Other assets" on the Consolidated Balance Sheets. Capitalized SaaS implementation costs are amortized over the term of the underlying service agreement. The Company monitors SaaS implementation projects on an ongoing basis and capitalizes the costs of any major improvements or new functionality. Once the software is fully implemented, ongoing maintenance costs are expensed as incurred.

Property and Equipment — Property and equipment are recorded at cost and depreciated over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvement. Estimated useful lives range from three to seven years for computers, automobiles, and office furniture. Buildings and building improvements have an estimated useful life of 39 years. Upon sale or retirement, the cost and related accumulated depreciation of the assets disposed are derecognized, and any resulting gain or loss is reflected in the Consolidated Statements of Operations. Annual depreciation is calculated based on the straight-line method. Maintenance, repair costs and minor renovations are expensed as incurred, while expenditures that increase the asset's estimated useful life are capitalized.

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Leases — A contract is or contains a lease if it conveys the right to control the use of identified property, plant or equipment in exchange for consideration. At commencement, leases are evaluated for classification as an operating lease or finance lease. For leases with a term greater than twelve months, a right-of-use ("ROU") asset and lease liability is recognized on the Consolidated Balance Sheets at the commencement date of the lease based on a calculation of the present value of lease payments over the lease term using an estimated incremental borrowing rate. The estimated incremental borrowing rate is determined based on several factors including company specific credit rating, lease term, impact of collateral, general economics and the interest rate environment. The Company's real estate leases contain both lease and non-lease components, which are accounted for as a single lease component. For leases containing fixed rent escalation clauses, the escalators are factored into the determination of future minimum lease payments. The Company has the option to extend most of its lease agreements, with renewals ranging from one to 20 years. As it is not reasonably certain that the Company will exercise these renewal options, they are not included in the lease terms for purposes of calculating the Company's lease liability.

The Company's lease agreements may contain variable costs such as common area maintenance, operating expenses, real estate taxes, or other costs. Variable lease costs are expensed as incurred within "General and administrative expenses" in the Consolidated Statements of Operations. The Company's lease agreements generally do not contain any residual value guarantees or restrictive covenants.

The Company's primary operating leases consist of office space. ROU assets and lease liabilities are recorded within "Other assets" and "Other liabilities", respectively, on the Consolidated Balance Sheets. ROU assets are amortized over the life of the lease to "General and administrative expenses" in the Consolidated Statements of Operations. Refer to Note 10 — Leases for additional information.

Intangible Assets — Intangible assets are recorded at cost, which represents their fair value as of the acquisition date. Fair value is estimated using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets are amortized over the estimated life of each intangible asset, unless the estimated life is deemed to be indefinite.

Intangible assets primarily consist of internally developed software, acquired insurance policy renewal rights, trade names, and acquired customer relationships, as well as indefinite lived state insurance licenses acquired in conjunction with the acquisition of Drivers Edge. Amortization is recorded using the straight-line method over the estimated life of the intangible asset as it approximates the pattern over which economic benefits are realized. The Company expenses internally developed software costs incurred during the preliminary project stage and, upon management approval, capitalizes direct development costs including the associated payroll and related costs for employees working on development, as well as third party contractor costs.

Refer to Note 14 — Goodwill and Intangible Assets for additional information regarding intangible assets and Note 11 — Acquisition for additional information regarding the acquisition of Drivers Edge.

Goodwill — Goodwill represents the excess of the cost of a business combination over the fair value of net assets acquired, including identifiable intangible assets. Goodwill is not amortized, but is tested annually for impairment at the reporting unit level as of October 1 and between annual tests if indicators of potential impairment exist.

For reporting units with goodwill, the Company performs a qualitative analysis to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. When assessing goodwill for impairment, the Company's decision to perform a qualitative assessment for an individual reporting unit is based on a number of factors, including the carrying value of the reporting unit's goodwill, the amount of time in between quantitative fair value assessments, macro-economic conditions, industry and market conditions, and the operating performance of the reporting unit. If it is determined, based on qualitative factors, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed, in which the Company determines the estimated fair value of the reporting unit using a discounted cash flow analysis. This analysis requires significant judgment, including the estimation of future cash flows, which is dependent on internal forecasts, available industry and market data, the estimation of the long-term rate of growth for the reporting unit including expectations and assumptions regarding the impact of general economic conditions on the reporting unit, the estimation of the useful life over which cash flows will occur (including terminal multiples), the determination of the respective weighted average cost of capital, and market participant assumptions.

As of December 31, 2025, the Company had goodwill of $114.2 million, including $103.6 million attributable to the Marketplace reporting unit. The Company did not recognize any goodwill impairments during the years ended December 31, 2025, 2024, and 2023.

Impairment of Long-Lived Assets — The Company reviews all long-lived assets that have finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable in accordance with ASC Topic 360, Impairment and Disposal of Long-Lived Assets ("ASC 360"). If it is determined the carrying amount of the asset (or asset group) is not recoverable, an impairment loss is recognized within total expenses in the Consolidated Statements of Operations in the period in which such determination is made.

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The determination of the recoverability of a long-lived asset (or asset group) is based on an estimate of the undiscounted cash flows resulting from the use of the asset (or asset group) and its eventual disposition. If the carrying value of the long-lived asset (or asset group) is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent that the carrying value exceeds the fair value of the long-lived asset (or asset group). Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as necessary.

Advance Premiums and Due to Insurers — Advance premiums represents the aggregate amount of gross written premium received by the Company's MGA subsidiaries prior to the effective date of the underlying policies. Due to insurers represents the amount of premium owed to the insurance carrier, net of the commission earned by the Company, after the policy becomes effective.

Losses Payable — Losses payable represents the amount due to insurance carriers by the Company for paid and billed losses as of the balance sheet date.

Reserves for Unpaid Losses and Loss Adjustment Expenses — Reserves for unpaid losses and loss adjustment expenses represents management's best estimate of the ultimate unpaid cost of all reported and unreported losses and loss adjustment expenses incurred as of the balance sheet date. The Company does not discount its reserves for unpaid losses and loss adjustment expenses to reflect the time value of money.

Estimating the ultimate cost of claims and claims expenses is an inherently complex and subjective process that involves many variables and a high degree of judgment. Reserves are reviewed by management quarterly and periodically throughout the year by combining historical results and current actual results. When estimating reserves, the Company's actuarial reserving group utilizes several actuarial reserving methods which consider historical claim reporting patterns, claim cycle time, claim frequency and severity, claims settlement practices, adequacy of case reserves over time, seasonality, and current economic conditions. Because actual experience can differ from key assumptions used in estimating reserves, there may be significant variation in the development of reserves and the amount of actual losses and loss adjustment expenses ultimately paid in the future. Any adjustments to the Company's reserves for unpaid losses and loss adjustment expenses, and any related reinsurance recoverables, are recognized in the Consolidated Statements of Operations in the period in which management makes the determination that an adjustment is required.

Refer to Note 15 — Reserves for Unpaid Losses and Loss Adjustment Expenses for additional information regarding the methodologies used to estimate loss and loss adjustment expense reserves.

Tax Receivable Agreement Liability — In connection with the consummation of the business combination that formed Hagerty, Inc. in 2021, Hagerty, Inc. entered into a TRA with Hagerty Holding Corp. ("HHC") and Markel (together, the "Legacy Unit Holders"). The TRA provides for payment to the Legacy Unit Holders of 85% of the U.S. federal, state and local cash tax savings realized by Hagerty, Inc. as a result of the increases in tax basis and certain other tax benefits as outlined in the Business Combination Agreement upon the exchange of THG units and shares of Hagerty, Inc. Class V Common Stock for shares of Hagerty, Inc. Class A Common Stock or cash. The remaining 15% cash tax savings resulting from the basis adjustments are retained by Hagerty, Inc. The Business Combination Agreement is provided as Exhibit 2.1 to this Annual Report, which is incorporated by reference within Item 15. Exhibits, Financial Statement Schedules.

The Company accounts for the TRA in accordance with ASC 450, Contingencies ("ASC 450"), with a liability recorded when it is probable that a payment under the TRA will be required and the amount of that payment can be reasonably estimated. The TRA Liability is measured on a gross, undiscounted basis based on projected future cash tax savings expected to be realized, multiplied by the contractual payment percentage. The estimated value of the TRA Liability is reassessed each reporting period. Changes in estimates of future taxable income, enacted tax rates, or the realization of related deferred tax assets are recognized in earnings in the period of change. Any such changes are recorded as a component of "Interest expense and other, net" in the Consolidated Statements of Operations in the period in which they occur.

Transactions with Legacy Unit Holders occurring after the date of the business combination that formed Hagerty, Inc. in 2021, including exchanges of THG units and shares of Class V Common Stock for shares of Class A Common Stock or cash, give rise to additional TRA liabilities. Consistent with ASC 450, these incremental obligations are recorded on a gross, undiscounted basis at the time of the exchange, with a corresponding adjustment to "Additional paid-in capital" on the Consolidated Balance Sheets. Payments under the TRA are classified as Financing Activities in the Consolidated Statements of Cash Flows.

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Warrant Liabilities — Prior to the warrant exchange transaction that was completed in the third quarter of 2024, which resulted in the settlement of all outstanding warrants, the Company accounted for its warrants in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). The warrants did not meet the criteria for equity treatment and as such, were recorded as a liability at their fair value. The warrant liability was subject to remeasurement each reporting period with the change in fair value between reporting periods recorded within "Loss (gain) related to warrant liabilities, net" in the Consolidated Statements of Operations. Refer to Note 6 — Fair Value Measurements for additional information related to the Warrant Exchange.

HGTY US Equity

HGTY · 10-K · period ended 2025-12-31

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

HGTY US Equity☆

HGTY · 10-K · period ended 2025-12-31

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

HGTY US Equity