Hagerty, Inc.

over to Jay Koval with Investor Relations. Mr. Koval, you may now begin.

Thank you, Operator. Good morning, everyone, and thank you for joining us to discuss Hagerty's results for the first quarter of 2024. I'm joined this morning by McKeel Hagerty, Chief Executive Officer and Chairman, and Patrick McClymont, Chief Financial Officer. During this morning's conference call, we will refer to an accompanying presentation that is available on Hagerty's investor relations section of the company's corporate website at investor.hagerty.com. Our earnings release, accompanying slides, and letter to stockholders covering this period are also posted on the IR website. Our 8K filing is also available there, along with our earnings press release and other materials. Today's discussion contains forward-looking statements and non-GAAP financial metrics, as described further in slide two of the earnings presentation. Forward-looking statements include statements about our expected future business and financial performance and are not promises or guarantees of future performance. They are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of material risks and important factors that could affect our actual results, please refer to those contained in our filings for the SEC, which are also available on our investor relations website and at sec.gov. The appendix of the presentation also contains reconciliations of our non-GAAP metrics to the most directly comparable GAAP measures that are further supplemented by this morning's 8K filing. And with that, I will turn the call over to McKeel.

Thanks, Jay, and good morning, everyone. We appreciate you taking the time to join Hagerty's first quarter 2024 earnings call. The winter chill in northern Michigan and across much of North America is behind us. Plants are blooming and cars are firing up as we begin the 2024 driving season. To us, it is the best time of the year. Hagerty may be a leading provider of insurance for collectible vehicles in North America, but insurance does not define us. The love of cars does, and that is the key competitive advantage we have utilized to differentiate our approach and to position us to deliver high rates of compounding profitable growth in the years to come. So let me start by thanking our 1,700 Hagerty employees. This team of highly engaged car people has never been better aligned around our strategic growth ambitions and is well positioned to deliver great results for stockholders. Let us dig into the key highlights for our first quarter results shown on slide three. This includes commission revenue jumped to 19% fueled by written premium gains and strong underwriting results. Our brand and value proposition fuel consistent mid to high single-digit growth in new business count. Insurance rates also increased by 3%. This is well below the 10% average rate increase we are seeing from most of the major national insurance carriers as they look to pull down their loss ratios following a period of elevated losses. Those higher average rates out there are causing more people to shop than ever. This is a good thing for us, as it helps us power our direct-to-consumer business. Earned premium for our risk-taking entity, Hagerty Reinsurance, jumped 29% due to written premium gains and last year's increase in quota share to 80%. Membership, marketplace, and other revenue grew 18%. This was powered by 58% growth in Marketplace as we steadily increased the number of cars listed on our online Marketplace, and we more than doubled sales at our Amelia live auction. Marketplace is off to a great start to the second quarter with over $15 million in sales at the Porsche sale with Air Water in Costa Mesa last week. Moving to profitability, during the first three months of this year, our operating margins jumped 1,200 basis points, resulting in a $23 million improvement in net income and a $21 million jump in adjusted EBITDA. You may recall that in 2023, we grew total revenue by 27%, while significantly improving profitability, delivering a year-over-year increase in net income of $26 million and adjusted EBITDA of $90 million. The first quarter of 2024 marked the continuation of Hagerty's margin expansion story as we have thoughtfully re-engineered our business processes. Slide 4 shares a few examples of how this work positions Hagerty for sustained multi-year operating leverage. First, we are better leveraging our performance marketing team to efficiently acquire new customers. Activating our increasingly strong data assets, we have reallocated funds into the traditionally slower shoulder seasons to effectively deliver search and social ads to the surge of insurance shoppers. We are also investing in additional television advertising around our 40th anniversary campaign, Keepers of the Flame. Early data from this campaign suggests that consumer response is outperforming our expectations. With unaided brand awareness of 16%, we have a long runway to build our fan base far beyond the current 1.4 million policyholders. Second, we have been making changes to our member service center process to serve our members more effectively, reducing handle times and freeing up resources for continued member growth. There are ample opportunities to increase straight-through processing and automation, in addition to leveraging AI tools to improve speed and efficiency of service. We have also moved our MSC team to a quarterly bonus structure that increases our ability to incentivize and recognize top performers. And third, we have identified potential savings within our claims organization. While we are extremely proud of Hagerty's consistently stable combined ratio of under 90%, losses and loss adjustments totaled $221 million last year, our second largest expense behind Seeding Commission. So we are adding resources to our in-house claims team to help deliver great claims experiences for customers with minimal leakage. Simply put, these initiatives complement our cost containment efforts and position Hagerty for high rates of flow through of incremental revenue into profits over the coming years. Slide five is a reminder of our 2024 priorities, including. First, we are improving loyalty to drive renewals and referrals. This represents a highly profitable way we can grow Hagerty given the lower loss ratios of season policies and lower acquisition costs from referrals. Second, we are enhancing the member experience in a cost-effective and efficient way, leveraging technology to fuel margin expansion as we scale up. Third, we will continue building Hagerty Marketplace into the most trusted and preferred place to buy, sell, and finance collectible vehicles. This includes ramping up our online marketplace, which is now selling five cars per day with industry-leading views per vehicle and bids per vehicle, and sell-through rates of 70% to 80%. And fourth, we are increasing our flexibility and control over our underwriting profits, including the CNIC insurance company acquisition and launch of an Enthusiast Plus product to better serve the post-1980s vehicle cohort. We are off to a great start in 2024 and are confident in our ability to grow revenue in the mid-teens with even stronger rates of profit growth. Improved margins and cash flow generation will allow us to invest in the competitive advantage that will lengthen our leadership position and create substantial value for shareholders over the coming years. Let me now turn the call over to Patrick to run through the first quarter results and 2024 financial outlook in more detail.