The insurance scion who’s out to save human driving

McKeel Hagerty’s parents were into wooden boats and saw an unmet need to underwrite them. Hagerty, however, has been a car nut from day one. When the family’s marine insurance business finally began to offer auto policies in 1991, he saw a chance to join the fold and, along with his sisters, Tammy and Kim, stomp on the pedal.

Hagerty, 54, today is CEO of the Traverse City, Michigan-based company. The eponymous insurance business has slowly expanded over the years, launching a magazine, a video platform, a valuation tool, and a line of storage facilities. The company also bought some of the most famous classic car shows (known as concours) in the world. In early December, Hagerty went public via a special purpose acquisition company, a few days before debuting a marketplace of its own where members can buy and sell vehicles.

As Hagerty sees it, car culture — at least the analog, valve-and-spark-plug version the company has put its stamp on — is under existential threat from electric and autonomous technology. Today, every part of the business is about saving that culture for the millions of people out there who care about more than just what propels a car.

We sat down with Hagerty to talk about the future of driving, making the case for classic cars and his overarching corporate mission: to make sure that at least some of us will still be driving 50 years from now.

Hagerty is essentially an insurance company; why do all this other stuff like publish magazines, buy concours and facilitate peer-to-peer car sales?

I grew up consuming automotive media and going to car events. I thought I was just an enthusiast and it wasn’t until I was really professionally in the space that I realized those things are really very much part of the car world. For us to serve our bigger purpose, which is to save driving and car culture, we were going to have to become a media and entertainment business along the way. Ironically, we really built our brand to be an automotive one — not an insurance one, not a financial one.

And all of that sells policies?

Yes, and it makes for very sticky customers and members over time. Insurance is a cool business, but it’s not very fun to talk about. It’s a great recurring revenue business, but so is a membership model, so is a subscription model. I’m really proud of some of our work online — our YouTube stuff is pretty awesome.

How threatened is car culture?

The talk track around the autonomous vehicle that a lot of companies and a lot of smart people seem to be pushing is that the driver is what’s at fault here — that human drivers are not to be trusted. I’m not saying cars shouldn’t be safe and drivers shouldn’t be safe. I’m just saying that the reverse of it is this reductionist view that the only thing people care about is what propels a car.

Our view of the car world is, for people who actually love cars — and there are tens of millions of them out there, we have the data to show it — the concept of mobility is not their highest reason for owning cars. There is signaling and then experience and even legacy — other meanings of what a vehicle is for in people’s lives. We’re not trying to save the four-hour commute, we’re trying to save the Sunday afternoon drive or the motorsport event.

Is there a real fear that technology someday will shrink where we are allowed to drive?

Yeah. Henry Ford did not make the horse go extinct; he and all his peers just kind of took those horses out of daily public transportation. But a car carries around more than just your physical body. It carries around your ego and your identity and memories and thoughts of who you want to be. It’s just like fashion or the other things that you own in your life that are signaling devices.

How much can Hagerty’s efforts help?

Car club membership has been kind of statistically declining in the past couple of decades. The level of engagement has changed and some of it has gone online. We have to create an organization that’s big enough and well-capitalized enough to be able to do some bigger moves and try to knit these things together because some of it isn’t cheap.

I don’t envision some like big NRA-level thing. This is not about creating a gigantic lobbying organization, although I would not be surprised if we end up partnering with or helping fund additional efforts in government affairs to make sure that we don’t get accidentally legislated off the roads. For this to exist 30, 50, 100 years from now, it’s not going to happen on its own.

The pandemic seems to have triggered a renaissance in classic car collecting. Why do you think?

Commuting mileage certainly went down significantly over the last couple of years; pleasure mileage went way up. And while auctions were significantly lower from a result standpoint, during COVID that peer-to-peer buying of cars went up. People said, ‘If I’m going out for a drive on Sunday, I’d much rather be in a car that I think is fun.’

What do you make of the electric restomod trend — turning classic cars into EVs?

I’m excited about it. I’m a big fan of the processes where it doesn’t completely butcher the underlying car. In fact, we have a couple of cars in our fleet that our teams have restored that we use for driving experiences and we’re looking at getting a second one and turning that into an electric vehicle.

Do you have any EVs in your garage?

No, I do not. I am in the process of ordering a Porsche — the Taycan. My first car was a Porsche, so I thought I should try one of those.

To contact the author of this story:
Kyle Stock in Skillman at kstock6@bloomberg.net