Collectible Car Insurer Hagerty Eyes Off Australian Expansion

Forbes

3 days ago

McKeel Hagerty is considering taking the listed Hagerty collectable car insurance success story to ... More Australia. Photo: Steve Jessmore Photography.
The Shannons stranglehold on the Australian insurance market for rare, expensive and collectible cars could be nearing an end, with America's Hagerty Insurance eying up the Australasian market.
Speaking during the Concorso d'Eleganza on Lake Como, Hagerty CEO McKeel Hagerty admitted his company had been approached to enter the market there.
'There are a significant number of people who want us to enter Australia,' Hagerty admitted.
'Those requests have come from other insurance companies and the only problem is the resource it would take us to do.
'But Australia would be a place we eventually get to, I think.'
Any move into the Australian market would tread directly on the toes of Shannons Insurance business, with both companies specializing in the car-enthusiast and collector business, rather than mainstream car insurance.
It's a niche, with cars often appreciating in value, with spare parts sometimes incredibly difficult or impossible to source and with valuers needing an encyclopedic knowledge of one-off cars from even a century ago.
Incumbent Australian collectable car insurance firm Shannons is a long-term supporter of both niche ... More and mainstream Australian motorsport, including the Bathurst 1000. Photo:Traditional insurance companies prefer business models they're more familiar with, and often approach companies like Hagerty and Shannons to handle collectible cars for their clients, Hagerty said.
'The big insurance companies think of themselves as department stores and have to sell everything, but we are a boutique and not a department store,' Hagerty said.
'Nine out of the 10 biggest insurance companies in the US partner with us. They are the fiercest competitors and they all have agreements with us.
'The simple reason is that 2% to 3% of their general policies would include a car that we would be interested in, and they don't know what to do with it.
'The whole model of insurance is to handle depreciating assets and we only deal with appreciating assets, so we take a problem away from them and they can keep insuring the cars and houses and buildings they know how to do.'
Hagerty Insurance does the opposite of most car insurers by mainly insuring appreciating assets. ... More Photo: Hagerty Insurance
Hagerty has been making other moves, too, including poaching AT&T marketing wizard Marc Burns for its newly created Senior Vice-President of Brand and Marketing role, and it has a strong track record of beating financial forecasts.
Unlike Shannons, Hagerty runs a growing auctions business, with the Broad Arrow auction house selling more than €31 million in sales, with a 78% clearance rate, at its recent Concorso d'Eleganza sale.
Shannons ran Australia's most interesting car auctions for more than 40 years, but shuttered its Brisbane, Sydney and Melbourne showrooms in 2023 after being absorbed by Suncorp.
Shannons, founded by Bob Shannon more than 40 years ago, was absorbed by its long-term corporate partner, Royal & Sun Alliance Insurance Limited, in 2000, and has more recently fallen under the Suncorp umbrella.
A long-time favorite of the Australian collectible-car scene, Shannons also supports more than 1,200 car and motorcycle events a year in Australia, and runs the Shannons Club, which it claims is Australia's largest online motoring enthusiast community.
Hagerty does similar things largely in the USA, the UK and Canada, ranging from the highest of the high end events at Concorso d'Eleganza at the Hotel Villa d'Este on Lake Como and the Pebble Beach Concours d'Elegance, to Radwood, Cars and Caffeine and the British Festival of the Unexceptional.
Its Drivers Club magazine is one of the biggest-circulation car magazines in the world.