XML 21 R9.htm IDEA: XBRL DOCUMENT v3.24.3
Revenue
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue
2 — Revenue

Disaggregation of Revenue — The tables below present Hagerty's revenue by distribution channel, as well as a reconciliation to total revenue for the three and nine months ended September 30, 2024 and 2023. Commission and fee revenue and contingent underwriting commission ("CUC") revenue earned from the agent distribution channel includes revenue generated through Hagerty's relationships with independent agents and brokers. Commission and fee revenue and CUC revenue earned from the direct distribution channel includes revenue generated by Hagerty's employee agents.

Prior to 2024, the Company's MGA subsidiaries have earned a base commission of approximately 32% of written premium, as well as an additional contingent commission of up to 10% annually. In December 2023, the Company's alliance agreement and associated agency agreement with Markel Group, Inc. ("Markel") was amended to increase the base commission rate on the personal lines United States ("U.S.") auto business to 37% and to adjust the contingent commission to range from -5% to a maximum of +5% of annual written premium. This amendment resulted in a smaller proportion of total revenue being attributable to contingent commissions during the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023.
Three months ended September 30, 2024
AgentDirectTotal
in thousands
Commission and fee revenue$57,857 $47,606 $105,463 
Contingent commission revenue5,997 4,701 10,698 
Membership revenue— 14,800 14,800 
Marketplace and other revenue— 26,727 26,727 
Total revenue from customer contracts63,854 93,834 157,688 
Earned premium165,686 
Total revenue$323,374 

Three months ended September 30, 2023
AgentDirectTotal
in thousands
Commission and fee revenue$44,387 $37,388 $81,775 
Contingent commission revenue11,825 9,573 21,398 
Membership revenue— 13,835 13,835 
Marketplace and other revenue— 18,781 18,781 
Total revenue from customer contracts56,212 79,577 135,789 
Earned premium139,785 
Total revenue$275,574 
Nine months ended September 30, 2024
AgentDirectTotal
in thousands
Commission and fee revenue$164,737 $136,597 $301,334 
Contingent commission revenue17,869 14,614 32,483 
Membership revenue— 42,385 42,385 
Marketplace and other revenue— 57,188 57,188 
Total revenue from customer contracts182,606 250,784 433,390 
Earned premium474,917 
Total revenue$908,307 

Nine months ended September 30, 2023
AgentDirectTotal
in thousands
Commission and fee revenue$123,046 $104,229 $227,275 
Contingent commission revenue33,506 27,191 60,697 
Membership revenue— 39,528 39,528 
Marketplace and other revenue— 43,172 43,172 
Total revenue from customer contracts156,552 214,120 370,672 
Earned premium384,498 
Total revenue$755,170 
The following tables present Hagerty's revenue disaggregated by geographic area, as well as a reconciliation to total revenue for the three months ended September 30, 2024 and 2023:

Three months ended September 30, 2024
U.S.CanadaEuropeTotal
in thousands
Commission and fee revenue$96,688 $6,952 $1,823 $105,463 
Contingent commission revenue10,544 — 154 10,698 
Membership revenue13,844 955 1 14,800 
Marketplace and other revenue25,229 205 1,293 26,727 
Total revenue from customer contracts146,305 8,112 3,271 157,688 
Earned premium165,686 
Total revenue$323,374 

Three months ended September 30, 2023
U.S.CanadaEuropeTotal
in thousands
Commission and fee revenue$73,891 $6,422 $1,462 $81,775 
Contingent commission revenue21,360 — 38 21,398 
Membership revenue12,942 893 — 13,835 
Marketplace and other revenue17,779 229 773 18,781 
Total revenue from customer contracts125,972 7,544 2,273 135,789 
Earned premium139,785 
Total revenue$275,574 
The following tables present Hagerty's revenue disaggregated by geographic area, as well as a reconciliation to total revenue for the nine months ended September 30, 2024 and 2023:

Nine months ended September 30, 2024
U.S.CanadaEuropeTotal
in thousands
Commission and fee revenue$277,613 $18,878 $4,843 $301,334 
Contingent commission revenue32,235 — 248 32,483 
Membership revenue39,592 2,792 1 42,385 
Marketplace and other revenue52,911 1,230 3,047 57,188 
Total revenue from customer contracts402,351 22,900 8,139 433,390 
Earned premium474,917 
Total revenue$908,307 

Nine months ended September 30, 2023
U.S.CanadaEuropeTotal
in thousands
Commission and fee revenue$206,099 $17,379 $3,797 $227,275 
Contingent commission revenue60,590 — 107 60,697 
Membership revenue36,865 2,663 — 39,528 
Marketplace and other revenue40,366 741 2,065 43,172 
Total revenue from customer contracts343,920 20,783 5,969 370,672 
Earned premium384,498 
Total revenue$755,170 
Refer to Note 12 — Reinsurance for information regarding "Earned premium" recognized under ASC Topic 944, Financial Services - Insurance ("ASC 944").
Contract Assets and Liabilities — The following table is a summary of the Company's contract assets and liabilities as of September 30, 2024 and December 31, 2023:

September 30,December 31,
20242023
in thousands
Contract assets$13,581 $75,891 
Contract liabilities$54,724 $47,651 

Contract assets, which are reported within "Commissions receivable" on the Condensed Consolidated Balance Sheets, consist of CUC receivables, which are earned throughout the year and have historically been settled by a cash payment from the insurance carrier in the first quarter of the following year. As a result of its amended alliance agreement and associated agency agreement with Markel, beginning in 2024, 80% of the CUC receivables from Markel are now being settled monthly rather than on an annual basis. This amendment resulted in a significant decrease in the contract assets balance compared to the prior year.

Contract liabilities consist of cash collected in advance of revenue recognition and primarily includes the unrecognized portion of HDC membership fees, the unrecognized portion of the advanced commission payment received from State Farm Mutual Automobile Insurance Company ("State Farm"), and, to a much lesser extent, cash collected in advance of the completion of Marketplace private sales. Refer to Note 21 — Related-Party Transactions for additional information regarding the Company's master alliance agreement with State Farm.