It all started in 1984 with a couple of wooden boats – vintage collectibles cherished by Frank and Louise Hagerty of Traverse City, Michigan. When the couple could not find an insurance agency willing to provide coverage for the antique vessels, they discovered that other classic-boat owners were running into the same problem. So they launched their own agency, Hagerty.
Today, what began as a “hobby business” in the basement of the Hagerty home has grown into the world’s largest classic vehicle insurance provider – larger than all of its specialty insurance competitors combined. With 700 employees and insuring more than 1 million classic cars globally, Hagerty has become the brand leader in their industry.
“We’ve built our entire business around being specialists and not just offering cheap insurance,” president and CEO McKeel Hagerty (son of Louise and Frank, who passed away last year at age 79) told Best’s Review last year. In singling out classic cars, Hagerty added, “The attachment to these cars can be real emotional. That emotional component, that attachment, yields itself to working with someone like us. Because we get it. We’re not just out to get the collector car so we can insure your house. We care only about classic cars.”
That level of commitment has resulted in an astounding rate of customer loyalty, particularly within the insurance industry, which is characterized by high levels of annual customer churn. Hagerty Insurance maintains a Net Promoter loyalty score of 82 in an industry that averages 30.
And Hagerty employees are just as crazy about the company as their customers are: In 2014, they ranked the firm #6 on Fortune’s Great Places to Work list among medium-sized companies — up from a #13 ranking in 2013.
“Our employees are responsible for our success, and we put a lot of effort into fostering a fulfilling workplace environment,” says Hagerty, who notes that Great Place to Work Institute’s “trust index” shows that an astounding 91 percent of Hagerty Insurance employees have a sincere love for their work.
The Hagerty workplace culture is supported by the “The Hagerty Way” the company’s “aspirational set of maxims,” which include:
We take care of each other first
We focus on doing the right things the right way
We strive to make Hagerty a world class company, culture and brand
We expect measurable, best in class results
We fuel our client’s ownership and engagement, and promote the cultural value of collecting
We are good partners
We are good visible citizens in our communities
“We’re empowered to do and say the right thing, even if it doesn’t make us the most money,” says Andrew, a Hagerty auto sales and service employee. “We’re empowered to be honest.”
Company leadership sets the example, says JoAnn, who also works in auto sales and service. “It’s genuine, consistent behavior from the top down. It’s just the way it is. Everyone is respectful of each other and that goes a long way.” Adds Lisa, who works in private client services, “Working with positive and supportive people inspires me to be a better person.” (To get a sense of the company’s lively climate, click here to watch an employee-made video.)
“This is not a sport that’s just for the wealthy,” Hagerty explained to The Nanaimo Daily News of British Columbia. (The average value of the cars Hagerty insures is $30,000.) “You can get a great pickup, an MGB or a 1970s car for a few thousand dollars. At the higher end of the collectible spectrum, though, you’re talking about history. The automobile is the most significant industrial artifact of the last 150 years.”
The customers’ love for these special cars makes them particularly grateful for the company’s personal touch in times of trouble. Following the 2012 Hurricane Sandy disaster on the East Coast, “People would call four and five times because they knew they could get through and talk to a live person,” Hagerty assistant claims manager Michelle Ayers told the Traverse City Record-Eagle. “I think they just wanted to know someone was there.”
Hagerty Insurance is located in a gleaming Traverse City building that features its own classic-car display, state-of-the-art employee gym, high-end cafeteria and – during Fridays in summer – an ice cream machine where employees gather for snacks and conversation the way those at other workplaces gather around a water cooler.
The company runs a program called Hagerty University, offering classes and seminars in car basics, leadership development, client service, public speaking and more so employees can learn new skills and branch into new areas of the company. The company’s claims adjusters undergo 80 hours of hands-on classic-car-repair training per year.
McKeel Hagerty credits his late father’s passion for vintage boats, coupled with fairness to clients and generosity and kindness to employees as creating a company culture that consistently puts people before profits and has maintained a mom-and-pop feel while owning a global, niche market.
The company maintains a strong local presence through a program called Hagerty Cares (its mission: We believe in building the economic vitality of the communities in which Hagerty employees live and in proactively promoting the preservation of the collector car community).
Hagerty Cares provides each worker with 16 hours of paid time each year for community service (though many employees donate far more than 16 hours). The company generates over $100,000 of in-kind support annually for nonprofits it partners with, generosity that has been recognized nationally and by the state of Michigan as the Corporate Volunteer Program of the Year by the industry leader, Volunteer Match.
Hagerty further extends its commitment to clients by publishing Hagerty Classic Cars Magazine, whose 400,000+ subscribers make the publication one of the industry’s largest. Classic-car enthusiasts can post photos and stories about their vehicles right on the Hagerty website.
And to ensure that all employees have a deeper understanding for their customers’ passions, the company provides them with plenty of opportunities to get their own hands dirty. Last year, over 100 employees donated 2,750 hours to the complete restoration of a 1969 Camaro. In 2010, the employees helped restore a 1930 Ford Model A, and recently work was completed on a 1964 ½ Ford Mustang.
The employee restoration projects reflect all the head-under-the-hood tutelage that founder Frank Hagerty gave his kids when they were young. To this day, McKeel still drives the 1967 Porsche 911S that he restored with his dad, while his sister, Tammy (a board member of Hagerty), still tools around in the ’60 Porsche 356B roadster that she also restored with her father. They didn’t just learn about classic cars; they bonded with them, and with their own father.
“You may ask, is this for training or for fun?” reads a cheeky paragraph on the company website about the restoration projects. “We don’t mind blurring the line.”
As it has grown, Hagerty has managed to maintain the kind of caring and close-knit work environment typically found only in small entrepreneurial firms. It invests heavily in its employees, through generous benefit plans, personalized professional development programs and frequent exposure to the classic car world. As a result, Hagerty employees look after customers enthusiastically and share their passion for classic cars, boats and motorcycles. The loyalty employees feel toward the company is reflected in their work and customers respond with loyalty to Hagerty in return.
Ideas to Consider
Create a One Page Strategic Plan – McKeel Hagerty is a fervent advocate for the “one-page strategic plan” popularized by growth guru Verne Harnish. This one page plan for the entire company is shared with every employee so that the entire workforce knows the company’s top priorities. The one-page plan provides employees with a sense of daily purpose and direction, helping to focus and align the entire organization’s culture toward its most critical goals.
Practice Total Transparency – Each month and quarter, Hagerty’s senior management team provides the entire organization with a detailed update on the operational and financial performance of the company, including customer and employee loyalty scores. Areas of improvement and disappointment are covered in equal detail, so that everyone shares in the ownership of the results.
Foster Shared Passions – A key part of Hagerty’s remarkable culture is its employees’ shared passion for classic cars and boats. The company fosters and nurtures this passion with its own classic car collection, its restoration garage and support for over 2,000 collector events annually. While an interest in cars or boats is not required for employment, Hagerty makes it easy for employees to develop an interest, which fosters lots of interaction and friendships beyond the workplace. As a result, Hagerty’s employees really know and care about each other.