Insuring Rare and Collectible Cars and Boats with McKeel Hagerty

Barry sits down with CEO and Chairman of Hagerty, McKeel Hagerty. They discuss how he transformed the family boat insurance business into a “sexy” driver forward business. Barry and McKeel also discuss their love of collectable cars and his love of his first car, a Porsche, that he bought at the age of 13. See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

• 0:00Speaker 00

  At Brookfield, we invest in the thing behind the thing behind the next big thing. Our focus across infrastructure, energy, real estate, private equity, and credit is helping to build the backbone of the global economy. We combine deep operational expertise with disciplined long-term investing, uncovering value, and partnering alongside clients to shape tomorrow's economy today. Learn how you can own what's next at Brookfield.com/own. This is not an offer to sell or investment advice. Investing involves risks, including loss of capital.

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• 1:53Speaker 04

  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.

• 2:40Speaker 04

  McKeel Hagerty, welcome to Bloomberg.

• 2:42Speaker 05

  Thanks for having me.

• 2:43Speaker 04

  So let's start with your background. You get a BA in English and Philosophy from Pepperdine, and then you get a Master's in Theology at St. Vladimir's Orthodox Theological Seminary. What was the plan? To become a priest?

• 2:59Speaker 05

  Yeah, I kind of, I think about my academic career in a couple of phases. Like, I was, 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, you know, I got to work on my languages.

• 3:42Speaker 05

  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, the kind of, it's a little bit like Michael Corleone, they kind of drag you in and, you know, before you know it, you're suddenly thinking about becoming a priest. I didn't become a priest because then I, 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, you know, 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

• 4:27Speaker 05

  all those things and thinking about this really cool business.

• 4:30Speaker 04

  So, so let's talk about this, 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.

• 4:46Speaker 05

  That's right.

• 4:47Speaker 04

  Like, is, are there enough collector wooden boats to sustain a full business?

• 4:52Speaker 05

  There is, there are enough wooden boats to insure, to sustain a very small family business, you know, with a few employees. It was kind of a retirement gig for my mom and dad. They, they had had a general insurance agency and they sold that and they wanted something else to do and they thought, 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 like sort of general purpose. And they wanted one that could have like 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.

• 5:34Speaker 05

  My, my dad was a wooden boat, vintage boat guy and also a car guy. And so, you know, 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 into the car insurance business, which was much, much larger than the wooden boat business.

• 5:56Speaker 04

  Even the collector car businesses, orders of magnitude.

• 5:59Speaker 05

  Orders of magnitude, larger, millions of vehicles.

• 6:01Speaker 04

  But let's not jump quite far that 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.

• 6:14Speaker 05

  Yeah, my apple orchard.

• 6:15Speaker 04

  You, you spent 500 bucks buying a 1967 Porsche 911S when you were 13?

• 6:24Speaker 05

  Yes.

• 6:25Speaker 04

  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.

• 6:32Speaker 05

  That's right. I will also note, it was the only really good car deal I've ever done in my life. So, just for what it's worth, so.

• 6:38Speaker 04

  Was, I'm going to assume that was the spark that started your enthusiasm for cars?

• 6:44Speaker 05

  Yeah, it was. And, you know, my dad was a do it yourselfer hobbyist restorer guy in the garage. And both my sisters also restored cars. They were older than I was with him. And then I was the third along and, and we convinced this older gentleman in our town to sell us this 911S for 500 bucks. And I had to mow an awful lot more lawns and to sell a lot more apples out of my orchard to buy the parts to restore the car. But by the time I could drive, it was ready. And.

• 7:12Speaker 04

  Good planning.

• 7:13Speaker 05

  It was great planning. And I can tell you, there was nobody in my high school driving a Porsche. So I would sneak it into the teacher's parking lot because no one would believe that a student had a Porsche.

• 7:22Speaker 04

  That's right. That's hilarious.

• 7:24Speaker 05

  But it's also like, back then in the eighties, cars like that were not expensive. They were not considered to be necessarily that valuable. They were just kind of cool, older cars. And so we kind of approached it as a family, like, hey, these are, you can get a lot of car for not a lot of money and you can have something really fun to enjoy. And so that was just my life growing up.

• 7:44Speaker 04

  I love that the 300SL from the 50s were being sold at a depreciated price in the 60s and 70s.

• 7:51Speaker 05

  Oh, of course.

• 7:52Speaker 04

  It's astonishing.

• 7:53Speaker 05

  Well, the most valuable car today, people will tell you, is a Ferrari GTO, 1962. They're worth, you know, tens and tens of millions of dollars. But in 19, in 1970s, you could buy them for 15 grand. They were nothing. And now they're 50 million, 60 million dollars.

• 8:08Speaker 04

  Unbelievable. That, that 911S you restored, still have it?

• 8:12Speaker 05

  I still have it.

• 8:13Speaker 04

  Still drive it?

• 8:14Speaker 05

  Of course. It's my first car out every season and the last one I put away.

• 8:18Speaker 04

  Wow, that, that's amazing. We, we could spend a lot of time talking about what else you drive and like. We'll get to that later. I'm curious, when did you first realize Hagerty could become something a whole lot larger than a niche wooden boat insurer?

• 8:35Speaker 05

  Well, we had already started the boat, or the car business in the early 1990s. I, I had, I've had a couple of aha moments. And this one, I remember it like we were sitting here today. And it was the fall of 1995. I was doing my doctoral work in Boston and we were reading Plato's Republic in Greek. Okay. So I'm up in Boston College, we're working on Plato's Republic in Greek. That's a big slog.

• 8:59Speaker 04

  Yeah.

• 9:00Speaker 05

  There's a lot of Greek, I can tell you. And I was trying to help out the family business kind of from a distance. And the challenge with insurance, it's, insurance is an incredible industry. It's, it's stable. It's, there's a lot more interesting stuff to it than people think, but it is just not very sexy to talk about. Nobody loves talking about insurance. And even with these big brands and stuff today, like, they still don't want to talk about it very much. And so I was literally sitting in this Plato's Republic class and on the side of my notebook, I wrote this thing, like, if we would just stop acting like an insurance business and start acting more like a club for car owners, it would just transform the conversation that you're having with people. Because then you're acting more like a car person instead of an insurance person trying to sell a car person something.

• 9:46Speaker 05

  And I literally wrote this idea of like, turn Hagerty into a car club. I wrote it in my notebook and I closed my notebook. I went home that night to my apartment and I dropped out of my PhD program.

• 9:56Speaker 04

  Right then.

• 9:57Speaker 05

  And I went home the next week.

• 9:58Speaker 04

  Well, let me validate that, not that you need, as a public company, need my validation. Full disclosure, I have a few of my cars insured with Hagerty. I'm a member of the club. I get the Drivers Club magazine. But I'm, it's obvious in hindsight, oh, of course, you're going to focus on this niche that is kind of ignored.

• 10:21Speaker 05

  Yes.

• 10:22Speaker 04

  By the major insurance companies. How challenging was it to convince the rest of the fam, hey, this is the way to go? We're not an insurance company selling to car collectors. We're car people satisfying a few of the box, checking a few of their boxes.

• 10:39Speaker 05

  It took me a few years.

• 10:40Speaker 04

  Yeah.

• 10:40Speaker 05

  You know, we were a very close family. It was really fun to work together with everybody in those early days. My dad retired after kind of that late 90s. My mom retired shortly thereafter. I was working with my sisters. So they kind of gave me the enough rope to go test it out, that if we just changed the dialogue and acted just, we're going to build an automotive branded business that happens to sell insurance and we're going to do it around this membership concept. It wasn't like no one had ever done something like that. You know, if you think in the early days, AAA was kind of like that, the motor club. They kind of, you know, they've, they're very different than that now. If you were to even think of something like AARP, which is, you know, a different sort of segment, like there is a, you know, they're in it, they sell a lot of insurance and they

• 11:25Speaker 05

  they treat this group of people, USAA, serving military family, people and families. It just, nobody had ever done it in a business like ours. And so it took a little while to convince them that that was the way to go to market and we could change the way we were thinking. But you mentioned something, there was another piece in this, which was the next aha. And the next aha was that most of these cars were insured by the big insurance companies. So think State Farm, Allstate, you know, today, Progressive, Geico, everybody. And, you know, we're a little company and we're a tiny family business. Like, how the heck are you going to compete against these monsters? And so after we got the club kind of up and running, I realized, well, what if we just partnered with these companies rather than competing against them?

• 12:10Speaker 05

  And said, look, we're, we're going to do one thing and one thing only. We're going to be expert in these cars. We know the customers really well. We're building a really big, rich bunch of data. And what if we partnered with them? And so the first big partnership like this, we landed, oh, 22, 23 years ago, and that was with Allstate. And Allstate's huge, getting huge company. I knew they insured hundreds of thousands of these cars.

• 12:35Speaker 04

  Been out from Sears so long ago.

• 12:37Speaker 05

  Exactly. Lots of, you know, lots of interesting things in that company. And I convinced, I met the CEO at the time and just through kind of people helped connect us. And I said, look, I think I can make you better at this one tiny little thing if you just give us a chance. And they're still a partner today, still grow, that program grows every year. And now we've just moved through the entire insurance industry. We've partnered, you know, virtually with all of the big insurance companies. And so today, if you go, you know, insure your home and your auto and everything with one of them, but you have a vintage car, collector car, whatever you want to call it, that usually comes to us. And so the big scalability of the business was, one, show up like a club, like this member organization. Two, partner rather than to compete.

• 13:21Speaker 05

  And if you can part, you know, because if you're, if you're small, it's impossible to compete against a huge company. But if you partner with them, it changes the game.

• 13:31Speaker 04

  Well, when you say it's impossible to compete, one of the fascinating things about insuring an old vet or an old Porsche is, you know, any of the big firms are going to charge you 1,500, 2,500 a year. You guys for, for, all right, so I have a 67 vet, which is actually my least favorite car to drive. I want to say.

• 13:54Speaker 05

  Which, which motor? I got to ask.

• 13:55Speaker 04

  The 327, but with a stick. Nassau blue over white.

• 14:00Speaker 05

  Very nice.

• 14:00Speaker 04

  Spectacular. But it's a pig to drive, but it doesn't matter because I think Progressive, it was like 2,200. You guys were 500 and change. Because of the data, you guys know what, how often these are driven, know the value, know they're really not going to get stolen. It's pretty.

• 14:20Speaker 05

  That's right.

• 14:20Speaker 04

  As much as Gone in 60 Seconds made it look sexy. Everybody knows these cars, their Vins, where they are, especially something rare and valuable, which the vet is not. It's really fascinating that nobody else saw this until you guys did.

• 14:41Speaker 05

  Yeah.

• 14:41Speaker 04

  How did the pricing model come along?

• 14:44Speaker 05

  Well, it's, you know, you know, and you talked about you drive your car, but you probably don't drive it very much. You probably have daily drivers that, you know, you drive more and you, you know, are less concerned about where you park it and that sort of thing. And, you know, my late mother passed away just two years ago. I remember asking her even, I'd ask her every year, her memory wasn't so great towards the end of her life, like, Mom, what made this business special? And she would just say, because people take good care of their toys.

• 15:09Speaker 04

  Of course.

• 15:10Speaker 05

  And that is the core emotional nugget of this business. You know, the people have a toy, they spent real money on it and they take good care of it. And wherever there is care, there is better insurance risk. So you can charge less. You charge less, you know, you can build marketing around that, you can get a little bit of momentum going.

• 15:27Speaker 04

  But not just a little less. It's not like we're beating them by 10%. It's a fraction of, of what you pay for regular insurance.

• 15:34Speaker 05

  Well, right. And look, you're the typical 67 Corvette owner, probably drives that car 1,000, maybe 1,500 miles a year, some years less, some years less.

• 15:42Speaker 04

  If they have half the guys in my car group, and they're almost all guys, but not, not exclusively, some of these guys have 10, 20, 30 cars.

• 15:52Speaker 05

  Exactly.

• 15:53Speaker 04

  So if they're driving a car, it's something different, maybe they're putting 500 miles a year on each car at most.

• 16:01Speaker 05

  So like one of the things you asked about pricing, so not only is the pricing on the physical car in less expensive with us, on the liability too. And it's exactly to that point. You can only drive one car at a time.

• 16:12Speaker 04

  Right.

• 16:13Speaker 05

  Liability follows the person, not the car. And so we, we had an ad very early on in the program. We had, there was a now late collector out in the Pacific Northwest with over 2,000 cars. And we said, we put a name, his face on one of our ads and he said, here's Harold LeMay, our worst nightmare, because he has 2,000 cars, but we charge him only one time for liability.

• 16:35Speaker 04

  So how do you, is that a fleet insurance? How do you do something?

• 16:38Speaker 05

  Kind of like that, yeah.

• 16:39Speaker 04

  Like if someone has more, and, and I think the line I heard about tattoos applies to cars, two tattoos is either too few or too many. And if you have half a dozen or a dozen cars, it's probably too many to manage yourself, but too few to hire a full-time Jay Leno-like guy to run it.

• 17:00Speaker 05

  That's right. Most people are space limited.

• 17:03Speaker 04

  Right.

• 17:03Speaker 05

  If they have enough money to be into it, they end up buying everything that they can afford and still store.

• 17:09Speaker 04

  Right.

• 17:09Speaker 05

  So, you know.

• 17:10Speaker 04

  The store is the problem.

• 17:10Speaker 05

  The storage is the problem.

• 17:11Speaker 04

  I'm waiting for permission to build a garage.

• 17:13Speaker 05

  There you go.

• 17:14Speaker 04

  A detached garage, as opposed to my regular built-in garage. And that, if that gets approved by the town, that's going to be both dangerous and expensive.

• 17:25Speaker 05

  Well, I'm going to love it though.

• 17:26Speaker 04

  Yeah.

• 17:26Speaker 05

  Because then I'll have more to insure for you.

• 17:28Speaker 04

  That's right. That's six more cars storage for you guys. Really, really interesting. Coming up, we continue our conversation with McKeel Hagerty, CEO of the specialty insurance firm, talking about how he built the company into a one and a half billion dollar revenue driver. I'm Barry Ritholtz. You're listening to Masters of Business on Bloomberg Radio.

• 17:52Speaker 00

  At Brookfield, we invest in the thing behind the thing behind the next big thing. Our focus across infrastructure, energy, real estate, private equity and credit is helping to build the backbone of the global economy. We combine deep operational expertise with disciplined long-term investing, uncovering value and partnering alongside clients to shape tomorrow's economy today. Learn how you can own what's next at Brookfield.com/own. This is not an offer to sell or investment advice. Investing involves risks, including loss of capital.

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  Some people treat ChatGPT like some kind of smart search engine and some use it to get work done. ChatGPT work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting work mode, available on Plus and Pro plans.

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• 20:07Speaker 04

  I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is McHale Haggerty. He is the chairman and CEO of Haggerty Collector Car Insurance. The firm insures every collectible vehicle and a handful of boats for more than almost 3 million collectors. So 2025 revenues of 1.5 billion, 1.3 billion in written premium, a record 371,000 new members, net income plus 91%. This is a real publicly traded company, HGTY.

• 20:48Speaker 05

  Yes.

• 20:49Speaker 04

  Wow.

• 20:50Speaker 05

  I used to have hair when we started all of that, but things are going well.

• 20:54Speaker 04

  So I guess if you're not pulling your hair out of your head, you're not public. Let's talk about how you've driven this. One of the interesting insights that seems to have shaped your strategy was that collector cars aren't just financial assets, they're emotional assets. You describe them as favorite toys. How did that shape how the firm developed?

• 21:21Speaker 05

  Well, we started in the simplest possible way, which we were an insurance agency. You might have mentioned that even early in the first intro. And that's true. That's the easiest way to kind of get into one of these things. As I mentioned, we started with kind of a specialty product, which was insuring special cars. The insurance policy forms were unique, our pricing, we had a unique approach. We had this Drivers' Club model that started really helping that compounding aspect of it. But one of the big pieces that I guess I dreamed of is that if we actually started taking real risk and became the insurance company itself, not just an agency selling policies for somebody else, it would be the same customer coming in, but we'd have so

• 22:05Speaker 05

  much more of a chance to really build the revenue behind it. So the other big piece after, if my first aha was Drivers' Club, second aha was really realizing we needed to partner rather than to compete with the big insurance companies, it was how do we start taking risk? So that's been a multi-year, really decade-long journey that we started in 2017, got that up and running, and it was really a big key piece of how we went public in 2021. And that is that we were going to, we had, everybody knew we had a unique angle on this market, that our economics looked great in the business, but that we could realize even that much more. And so that's really been the next big piece of all of this, and it all kind of compounds

• 22:50Speaker 05

  on itself. Because if you insure a car, you, we use the club to kind of engage people. You mentioned reading the Hagerty Drivers' Club magazine. I mean, that is, by the way, I don't think the word insurance is mentioned in that magazine anywhere.

• 23:06Speaker 04

  No, not at all.

• 23:07Speaker 05

  It's a car magazine.

• 23:08Speaker 04

  It's Cars and Roads, really.

• 23:09Speaker 05

  Yes, and it is the now highest circulation car magazine in the world.

• 23:13Speaker 04

  No kidding?

• 23:14Speaker 05

  It is, yeah.

• 23:15Speaker 04

  I did not know that. That's really, that's really interesting. So the evolution from insurance to an automotive lifestyle brand goes beyond the club membership, goes beyond the magazine, events, auctions, valuation data. Walk us through how that all evolved.

• 23:34Speaker 05

  Yeah, I think, and I was a big fan of car magazines, I was a big fan of automotive media. I mean, that's how I read my way into understanding the car world and going to events. And I always remember somebody told me once that if you're going to go into a niche business that you're really proud of, you kind of need to have, you need to have the high ground on your side. And for me, the high ground was if I could have a media property that where we would kind of have that intellectual high ground, that would help. The other piece is the data aspect of it. When I was growing the business and team, we have incredible teams, we're out there trying to figure it out, valuing these cars was so tricky, because there was a lot of opinions about what cars were worth, but not a lot of really good data.

• 24:19Speaker 05

  And so as we were investing in the media pieces, talking about cars and entertaining people, we built the data resources. We call it our automotive intelligence group. We have by far the richest sets of data about how to value these things, and it's down to that VIN or serial number. You mentioned, how does a big insurance company, why didn't they do it? And I remember this conversation years ago in one of those partner discussions where I mentioned the CEO was a car guy, really wanted to kind of compete with us, wasn't sure if he wanted to partner with us. And I said, well, do you know what a 1969 Camaro is? And he said, I sure do. He's kind of pretty happy with himself. And I said, you may not know that in 1969, the Camaro came in 147 different variants.

• 25:04Speaker 05

  And that year, the least expensive one was worth about 11 grand, and the most valuable one was worth about 1.1 million, and you can't tell the difference by looking at them from the outside. You have to understand what that serial number is. And I said, we built a patented serial number decoder for all cars pre-1981, so that we could understand our universe and start providing that data. And that's why our partners like us, but it's a real asset to have that kind of data and then build on it every year. You mentioned 371,000 new customers. We'll do quite a bit more than that in 2026. Those are all just, it's not just insurance or revenue, it's also data coming our way. What are people buying? What are they insuring them for? What do they sell? When somebody sells a car, it's also a data point.

• 25:48Speaker 05

  And so for us, that kind of data piece, and again, it's all a big, not just because I'm a car person, I view it as a flywheel. It's a flywheel, and it all kind of spins, and insurance is a beautiful thing, but the rest of it speeds up the flywheel.

• 26:02Speaker 04

  Yeah, to say the very least. So the valuation tools you have are really interesting. The bull market list you have has become very influential. I actually reference some of your valuation tools in a chapter on my book on selection bias. Every time some car goes for a new record high, there's always a bunch of media coverage, and they talk about, look at what a great investment this is. And it's like, no, that's all survivorship bias. Show me the other 10. Don't show me what was the best car of the past 50 years. What car are you going to buy now to put away for the next 50 years? That's a much harder question, because you don't know the answer. But your valuation tools have been really helpful, that sort of stuff.

• 26:47Speaker 04

  How did you build that capability? Is it simply just, hey, every data point we come across from clients, we're going to suck into a database and figure out?

• 26:57Speaker 05

  That was exactly it. I mean, if most media outlets that weren't part of our world, if they were covering the space, they were using a lot of anecdotal information, kind of dealer-fed information, or just looking at public auctions. And I love public auctions, too. Like, you can learn a lot from watching what all the different auction companies do. And now with so many good online places, it's like even more data. But what we realized with our scale is like, we just had way more data points than all of that. Because again, people buying cars, insuring them with us, adding, deleting, it was just this big flow. And it took a lot of people a lot smarter than I am to build all the, not just the database stuff, but the analytics capability around it.

• 27:41Speaker 05

  And now with AI, it's even better. And then as we started realizing we could get other data sources that help us validate even more, not just in the US, but outside of the US, it's really been a fun part of the business. It's, I'll tell you what, it's a smart team, and I love learning from them. They teach me stuff every day that I need to know.

• 28:01Speaker 04

  So you mentioned auctions and online auctions, in addition to Bring a Trailer and Cars and Bids and P Car. You guys are now going to get into online auctions for your clients' cars, or are you just partnering with someone?

• 28:17Speaker 05

  Oh, no, no. We have our own, yeah, Hagerty Marketplace platform, which is online auctions and then also...

• 28:25Speaker 04

  Now, you've had online classifieds for a long time. How rapidly is the auction side growing?

• 28:30Speaker 05

  It's growing rapidly. I mean, we just, we have such a supply that you, we have a lot, we have way more supply than you think. And if you think about some of those other great companies, like Bring a Trailer's been such a darling in this space, Cars and Bids, the number two in the US. But there's a supply and demand balance that everybody has to strike. Because if you flood a digital marketplace with too much supply, then the bidders go away. And so, and if the bidders go away, then nobody's happy, the bidders won't put their cars on it. So it's this, it's a fast build, but it's steady. The live auction side of the business, Broad Arrow, which was an acquisition we did after going public, that's a remarkable business, because I had followed that industry for

• 29:15Speaker 05

  a long time around the world. But it's all about getting the right team. And in my mind, because I'm very protective of our brand and our reputation, we had to have the kind of team that wasn't prepared to build the number one live auction business, but they have to do it in a way that I'm proud of. And I'm not saying that it's all good or bad, but I wanted to be, I wanted to be very proud of the outcome, because things will go wrong, you have to make things right for customers. Sometimes cars that people bring to you to sell aren't described exactly as they actually are, and you have to find that out and politely tell them, well, I'm not sure this is a million-dollar car, it's a $100,000 car. And, you know, sorry, if you want us to sell for $100,000, we will, but we're not selling

• 29:59Speaker 05

  it for a million, because it's our reputation, too. And so, again, the way I think about it now is, most people come to us to insure a car. Then they buy the membership thing and we engage them and do media and a lot of fun stuff, invite them to our events. And about every seven years, on average, somebody buys or sells a car. And that's where I want to be there and present in their minds so that we help them in that transactional side. And plus, you've probably been to auctions or have watched them on television. Is they're fun. Like, car auctions are super fun. You know, it's live, it's vibrant, it's interesting. Sometimes there's multimillion dollar cars up there selling that you can't even believe anybody would pay multimillion dollars for

• 30:40Speaker 05

  this car. And we do that, too. I mean, that's why we have Broad Arrow, we connect it with some of our concourse events. In many cases, they're around the world. We just had our Broad Arrow auction at the concourse at Villadest, the Villadest concourse of Deleganza. And that was a really successful sale and super cool place to have an auction right on Lake Como.

• 31:01Speaker 04

  Yeah, in Italy. Look beautiful. You've been a judge at Pebble Beach for a while.

• 31:07Speaker 05

  Twenty-five years. I think this is my twenty-fifth year.

• 31:11Speaker 04

  And I know there was an affiliation with one of the local concourses here. Maybe it's Greenwich?

• 31:15Speaker 05

  Greenwich, yeah, that is an event we own. So we produced that just recently. So.

• 31:19Speaker 04

  Yeah, that's a, it's too close to a holiday weekend. Otherwise, I would be there.

• 31:25Speaker 05

  Oh, you gotta come.

• 31:26Speaker 04

  It's, I'm usually out at the beach on Memorial Day weekend. But, but we'll circle back to that. I'm also a big fan of your YouTube channel. I really like Jason Camista's work. I've learned a lot about cars that I think I know. And then he does a deep dive into a particular model. And I'm like, I didn't know that about the Toyota Supra. Who would have, who would have guessed? How did YouTube become such a major part of your brand?

• 31:55Speaker 05

  Well, it's, it's one of the, well, it's really the de facto platform for people watching kind of introductory level automotive content. And obviously, lots of brands are putting stuff out there. But what we realized is, if you think about the big sort of arc of how people have learned about or consumed automotive media, where it shifted since the 90s was magazines were, you know, the main platform for a long time. Then when you got, you know, the first dedicated cable network, which was

• 32:28Speaker 04

  Auto Week.

• 32:29Speaker 05

  Auto Week, Speed Vision, you know, you got some of those. You started seeing auctions on there. But then a lot of that content started migrating to YouTube. But what I wanted to do was do it like as the same high quality like we were doing in the magazine. So hire total pros, shoot the stuff really well, you know, great cameras, great locations, all of that stuff.

• 32:49Speaker 04

  It is obvious high production value. Like, there are a lot of YouTube channels that are kind of interesting, cars or otherwise. But the appeal has always been two iPhones and a wireless mic and

• 33:05Speaker 05

  A GoPro.

• 33:06Speaker 04

  cobble something together. Right. I've seen a bunch of channels that they're, they're using these, not necessarily the GoPros.

• 33:14Speaker 05

  Right, right.

• 33:15Speaker 04

  You guys really put a lot of thought and a lot of time, effort, and money into it.

• 33:21Speaker 05

  We do, and they're not all just drag races. Nothing wrong with drag races. I like them, too. It kind of is a, it's a kind of data point about what makes a car cool. But I think Jason just takes it to a whole new level. For example, we also have, you know, one of our, one of our shows. And by the way, we also have, you know, we have a fast channel on Samsung TV, on Amazon Prime, you know, our content is available out there like a digital, you know, television show. Our Barn Fine Hunter show for years, you've probably seen it, which is, you know, this incredible talent in Tom Cotter going around and finding great cars in barns and kind of doing the big reveal, like an Antiques Roadshow kind of concept, but in the garage rather than brought to some studio somewhere. And

• 34:02Speaker 05

  people like it. There's like some interesting fascination with the US television audience of finding the treasure in the garage. And don't you wish it was you who found it? And I, I find him fascinating. We even, you may have seen one of the shows we produced for a long time. They're, they're kind of winding down, but it was called Redline Rebuild. And it was where we would do these time lapse rebuilding of an engine where, you know, you take a big dirty engine apart, and it all kind of like appear to assemble itself on an engine stand, and then it would start. And just, it was mesmerizing.

• 34:35Speaker 04

  That's the word I was about to say.

• 34:37Speaker 05

  Mesmerizing, yes.

• 34:38Speaker 04

  There, there's another channel that does the same thing with old watches.

• 34:43Speaker 05

  Oh, wow.

• 34:44Speaker 04

  And rebuilds them. And it's the same sort of, why is this so fascinating?

• 34:48Speaker 05

  Yes.

• 34:49Speaker 04

  As Redline, it's the exact same, same thing. Coming up, we continue our conversation with McKeel Hagerty, CEO and Chairman of Hagerty Specialty Insurance, discussing the collector car community today. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.

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• 36:49Speaker 08

  If you enjoy Bloomberg podcasts, you'll love listening to Bloomberg 991 FM in the DMV. Hi, this is Amy Morris. Here in the district, the story is always changing, from the White House and Capitol Hill, to K Street, Wall Street, and the Fed. Bloomberg 991 keeps you connected to the news that's driving decisions in the nation's capital and around the globe. Check us out at 991 FM or stream us anytime on the Bloomberg Business app.

• 37:19Speaker 04

  I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest today is McKeel Hagerty. He is the CEO and Chairman of the namesake specialty insurance company specializing in collectible cars, automotive, everything from cars, trucks, military vehicles, including classic wooden boats. Are those all Chriscraft? Or are there some other brands that make their way through that?

• 37:49Speaker 05

  Well, Chriscraft and Century were the two big manufacturers in the United States. There were sort of some more boutique brands like Garwood and Hackercraft, which were really high-end.

• 37:58Speaker 04

  Hackercraft, I've

• 38:00Speaker 05

  Yeah, Hackercraft.

• 38:02Speaker 04

  Those are big, tend to be a little bigger, right?

• 38:04Speaker 05

  A little bit bigger, triple cockpit kind of style boats. For those who are really into the artisanal cheese of the, of the boat world, I love the Canadian brands. So, well, there was a whole group of really fine boat builders up there, Manette Shield, Barnes, Gravette, brands that most Americans would not know of. But if you ever get a chance to go up to like the Muskoka Lakes, which is just north of Toronto, it's, they're just exquisite, like beautifully built boats. Very, they're like considered national treasures up there. So you don't see many of them in the US. But that's, that's just been, that was part of my upbringing. Like when, when we were, my mom and dad were building the boat business, and I was a teenager, it was like, huh, we're going to a boat show, going

• 38:48Speaker 05

  to Canada, going to Lake Tahoe, going to the Finger Lakes of New York.

• 38:51Speaker 04

  That's so interesting. I took some friends to a boat show last year, and the new Chriscrafts are shockingly beautiful. Like, they have aged into modernity really well. Like, it's almost like a retro mod.

• 39:08Speaker 05

  Yes.

• 39:09Speaker 04

  Because it's very contemporary and very modern, but clearly the design language from way back when.

• 39:15Speaker 05

  Yeah, they're, I think it's a little bit like that Hinckley crowd, where they're trying to find a retro, modern boat, but with kind of retro looks. And I love it.

• 39:25Speaker 04

  So, so let's, let's, let's keep this on cars, away from boats. And there's a quote of yours that I have to start with, because it's, I really like it. "The best piece of advice is to buy the car you want to drive, and then buy the best example you can afford. This may sound obvious, but not all vintage cars drive the way people hope they would." So there's nothing in that I disagree with, discuss.

• 39:54Speaker 05

  Yeah, it's, I think there's so many people that they, they envision someday when they have that little bit of extra resources, you know, that's going to be my toy. I want to get into the car world. And if they weren't 100% in this their whole life, or they, you know, their parents weren't into it, or you didn't have an uncle or somebody in your life who lets you drive in these things, I often recommend people try to get a chance to drive what you think you, you want. Because the older cars do drive very differently.

• 40:22Speaker 04

  Yes.

• 40:23Speaker 05

  And even if you think of, say, muscle cars from the 60s, they were very fast. I mean, these are cars that are

• 40:28Speaker 04

  In a straight line.

• 40:29Speaker 05

  In a straight line, lot of power. They do not stop or turn as well as you think. And you just have to get used to that. I mean, I love cars of all generations. I love driving very early cars. I have some newer cars. And I always just have to kind of center myself when I get behind the wheel to remember like, okay, this is, this is not a, this is not my Porsche Taycan, which is, you know, like this incredible piece of technology, you know, electric car. It's a vintage internal combustion car with funky brakes, and you have to be ready for it. So I always recommend people drive them and recognize that maybe it had air conditioning, maybe the air conditioning doesn't work. It doesn't matter. Like, Roll down the window and just enjoy yourself.

• 41:14Speaker 04

  Manually.

• 41:15Speaker 05

  Manually roll down the window.

• 41:16Speaker 04

  I tell the story, the, the vet, the 67, it's a lap brake, a lap belt, not a three-point belt. They couldn't be bothered to put a passenger side mirror on.

• 41:27Speaker 05

  No.

• 41:27Speaker 04

  Cause you know, what are you, what are you even going to see? And the steering is just beastly. But I also like the concept of buy the best example you can afford. And I find myself constantly saying to people, a cheap Aston Martin is the most expensive car you could possibly buy.

• 41:45Speaker 05

  Yeah.

• 41:45Speaker 04

  Um, but people don't really, really get that.

• 41:49Speaker 05

  Yeah. And they're, you know, look, different, different eras of cars come with their own challenges sometimes, you know? I think as, as we're seeing this onslaught of new generations coming in and wanting to buy slightly newer cars, I mean, it's 60 whatever percent of all of our, you know, new quotes and new cars coming into the space are all like relatively newer cars, car, you know, 1980s, 90s, 2000s cars. Um, some of those cars, for example, it may not be a mechanical issue that can drive you a little crazy. It's an electrical issue that will drive you a little crazy. If you think of, you know, some of the screens and the CD players and all the little control things that back in 1990, whatever was, you know, the biggest whiz bang feature. Well, it doesn't work so well anymore.

• 42:33Speaker 05

  The car runs fine, but you know, you're not going to be able to use the antiquated nav system. I just tell people like, you know, relax, it's fine. And, you know, enjoy the car, drive it. You know, all my kids, I always ask like, well, does the radio work in this thing? I'm like, I have no idea. It's not, it's never been on. I'm there to drive and it's such a fun activity as, as you know, they're going to just enjoy, enjoy driving a car for pleasure. And, um, and I also tell one, you know, the first thing I tell people who's sort of new to the space, like, well, I want to take it out to dinner. And I'm like, make sure you take it out during the day first a few times because sometimes cars leave you, um, in the restaurant parking lot at night. Um, so people I always ask, why don't you drive them?

• 43:17Speaker 05

  And I'm like, cause I'm not sure I'm going to get home.

• 43:19Speaker 04

  If you're, if you're used to modern cars, you'll be shocked at how terrible the headlights are on, forget 60s, 80s era's car. Those were not really great headlights.

• 43:32Speaker 05

  They weren't great. They're not dangerous or anything. You just have to be aware that they don't have all the modern technology.

• 43:37Speaker 04

  Well, well, when all the headlights were that way, you just said, this is what the lighting is and you had to be aware of it.

• 43:44Speaker 05

  That's right.

• 43:44Speaker 04

  It's when you go backwards, you take a lot of things for, forget the blindside warnings and the backup cameras, just your expectation of field of vision.

• 43:54Speaker 05

  Yes.

• 43:54Speaker 04

  Um, is so different. So, so let's.

• 43:57Speaker 05

  It's a, it's a different kind of attention, driving a vintage car.

• 44:00Speaker 04

  It's much more focused.

• 44:02Speaker 05

  It's more focused and I, I love it. And I, you know, I encourage people, you know, just try it out. It's a, it's a great experience.

• 44:08Speaker 04

  So, so what are some of the bigger trends you're seeing in collecting? What, what's changing these days?

• 44:15Speaker 05

  Well, again, big, big story, you know, contrary to, you know, data that we were reading a few years ago is the next generations are absolutely into cars. They like them. They're just into different kind of cars than our parents were, we were probably.

• 44:27Speaker 04

  Well, doesn't every generation sort of lust after the cars from the high school parking lot?

• 44:32Speaker 05

  I think that's right. They did, and they're, they're different. And I, um, one of my little cottage industry things that I do is if I'm ever driving anywhere near a high school parking lot, I look to see where the young car people park their cars.

• 44:45Speaker 04

  Uh huh.

• 44:45Speaker 05

  And they usually park them in the back of the parking lot, not up near the school. And they all park next to each other. So then go hang out afterwards. And what you're going to see right now of a, but with the 17 and 18 year olds, car people in these high schools is, you know, you're going to see BMWs, you're going to see Audis, you're going to see some, you know, various performance Japanese cars, you know, you're not going to see anything fancy. They can't afford them, but that's the cars they're starting with. Trucks are of course, another big entry point, and it's another, been another huge trend. So not just pickup trucks, but kind of vintage SUVs. So Jeeps are still right now, one of the hottest brands. It's huge. Of course Broncos are one of the hottest things. Um, of course, if they could afford them, you know, depending on it, a Land Rover or

• 45:29Speaker 05

  International Scouts. Um, these are the cars that people are interested in because so many cars today are SUVs anyway. And so the vintage version of them are one of these kind of more off-road vehicles and there's a big industry of modifying them, making them work a little bit better. And so that's another big trend. Um, so again, next generation trucks, I guess I would say, I mean, flying over the top of the whole industry, which, you know, at the top, top end of the market. And just to add on to the answer to your question is, um, you know, the, the ultra luxury kind of supercar manufacturers are making more cars than ever, ever before. And so you think of those brands like Ferrari or Lamborghini or Bentley or, uh, you know,

• 46:12Speaker 05

  even Porsche, my beloved nine 11S. Those companies are just building a lot more cars and pumping them out into the market at price points that were different than they used to. So, you know, when Ferrari or Lamborghini were building hundreds of cars a year, well, now Ferrari is a 14,000 unit a year manufacturer. Lamborghini, when you add their SUV in, it's an eight or 9,000 vehicle manufacturer. I mean, when I was a kid, you never saw Lamborghini unless you just happened to be in Beverly Hills or Palm Beach or something. And now they're everywhere. I mean, even in my little town in Northern Michigan, there are a couple Lamborghinis driving around. I'm like, oh my goodness, you know, that's amazing. And so.

• 46:48Speaker 04

  What's crazy is where, where I live, I'm 15 minutes from a Ferrari dealer, two Porsche dealers, the Bentley Lambo dealer, and I take it for granted. I see these cars all the time, but as a kid, you hardly ever saw these around.

• 47:04Speaker 05

  You wouldn't have.

• 47:05Speaker 04

  Uh, like a Porsche was a, was a exciting thing.

• 47:08Speaker 05

  It was. So they are building my next generation of customers. Every one of these manufacturers are like my best friends because they're, they're building the cars that I will be insuring this year and 25 years from now.

• 47:21Speaker 04

  So, so your boy, Jason Camisa mentioned, um, he's only a manual driver. I embrace that, um, makes the car even that much more difficult to steal. But I'm curious, uh, amongst the trends in collecting, I've been hearing about a move towards analog, towards manual, away from the big dominant screens. What, what does your data say?

• 47:46Speaker 05

  Well, it's true. And in fact, you know, you think about some of those very same supercar manufacturers that, you know, were, you know, they signaled years ago, we're, we're getting rid of manuals. You know, everything's going to become this super electronic sort of driving experience.

• 48:00Speaker 04

  Faster on a track, so they say.

• 48:02Speaker 05

  Yeah. I mean, I think, yeah, that, and, and they are. Um, and by the way, the one nice thing about the PDK, if you drive them in the winter, like I happen to love driving Porsches in the winter, PDK is pretty nice in the snow for what it's worth. But setting that aside is I, I'm just totally impressed that many of these car companies are kind of going back on what they said they were going to be doing and starting to not reintroduce manuals, but they're producing another, you know, extra model with the manual in it.

• 48:29Speaker 04

  At a very high price.

• 48:30Speaker 05

  At a very high price.

• 48:31Speaker 04

  You look at the Porsche STs or the sport or all the GT3s. If you want a manual, my GTS was the last year it came with a manual, which was 24. And the turbo, I think 2013 was the last year with the manual, something like that. So it's amazing. They took the supply away and said, all right, if you want a manual, we'll give it to you, but it's $300,000.

• 48:59Speaker 05

  Yes, yes. And what they saw is they were looking at the auction data, like from our auction companies and, and others, and suddenly the manual version of something.

• 49:08Speaker 04

  Premium.

• 49:08Speaker 05

  Absolute premium.

• 49:09Speaker 04

  And, and now manual swaps are showing up in, in, uh, V12 Aston Martins and, and 430 Ferraris. I see these all the time.

• 49:21Speaker 05

  Absolutely. So again, I think it's the return of the analog. Um, people more, you know, interested in driving. I mean, I think, I, I think we're all trying to absorb what COVID did. COVID was a boom.

• 49:33Speaker 04

  I'm sure.

• 49:34Speaker 05

  Time for these kind of cars. But, you know, even afterwards, I think, you know, people were embracing slower hobbies, slower things, you know, playing music, camping, hiking, you know, outdoor pursuits. And, you know, in some of these things, kind of cars sort of fit into that a little bit, which is, you know, something to just go out and take a long, slow Sunday afternoon drive is not something that, you know, the rush, rush world of what mileage does it get? And, you know, what's the lease payment on it? You know, it's, it's just a, it comes from a different place and there's a bigger audience than people think who are willing to spend real money on it.

• 50:12Speaker 04

  So there's a data point you guys have referenced that I want to ask you about. Quote, "We estimate that approximately 12 million enthusiast vehicles will transfer to a new generation in the United States over the next 15 years, either via estate plans or inheritances." What is this generational handoff from, I guess we could call them boomer collectors to millennials and Gen Z? What, what does this mean for the car collecting community?

• 50:44Speaker 05

  Well, and I think we've all read that there's this huge, you know, gigantic wealth transfer, whatever the headline number is.

• 50:51Speaker 04

  65 trillion.

• 50:52Speaker 05

  I've heard 100 trillion, you know, 70. And, you know, our estimate just on that number of, you know, 13, you know, million vehicles, 12, 13 million vehicles is about $570 billion worth of car value. Right now, most of those are held in, you know, the hands of the generation of baby boomers. I'm an, I'm an older Gen Xer. Um, we, you know, Gen Xers are starting to come into their peak wealth, past peak earnings, into peak wealth years, buying a lot of cars. But 15 years from now, about a third of that whole market will, will come loose back. And we're, again, we're seeing this, certainly the, the entry points are different than they were a generation ago, where people are interested in sporty cars, trucks, uh, younger kind of,

• 51:37Speaker 05

  um, you know, young timer cars as they refer to them in Europe. Um, and, uh, you know, we are, we're seeing the data. We want to position ourselves well to see that the transfers are kind of smooth, you know, where you're, you know, you're kind of helping the next generation get into these cars. We're actually doing things like teaching manual driving classes because, you know, if you talk about it, it's not just an anti-theft device or some slow hobby like brewing beer or whatever it is. It's, we need to teach the next generation how to drive manuals. And it's, it's, you know, it's not that hard to do.

• 52:11Speaker 04

  It, not only is it not that hard, it's just so much more engaging. And not to be a stick snob, but it really is a very different experience. And yeah, I know the GT3 in the PDK is faster than the stick, but how often am I taking my car on a track? If that's once or twice a year, it's a lot. What about the other 360 days a year?

• 52:38Speaker 05

  Well, and even if you did, you and I, neither of us are good enough drivers to really make a difference.

• 52:43Speaker 04

  Speak for yourself, McKeel.

• 52:45Speaker 05

  Okay, one second different in the laptop. Oh, well.

• 52:48Speaker 04

  Whatever it is, it's, it's, it's funny because I've done all the high-performance driving classes and the reality is, if you're in a Roush Mustang up at Lime Rock, they said, put it into third, leave it there for the whole track. So really, driving the stick isn't that much different. But if you're really doing a competitive course, of course not. First of all, you don't, the car doesn't stop. The dual clutch is so fast, the, the engine is always engaged. So you're not losing that 10th of a second when the clutch is down and you're, you're losing power. But it still just feels so much more engaging.

• 53:31Speaker 04

  Related question to the analog and the manual. So you do a 2025 bull market list, you do one every year. The average model year of featured cars, you, it used to be in the late 80s, early 90s. All of a sudden, it's 2001. How did that happen? What's driving that shift in bull market attracted? Is it that pre-screen analog manual feel, but not quite as old as 70s, 80s cars?

• 54:06Speaker 05

  I think so. And I think it's, but it's also, there's a, it's a combination of what's driving demand. One is there's absolutely a new cohort of people getting in, making a little bit of money buying these things. At the top end of the market, though, it's not just, oh, the new young tech guy who has, who's going to be in the OpenAI IPO and is going to make money and go buy a car. Older generation collectors are also buying a lot of these new cars at auction. And it's interesting, I've seen this twice in my career, in the big muscle car era, which was 2005, 6, 7, right before the great financial crisis. Everybody said, oh, it's a new generation of people buying all these muscle cars and paying, American muscle cars and paying a lot of money for it.

• 54:48Speaker 05

  And that was true, there were. But it was also the older generation of collectors who liked earlier cars saying like, well, maybe those are cool and I want one too. And by the way, I have more money than you, so I'm going to outbid you at auction and it's mine. Same thing right now in this sort of like, say, supercar segment, where a lot of these cars from the 90s and 2000s are, we see these values going up. It is the new, you know, kind of newer money, newer collector, but it's an older generation of collectors saying, well, I don't want to be left without a cool car. Or in fact, one guy told me recently who bought a Bugatti Veyron and a couple of newer cars, said, well, I want to have a car that my grandkids thinks is cool. And so I'm like, got it.

• 55:29Speaker 04

  And that's not the Bugatti Veyron?

• 55:31Speaker 05

  Yeah, but no, he said, he loves it. He said, and I'm taking my kid, my grandkids and drives in the Bugatti Veyron. And so, you know, they think it's cool.

• 55:39Speaker 04

  Yeah, I can, I can imagine. All right, last question before I get to my favorites, because I know we're watching the time. So you guys crunch so much numbers, so many datas. What do you think the casual observer of collector cars misses that your data is revealing?

• 55:57Speaker 05

  Yeah, well, I think those big headline cars are, they attract so much attention and people just think it's this, you know, crazy, very high-end market, very, very rarefied cars. And while that is true, those are the headline grabbing numbers. You know, the, the big story is that there's just a much, much wider opportunity for people who want to play in this space. Every single price point, every little bit of reliability and everything from pickup trucks, like I said, if you live in that part of the world and that's something that's interesting to you, it's a very broad-based hobby. It's also, you know, this is, this was a hobby that for many, many years was very

• 56:39Speaker 05

  much male-oriented, male-driven, and I can see that in the data of who our insureds are and everything else. There's a really rising cohort of young women and, you know, women who want to have these cars and have it be part of their lives too. I think that's probably one of the most exciting trends that, so very broad-based.

• 56:56Speaker 04

  I've noticed a lot more women YouTubers talking about cars.

• 57:01Speaker 05

  And coming to Cars and Coffee with their cars and, and that sort of thing. So it's, there's just, there's a lot more to it. It's much broader based and sure, it's fun to see a multimillion dollar whatever sell someplace, but that's just not, that's not the average reality. The average is actually much broader based and much more interesting.

• 57:18Speaker 04

  So I'm, I, I want to get to our favorite questions, but I got to throw some other stuff. Let's just do a quick speed round. Someone comes up to you and says, hey, I'm interested in a fun weekend car. I don't have a lot of money, but I'd like a convertible stick shift. What do you?

• 57:34Speaker 05

  Mustang.

• 57:35Speaker 04

  Mustang?

• 57:36Speaker 05

  Of course. Yeah, other than Ferrari.

• 57:37Speaker 04

  You say of course, because I would have said Miata.

• 57:39Speaker 05

  Oh, yeah. Well, Mustang or Miata. I mean, so, and I always tell people like the oldest Miata is now 33 years old, something like that. And they made, and they made over a million of them for the US market. Super reliable. If you want to go track driving, they're the great track cars. If you want to just cruise around on a weekend, they're inexpensive, $10,000, $15,000.

• 58:00Speaker 04

  Right.

• 58:01Speaker 05

  But same thing with Mustang, you know, so just they're.

• 58:03Speaker 04

  And a little more horsepower in the Mustang.

• 58:05Speaker 05

  A little bit more horsepower. They made a lot, they made a lot of convertibles, they're manuals, they're automatics if you don't feel comfortable with, with that. And very, very affordable cars and easy to get serviced. So that, those would be my two recommendations. Of course, the most collected car though, still in the United States is a Corvette.

• 58:22Speaker 04

  Uh huh.

• 58:23Speaker 05

  And that, you know, they've been making them forever. There are lots of them, easy to service.

• 58:26Speaker 04

  And not that, especially like a C6 or C7, not that expensive for a semi-modern car?

• 58:33Speaker 05

  They're amazing. They're amazing cars.

• 58:35Speaker 04

  Someone says, I'm interested in something European, a little more interesting, sporty. Where do you send them?

• 58:43Speaker 05

  Well, I'm a Porsche person, so I would say, great, you want a 911, but let's start you in a Boxster. You know, let's start you in, you know, whatever, some more entry point, point there. That younger generation that I talked about, the sort of three-series BMWs, super fun cars, lots of them built with a lot of quality. They kind of have style, they look good. That's where people go.

• 59:07Speaker 04

  Yeah, those have aged beautifully, the design of the early BMWs. Someone who's a little more, has a little more scratch, a little older says, hey, I'm looking for something fun, but it's going to retain its value and I'm willing to spend more than my kid buying a Boxster.

• 59:26Speaker 05

  Well, then I'd still probably, I mean, again, my, my bias here, I'd still probably say 911. But you're going to pick a year that was maybe a slightly, slightly off year, they're going to hold their value well. I've, I've actually, I did a kind of market cap comparison between every 911 ever built, ever built versus every Ferrari ever built. Because people talk about Ferrari GTOs and all this sort of thing, which are worth tens of millions.

• 59:49Speaker 04

  275s and they're just, they were spectacular.

• 59:53Speaker 05

  And they are. I love them. But when you look at all the 911s that were built that were really undervalued for a long time, you know, you could buy, I mean, I, people used to give me a hard time because my 67 911S, when I spent over $100,000 having it professionally restored not that many years ago.

• 1:00:11Speaker 04

  Oh, really?

• 1:00:12Speaker 05

  I mean, after my, you know, my very amateurish high school restoration, I spent $100,000 or whatever, a little bit more than that, and it was worth about 70.

• 1:00:19Speaker 04

  Right.

• 1:00:20Speaker 05

  Well, now it's worth about 300.

• 1:00:21Speaker 04

  No kidding?

• 1:00:22Speaker 05

  Yes. You know, 250, 300 for a 67S. And people say like, what's the car, what's your 911 worth? I'm like, I don't care. It's my, it's my baby. And like, no one will ever, I, I and my family will have that car forever.

• 1:00:35Speaker 04

  Um, I have a bias against garage queens, but I'm curious as to your thoughts. People who buy cars, put them in a garage, never drive them.

• 1:00:44Speaker 05

  I think those are really sad cars.

• 1:00:46Speaker 04

  Right. They got to be great for business because of zero risk.

• 1:00:48Speaker 05

  And the claims are low. But they're sad cars. And especially, by the way, no, almost, there's not a single generation of cars that fares well when it sits around for a long period of time. Tires age, belts and hoses age. And some of those 90s and 2000s cars, they age particularly badly when they sit in the garage, lots of maintenance required. So my view is, if you got a car, unless it's like six miles on it or 15 miles and you just think that's what makes it cool, and there are a lot of customers that we have that like that, my view is go drive it. We sold at our Amelia sale, one of the two record-setting Ferrari Enzos, we sold it for $15 million. The car had, I think, 249 miles on it, Ferrari Enzo. And everybody's

• 1:01:32Speaker 05

  like, what do you think of that? I'm like, I would rather have the 20,000 mile Ferrari Enzo that I could go drive. I mean, that, just personally, myself. And I congratulated the buyer, wonderful buy, sir. But I would like to.

• 1:01:44Speaker 04

  Please drive it.

• 1:01:45Speaker 05

  Please drive it.

• 1:01:46Speaker 04

  Doug Demuro said something really interesting about his Carrera GT when he was hunting for one. He found one with higher mileage because he said, I won't go through the process of, I'm not going to drive this because I'm depreciating it. It's starting out higher mileage, so you're more inclined, you're more inclined to put miles on it.

• 1:02:03Speaker 05

  I have one vintage car that has super low miles on it. It's a Jaguar E-Type, 1966. It had 13,000 miles on it when I bought it and it has about 15,000 miles on it now. And it's just, it bugs me because I feel like it should be driven and then I worry that I'm just putting a bunch of miles on it. And so, I don't know, I have the same quandary. So I just like to drive cars.

• 1:02:24Speaker 04

  So we're recording this right after Ferrari dropped their new loose electric appliance? I don't even want to call it.

• 1:02:34Speaker 05

  Yeah.

• 1:02:35Speaker 04

  Yeah, it's a. My Ferrari buddies are not big fans of all the new

• 1:02:43Speaker 04

  versions that have been coming out. I still think the 458 is really handsome. I love the 812 GTS. If I ever get that garage built. Those, one of those has my name on it, but the question for you is, when you see these new cars coming out and they're so technology heavy and so screen focused. How do you think these will fare as collectibles 20, 40, 60 years from now?

• 1:03:14Speaker 05

  Well, I can tell you I will never bet against Ferrari. Not ever once, because I mean, it is just forever since the day the first one was built until, you know, it is just, there's been something magical about that brand. I love the history of how the fact that like the second Enzo Ferrari back in the day would show up with one like everybody knew, well, that's the car to beat. Period. And even though sometimes you beat them, sometimes you didn't, they were just the car to beat. And I also remind people that cars like, companies like Ferrari, they've always had different lines of cars. You know, Ferrari always had race cars, but they also always had their like businessman's car, you know, a front engine. Slightly less.

• 1:03:53Speaker 04

  599, 612. Even the 575.

• 1:03:58Speaker 05

  Well, and the SUV, the Purosangue, like people said, they'll never build an SUV. And I remember I was talking to Bob Lutz and he just said, watch.

• 1:04:06Speaker 04

  Right.

• 1:04:06Speaker 05

  He said, and I'm like, why do you think they will build an SUV, Bob? And he said, because they have to.

• 1:04:11Speaker 04

  I was gonna say the, the Cayenne and the Macan saved Porsche.

• 1:04:16Speaker 05

  They saved Porsche.

• 1:04:16Speaker 04

  All right. Ferrari had to be watching that. They had to be seeing the Urasales, which is essentially a rebadged eight truck for, from Audi with a whole lot more horsepower. I mean, how did they not do that?

• 1:04:31Speaker 05

  They had to, and I think I get it, like this particular electric car is not necessarily had the most favorable initial reviews, but my view is I will never count Ferrari out. And I think they probably are seeing some things in their data and with some certain customers who want this and we'll see.

• 1:04:48Speaker 04

  Well, we'll certainly see. So let me jump to my favorite question, so I don't make you late for your trip back to the Midwest. Who were your early mentors who helped shape your career?

• 1:05:01Speaker 05

  My, my mentors went from kind of macro mentors to micro mentors. And so, you know, in early days, of course, it was my parents. My parents had very different skillsets and I was so blessed that I got to work with both of them. There were some teachers kind of early on who were really extraordinary professors that both kind of, I think, triggered my love of learning. One gentleman, his name was Gary Hart, still living. I, I kind of look after him in his old age. He just fundamentally taught me how to be a good student. But what I found though is my mentors have become more micro mentors now, like less than it's my whole life, learning everything about something from this person is

• 1:05:43Speaker 05

  now I find somebody who's really good at one thing and I learn from them. I become friends with them. My, my current lead director on our public company board, Bill Swanson. He was the chairman and CEO of Raytheon and wonderful man, car collector. And just brilliant at board governance and how to think things through. And I'm just learning so much listening to him. And so he's a real mentor of mine. And so I think I'm very much of that tribe of mentor approach and I've had many and I love mentoring myself. So.

• 1:06:12Speaker 04

  Really, really interesting answer. What, what are some of your favorite books? What are you reading right now?

• 1:06:16Speaker 05

  So I'm a, I'm an avid reader. I read 30 to 50 books a year typically and a lot of biographies in the last four or five years. I was definitely on a music biography stint, so a lot of rock and roll biographies. And then I went through.

• 1:06:30Speaker 04

  Give us a few names.

• 1:06:32Speaker 05

  Oh, everything from the Keith Richards to Slash to you name it. I mean, a lot, I read a lot of biographies of, you know, Springsteen, anybody. Then I did an interesting kind of parallel set, which was music producers and that was fun. So everything from the, there's a famous book on Warner Brothers music that was about called Sonic Boom, which was all of the music producers that did that for, to Clive Davis, to those types of folks. For this year though, my reading theme is all about the founding of America. So I'm reading a lot of kind of American founding stuff. I've just figured it's a good time to do that. So biography so far this year on George Washington, Benjamin Franklin.

• 1:07:16Speaker 05

  There are a bunch of other books around kind of a lot of the founding fathers. I'm also wading through Wealth of Nations again, first time since college, because it was also published in 1776.

• 1:07:27Speaker 04

  A little bit of a slog.

• 1:07:28Speaker 05

  Yeah, that's a, that's a beast. That's a beast. But I would say one, one final piece is I was a sci-fi fan forever.

• 1:07:35Speaker 04

  Oh, really?

• 1:07:36Speaker 05

  And I decided for the last two years, I started rereading a bunch of the great series that I read a long time ago. So I, I just read the entire Dune series for the third time in my life.

• 1:07:48Speaker 04

  Wow.

• 1:07:49Speaker 05

  And that was fun. The Foundation series, Ozymov.

• 1:07:53Speaker 05

  Clark, I think what I had forgotten is that almost all of those sci-fi authors knew each other.

• 1:07:59Speaker 04

  Yes.

• 1:08:00Speaker 05

  They all kind of subscribed to some of the same magazines and they get together for these little get togethers and they were all kind of envisioning a future together and a lot of same themes and especially right now around the challenges with AI are all embedded behind the Foundation series and even in Dune. That people, if you kind of have to read into it, but it's fascinating stuff.

• 1:08:22Speaker 04

  Larry Niven, Philip K. Dick, any of those?

• 1:08:25Speaker 05

  Yes. And, you know, of course, you know, Hitchhiker's Guide to the Galaxy. So for a little bit of humor.

• 1:08:30Speaker 04

  A classic. What are you streaming these days? Give us your favorite either YouTube or Netflix or even podcasts, what, what's keeping you?

• 1:08:38Speaker 05

  Yeah. So, I mean, my, my workout companion is a lot of podcasts. So, and, and they've kind of shifted, I guess, a little bit. So while I was, you know, during COVID, it was a lot of just sort of habits and mindset stuff and this sort of thing. And then when I discovered people like Scott Galloway, his very humorous way to think about business. Tyler Cowen, I think is just absolutely brilliant. So great podcasts there. I've also been impressed with that Audible has a number of their own kind of, again, back to the musical biography thing, they have a lot of these short format kind of podcasts, kind of other kind of quasi musical performances that are both kind of spoken word and music.

• 1:09:21Speaker 05

  And it's actually called the Words and Music series and that's been really fun to listen to some of those.

• 1:09:27Speaker 04

  Words and music. I'm gonna have to check that out. All right. Our final two questions. What sort of advice would you give a recent college grad interested in a career in either automobiles or insurance or, or business?

• 1:09:41Speaker 05

  I think I've, I've just been, I've been to two different commencement ceremonies. One was my daughter's and another was some friends and, you know, all the commencement speakers right now are so focused on AI and trying to tell them it's going to be okay. And not only do I think it's going to be okay, so I always remind them and people of my own career, which is I work, my core business is what some people would call as a relatively boring industry, insurance. Dog, you gotta go into cool other stuff, not go into some of those things. I think there are so many opportunities in these industries that are established, they are stable, they need really smart people who want to work hard and remake what they are. Is don't overlook things that you consider boring today.

• 1:10:25Speaker 05

  You know, look at some of those and think, who are the types of people that are going into these that you can make a great career? I never imagined I'd be doing what I am today. And I think I have the coolest job you can have.

• 1:10:37Speaker 04

  Really, really interesting. And our final question. What do you know about the world of automobiles or insurance today? Might have been useful 30, 40 years ago when you were first ramping up.

• 1:10:50Speaker 05

  I think

• 1:10:52Speaker 05

  you know, the the world has been predicting the demise of certain parts of the automobile industry for years. You know, and we, we saw it very recently with, you know, this almost like holy war, people view the difference between EVs and internal combustion cars. And I'm very agnostic about all of that stuff. And it's very easy to kind of get sucked into those arguments like, well, what do you think of EVs? I'm like, I don't know. There were EVs back in 1908. There were steam cars in 1910. And now, you know, we've been on internal combustion for a long time. I think there will be more electric cars in the future. But I also think they're going to be great internal combustion cars. So I think I would just continue playing the big, long game.

• 1:11:34Speaker 05

  And don't worry about some of the little petty arguments that people can have that, you know, it makes for a good, maybe cocktail party talk, but I like to see the big picture.

• 1:11:43Speaker 04

  McKeel, thank you for being so generous with your time. We have been speaking with McKeel Hagerty, chairman and CEO of Hagerty Specialty Insurance. If you enjoy this conversation, well, be sure and check out any of the 648 we've done previously. You can find those at YouTube, Apple, Spotify, Bloomberg, wherever you get your favorite podcasts. I would be remiss if I didn't thank the crack team that helps us put these conversations together each week. Alexis Noriega is my video producer. Sean Russo is my researcher. Anna-Lucia is my podcast producer. I'm Barry Ritholtz.

• 1:12:25Speaker 04

  You've been listening to Masters in Business on Bloomberg Radio.