XML 72 R56.htm IDEA: XBRL DOCUMENT v3.25.4

Taxation (Tables)

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Schedule of Income (Loss) before Income Tax, Domestic and Foreign

For the years ended December 31, 2025, 2024, and 2023, income before taxes includes the following components:

						Year ended December 31,
						2025						2024						2023
						in thousands
United States						$	24,050					$	108,589					$	62,030
Foreign (1)						115,132						(14,907)						(17,258)
Total						$	139,182					$	93,682					$	44,772

(1)    The Company adopted ASU 2023-09 on a prospective basis, and as a result, for year ended December 31, 2025, foreign income is presented based on the country of domicile which results in Hagerty Re's income before taxes included in the Foreign jurisdiction. For the years ended December 31, 2024 and 2023, Hagerty Re's income was included in the United States based on country of tax jurisdiction.

Schedule of Components of Income Tax Expense

For the years ended December 31, 2025, 2024, and 2023, income tax (benefit) expense consists of the following components:

			Year ended December 31,
			2025						2024						2023
			in thousands
Current:
Federal			$	23,786					$	12,075					$	13,664
State			377						368						8
Foreign			297						7						—
			$	24,460					$	12,450					$	13,672
Deferred:
Federal			$	(30,586)					$	2,846					$	2,899
State			(3,917)						83						22
Foreign			—						—						—
			$	(34,503)					$	2,929					$	2,921
Total			$	(10,043)					$	15,379					$	16,593

Schedule of Effective Income Tax Rate Reconciliation

For the year ended December 31, 2025, the income tax benefit reflected in the Consolidated Statements of Operations differs from the tax computed by applying the statutory U.S. federal rate of 21% to "Income tax benefit (expense)" as follows:

						Year ended December 31, 2025
						in thousands (except percentages)
Income tax expense at U.S. federal statutory rate						$	29,228					21.0		%
State and local income taxes, net of federal income tax effect (1)						(5,098)						(3.7)		%
Tax credits						(588)						(0.4)		%
Nontaxable and nondeductible items:
Net impact of noncontrolling interest and non-partnership operations on partnership outside basis						(2,424)						(1.7)		%
Other						404						0.3		%
Effect of cross-border tax laws:
U.S. tax on foreign insurance income						27,087						19.5		%
Other						40						—		%
Foreign branch income						(2,136)						(1.5)		%
Changes in valuation allowance						(33,280)						(23.9)		%
Changes in unrecognized tax benefits						123						0.1		%
Effect of changes in tax laws or rates enacted in the current period						1,109						0.8		%
Other						(628)						(0.5)		%
Foreign tax effects:
Bermuda:
Statutory tax exemption						(27,087)						(19.5)		%
Canada						1,670						1.2		%
U.K.:
Valuation allowance						1,931						1.4		%
Other						(832)						(0.6)		%
Other foreign jurisdictions						438						0.3		%
Income tax benefit						$	(10,043)					(7.2)		%

(1)    California, New York, Florida, Pennsylvania, and Michigan represent the majority of the tax effect in this category.

For the years ended December 31, 2024 and 2023, income tax expense reflected in the Consolidated Statements of Operations differs from the tax computed by applying the statutory U.S. federal rate of 21% to "Income tax benefit (expense)" as follows:

			Year ended December 31,
			2024												2023
			in thousands (except percentages)
Income tax expense at U.S. federal statutory rate			$	19,673					21.0		%				$	9,402					21.0		%
State taxes			659						0.7		%				(232)						(0.5)		%
Net impact of noncontrolling interest and non-partnership operations on partnership outside basis			(8,759)						(9.3)		%				5,000						11.2		%
Foreign rate differential			2,407						2.6		%				(529)						(1.2)		%
Change in valuation allowance			3,485						3.7		%				393						0.9		%
Loss (gain) related to warrant liabilities, net			1,794						1.9		%				(2,424)						(5.4)		%
Permanent items			89						0.1		%				914						2.0		%
Effect of changes in tax rates			(4,400)						(4.7)		%				4,018						9.0		%
Other, net			431						—		%				51						—		%
Income tax expense			$	15,379					16.0		%				$	16,593					37.0		%

Schedule of Deferred Tax Assets and Liabilities

At December 31, 2025 and 2024, the tax effects of temporary differences that give rise to significant portions of the deferred tax provision are as follows:

			December 31,
			2025						2024
Deferred tax assets:			in thousands
Discount on provision for losses and loss adjustment expenses			$	1,442					$	1,343
Unearned premiums			16,385						14,239
Tax receivable agreement			10,110						—
Unrealized foreign currency gain			190						597
Excess tax basis			159,189						148,089
Net operating loss ("NOL") and other carryforwards			39,047						28,854
Other			2,083						480
Gross deferred tax assets			228,446						193,602
Less: valuation allowance			(165,748)						(176,167)
Total net deferred tax assets			$	62,698					$	17,435
Deferred tax liabilities:
Deferred acquisition costs			$	(37,640)					$	(32,858)
Unrealized foreign currency gain			(188)						(388)
Unrealized investment gain			(3,258)						(56)
Intangible assets			(1,093)						(1,309)
Other			(997)						(889)
Total deferred tax liabilities			(43,176)						(35,500)
Net deferred tax assets (liabilities)			$	19,522					$	(18,065)

Schedule of Unrecognized Tax Benefits

						December 31,
						2025						2024
						in thousands
Beginning of period						$	—					$	—
Additions based on tax positions related to the current year						57						—
Additions for tax positions of prior years						66						—
End of period						$	123					$	—

X

- References

No definition available.

+ Details

Name:	us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-9

+ Details

Name:	us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-2

+ Details

Name:	us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12A
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12A

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

+ Details

Name:	us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(1)(Note 1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

+ Details

Name:	us-gaap_ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the change in unrecognized tax benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 217
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-217

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-15A

+ Details

Name:	us-gaap_ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration