Insurance

Scion Insurance Who wants to save human driving

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

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

According to Hagerty, car culture — at least the analog, valve-and-spark plug version the company has put its stamp on — is existentially threatened by electric and self-driving technology. Today, every part of the business is about saving that culture for the millions of people who care about more than what powers a car.

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

Hagerty is essentially an insurance company; why do all that other stuff like publishing magazines, buying contests, and facilitating peer-to-peer car sales?

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

And all this sells policies?

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

How threatened is car culture?

The talking point around the self-driving 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 untrustworthy. I’m not saying cars shouldn’t be safe and drivers shouldn’t be safe. I’m just saying the converse is this reductionist view that the only thing people care about is what powers a car.

Our view of the automotive world is that for people who really love cars – and there are tens of millions of them, we have the data to show this – the concept of mobility is not their primary reason for owning cars . There’s signage, then there’s experience and even legacy – other meanings of what a vehicle is in people’s lives. We’re not trying to save the four-hour drive, we’re trying to save the Sunday afternoon drive or the motorsport event.

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

Yeah. Henry Ford did not make the horse disappear; he and all his peers have somehow removed these horses from everyday public transport. But a car carries more than your physical body. It carries your ego, your identity, your memories and your thoughts about who you want to be. It’s like fashion or other things that you have in your life that are signaling devices.

How can Hagerty’s efforts help?

Automobile club membership has somewhat declined statistically over the past two decades. The level of engagement has changed and some has gone live. We need to create an organization that is big enough and capitalized enough to be able to make bigger moves and try to put these things together because some of them don’t come cheap.

I don’t envision anything like a big thing at the NRA level. It’s not about creating a gigantic lobbying organization, although I wouldn’t be surprised if we end up teaming up or helping fund extra efforts in government affairs to make sure we don’t accidentally get legislated on the roads. For this to exist in 30, 50, 100 years, it will not happen by itself.

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

Commuting mileage has certainly decreased significantly over the past two years; pleasure mileage has increased. And while bidding was significantly lower from an earnings perspective, during COVID, peer-to-peer car purchases spiked. People said, “If I’m going for a drive on Sunday, I’d much rather be in a car that I find fun.”

What do you think of the electric restomod trend – turning classic cars into electric vehicles?

I’m excited about this. I’m a big fan of processes where it doesn’t completely clog the underlying car. In fact, we have a few cars in our fleet which our teams have restored and which we use for driving experiences and we are considering getting a second one and turning it into an electric vehicle.

Do you have EVs in your garage?

No I do not. I’m ordering a Porsche — the Taycan. My first car was a Porsche, so I thought I’d try one.

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