Insuring Rare and Collectible Cars and Boats with McKeel Hagerty

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio News.

**Barry Ritholtz** (0:08)
This week on the podcast, another extra special guest, McKeel Hagerty is Chairman and CEO of Hagerty Specialty Insurance. Fascinating company, they took a little niche, wooden boat insurer and turned it into a publicly traded company by embracing the community around collector cars, trucks, boats, et cetera. I thought this conversation was really quite fascinating, not just as a car guy, but as a business guy. And I think you will also, with no further ado, my conversation with Hagerty's McKeel Hagerty.
And McKeel Hagerty, welcome to Bloomberg.

**McKeel Hagerty** (0:56)
Thanks for having me.

**Barry Ritholtz** (0:58)
So let's start with your background. You get a BA in English and Philosophy from Pepperdine, and then you get a Masters in Theology at St. Vladimir's Orthodox Theological Seminary. What was the plan, to become a priest?

**McKeel Hagerty** (1:14)
Yeah, I kind of, I think about my academic career in a couple of phases. Like I was an entrepreneur from the time I was young. I had a bunch of businesses when I was very young, and thought I would go study business in college, and I ended up falling in love with philosophy and literature and all these things. Was philosophy and English major. I was a good student. And I thought I'd get my PhD, but I needed a little break to work on languages and some things. And I learned about St. Vladimir's, which is just north of New York here. It's up in kind of near Rye or Scarsdale. And it was this incredible experience because I got to work on my languages.
I learned a lot about leadership actually at the seminary because there's some pretty extraordinary individuals there. And then there is no doubt about it, you are there to study to become a priest. And while that was not my driving reason to go there, they kind of, it's a little bit like Michael Corleone, they kind of drag you in and before you know it, you're suddenly thinking about becoming a priest.
I didn't become a priest because then I moved on and started my doctoral work in philosophy up in Boston and did not complete that because the family business called. And I had worked in it during the summers up until then and with mom and dad and my two sisters and all of a sudden I found myself no longer thinking about exams and a dissertation and all those things and thinking about this really cool business.

**Barry Ritholtz** (2:45)
So let's talk about this business.
The hagiography is your parents, Frank and Louise. They started Hagerty Insurance Agency in Traverse City, Michigan, for what I never would have guessed was an actual business, collector wooden boats. Like, are there enough collector wooden boats to sustain a full business?

**McKeel Hagerty** (3:07)
There are enough wooden boats to insure, to sustain a very small family business with a few employees. It was kind of a retirement gig for my mom and dad. They had had a general insurance agency and they sold that, and they wanted something else to do. But there were a couple of principles that were in the back of their mind, which was they wanted a national business instead of a local one. They wanted one that was in a niche rather than sort of general purpose. And they wanted one that could have real sustainability over a long period of time. So, wooden boats was an unoccupied business space. So, literally unmet need. They found they matched the unmet need with an interest in that underlying interest in wooden boats and in cars. My dad was a wooden boat, vintage boat guy and also a car guy.
And so, this was just the fun, combining the business knowledge with a passion. And again, my sisters and I kind of all helped out when it was much smaller.
And we kind of stumbled in to the car insurance business, which was much, much larger than the wooden boat business.

**Barry Ritholtz** (4:10)
Even the collector car businesses, orders of magnitude.

**McKeel Hagerty** (4:13)
Orders of magnitude larger, millions of vehicles.

**Barry Ritholtz** (4:15)
But let's not jump quite far ahead.
You and your dad used to work on cars rebuilding projects. You mentioned you had a couple of side hustles, lawn mowing, things like that.

**McKeel Hagerty** (4:28)
Yeah, my apple orchard.

**Barry Ritholtz** (4:30)
You spent 500 bucks buying a 1967 Porsche 911 S when you were 13?

**McKeel Hagerty** (4:38)
Yes.

**Barry Ritholtz** (4:39)
Like I wouldn't be allowed to buy a car at 13
I was lucky I had a bike. And then you and your father rebuild this.

**McKeel Hagerty** (4:46)