Engagement Drives Collector and Membership Car Insurance Sales
Hobbies offer people an escape during difficult times. Companies that provide infrastructure that helps them profit from these activities can also foster engagement that enables them to sell goods and services.
For example, in recent years, Hagerty has built an ecosystem that includes not only its automotive enthusiast-focused specialty insurance, but also a club, live events, digital media and marketplaces, all dedicated to collector vehicles and the enthusiasts who own them.
These are designed to help automotive enthusiasts of all kinds enjoy the hobby, Hagerty CEO McKeel Hagerty said Monday (May 9) during the company’s quarterly earnings call.
“But they also allow Hagerty to earn a greater share of consumer discretionary spending and create a sense of community and belonging among car enthusiasts,” he added, “which is important because the larger this community grows, the more discretionary income car people spend within our ecosystem.
Provide a safe haven in times of economic downturn
In a presentation released in conjunction with the earnings call, the company said that as of March 31, it had seen 9% year-on-year growth in the number of paying members in its Hagerty Drivers Club, 11% in the number total active members, 16% of written premiums. and 30% of total turnover.
“As we’ve seen in past economic downturns, the universe of vehicle enthusiasts tends to be a safe haven where people spend available discretionary funds and their free time,” Hagerty said.
To strengthen its presence in this universe, during the first quarter the company acquired two other automotive event brands, signed a partnership that will place its cars in a popular motorsport video game, expanded its market place for the buying and selling collector cars, acquired a collector’s car software provider, launched a mileage-checking app to reduce insurance costs, and “reinvented” its enthusiast car-sharing platform and driving app. collector car appraisal.
See both inflation headwinds and tailwinds
The automotive hobby and insurance industry have proven resilient during economic downturns, Hagerty said, noting that in his nearly 20 years as the company’s CEO he has seen the crash dot-com, the economic crisis, several catastrophic weather events and the pandemic.
“What I can say, in general, is this: our business model is incredibly resilient to economic downturns, both from a growth and profitability perspective,” Hagerty said.
Speaking of current inflation, Hagerty said it provides both headwinds and tailwinds. On the one hand, it increases wage pressures, transport costs and other expenses. But inflation also increases the value of vehicles, allowing insurers to raise premiums for new customers and renewals.
“In 2021, we saw nearly 70% of the 40,000 vehicle makes and models we track in our assessment tools grew by nearly 10%,” Hagerty said.
Monetize the addressable market
Hagerty said the collector car ecosystem faces the same global uncertainty as any other industry, with inflationary pressures and higher interest rates and supply chain issues impacting the transportation of vehicles, roadside assistance and repair.
Hagerty said the company will remain focused on controlling what it can control and managing the business through different economic cycles, adding that the company expects to see continued double-digit growth in premiums written. .
“We will continue to bring our members a host of new offers that will attract and retain car enthusiasts,” Hagerty said in a press release, “allowing us to further monetize our sustainable addressable market as our members expand. their use of Hagerty-based products and services.