Insuring Rare and Collectible Cars and Boats with McKeel Hagerty

27:20But your valuation tools have been really helpful, that sort of stuff. 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? 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.

27:58But what we realized with our scale is like, We just had way more data points than all of that because, again, people buying cars and sharing them with us, adding, deleting. It was just this big flow. And, yeah, it took a lot of people a lot smarter than I am to build all the, you know, not just the database stuff but the analytics capability around it. 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 U.S. but outside of the U.S., And it's really been a fun part of the business. I'll tell you what, it's a smart team, and I love learning from them.

28:36They teach me stuff every day that I need to know. 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? Oh, no, no. We have our own Hagerty Marketplace platform, which is online auctions. And you've had online classifieds for a long time. How rapidly is the auction side growing? It's growing rapidly. I mean, we have such a supply that 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 has been such a darling in this space, Cars and Bids, the number two in the U.S.

29:24but 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 if the bidders go away, then nobody's happy. The bidders won't put their cars on it. So 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 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.

30:05But 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 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 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.

30:47Then 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 watched them on television. They're fun. Car auctions are super fun. It's live. It's vibrant. It's interesting. Sometimes there's multi-million dollar cars up there selling that you can't even believe anybody would pay multi-million dollars for this car.

31:18And we do that too. I mean, that's why we have Broad Aero. We connect it with some of our Concours events in many cases. They're around the world. We just had our Broad Aero auction at the Concorso at Villa d 'Este, the Villa d 'Este Concorso della Ganza. And that was a really successful sale and super cool place to have an auction right on Lake Como. Yeah, in Italy. In Italy. It looked beautiful. You've been a judge at Pebble Beach for a while. 25 years. I think this is my 25th year. Wow, and I know there was an affiliation with one of the local concourses here. Maybe it's Greenwich? Greenwich, yeah.

31:53That is an event we own, so we produced that just recently. Yeah, it's too close to a holiday weekend. Otherwise, I would be there. Oh, you've got to come. You've got to come. I'm usually out at the beach on Memorial Day weekend. But we'll circle back to that. I'm also a big fan of your YouTube channel. I really like Jason Kamisa'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 guessed? How did YouTube become such a major part of your brand? Well, it's really the de facto platform for people watching kind of introductory level automotive content.

32:43And 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's shifted since the 90s was magazines were the main platform for a long time. then when you got you know the first dedicated uh cable network which was 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.

33:27It is obvious high production value. Like, there are a lot of YouTube channels that are kind of interesting, cars or otherwise. Yes. But the appeal has always been two iPhones and a wireless mic and you can cobble something together. A GoPro, yes. Right. I've seen a bunch of channels that they're using these, not necessarily the GoPros. Right, right. you guys really put a lot of thought and a lot of time, effort, and money into it. Well, we do, and they're not all just drag races. Nothing wrong with drag races. I like them, too. 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.

34:08For example, we also have one of our shows, and by the way, we have a fast channel on Samsung TV, on Amazon Prime. Our content is available out there like a digital television show. Our Barn Find Hunter show for years, you've probably seen it, which is 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 people like it. There's some interesting fascination with the U.S. television audience of finding the treasure in the garage.

34:47And don't you wish it was you who found it? And I find them fascinating. You may have seen one of the shows we produced for a long time. 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 take a big dirty engine apart. And it would all kind of appear to assemble itself on an engine stand. And then it would start. And just, it was mesmerizing. That's the word I was about to say. Mesmerizing, yes. There's another channel that does the same thing with old watches. and rebuilds them. And it's the same sort of why is this so fascinating as Redline.

35:28It's the exact same thing. Coming up, we continue our conversation with McKeel Haggerty, CEO and chairman of Haggerty Specialty Insurance, discussing the collector car community today. I'm Barry Rittholz. You're listening to Masters in Business on Bloomberg Radio. Support for this show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English.

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36:47Advisory services by Public Advisors, LLC, SEC registered advisor. Complete disclosures available at public.com slash disclosures. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise, proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM.

37:25As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance. With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michigan business.org. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.

38:00My extra special guest today is McKeel Haggerty. 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 Chris Craft or are there some other brands that make their way through that? Well, Chris Craft and Century were the two big manufacturers in the United States. There were sort of some more boutique brands like Garwood and Hacker Craft, which were really high end. Hacker Craft those tend to be a little bigger a little bit bigger, triple cockpit kind of style boats for those who are really into the artisanal cheese of the boat world I love the Canadian brands such as?

38:50there 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 the Muskoka Lakes which is just north of Toronto, they're just exquisite, like beautifully built boats. They're considered national treasures up there, so you don't see many of them in the U.S. But that was part of my upbringing. Like when my mom and dad were building the boat business and I was a teenager, it was like, oh, we're going to a boat show, going to Canada, going to Lake Tahoe, going to the Finger Lakes of New York.

39:26That's so interesting. I took some friends to a boat show last year, and the new criss-crafts are shockingly beautiful. Like, they have aged into modernity really well. Like, it's almost like a retro mod. Yes. Because it's very contemporary and very modern, but clearly the design language from way back when. Yeah, I think it's a little bit like that Hinkley crowd where they're trying to find a retro, modern boat, but with kind of retro looks. I love it. So let's keep this on cars away from boats. And there's a quote of yours that I have to start with because 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.

40:18This 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. Yeah, I think there's so many people that 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 their parents weren't into it or you didn't have an uncle or somebody in your life who let you drive in these things, I often recommend people try to get a chance to drive what you think you want because older cars do drive very differently.

40:57Yes. And even if you think of, say, muscle cars from the 60s, they were very fast. I mean, these are cars that are – In a straight line. In a straight line, a 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 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 manually manually I tell the story, the Vette, the 67, it's a lap brake, a lap belt, not a three-point belt.

41:59They couldn't be bothered to put a passenger side mirror on. No. Because, you know, 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-ass Ed Martin is the most expensive car you could possibly buy. But people don't really, really get that. Yeah, and look, different eras of cars come with their own challenges sometimes. I think 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 new quotes and new cars coming into the space are all relatively newer cars, 1980s, 90s, 2000s cars.

42:48Some 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. 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 enjoy the car, drive it. All my kids, I was asked, well, does the radio work in this thing?

43:23I'm like, I have no idea. It's never been on. I'm there to drive. And it's such a fun activity, as you know. Just enjoy driving a car for pleasure. And I also tell one, 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 in the restaurant parking lot at night. So people always ask, why don't you drive them? And I'm like, because I'm not sure I'm going to get home. If you're used to modern cars, you'll be shocked at how terrible the headlights are.

44:02On, forget 60s, 80s-era car, those were not really great headlights. 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. 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. That's right. When you go backwards, you take a lot of things. Forget the blindside warnings and the backup cameras. Just your expectation of field of vision is so different. It's a different kind of attention, driving a vintage car. Yes, it's much more focused. It's more focused, and I love it.

44:39And I encourage people, just try it out. It's a great experience. So what are some of the bigger trends you're seeing in collecting? What's changing these days? Well, again, big story, contrary to 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 or we were probably. Well, doesn't every generation sort of lust after the cars from the high school parking lot? I think that's right. They did, and they're different. And 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.

45:20And 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 they go hang out afterwards. And what you're going to see right now with the 17 - and 18-year-olds car people in these high schools is you're going to see BMWs. You're going to see Audis. You're going to see some various performance Japanese cars. 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 been another huge trend. So not just pickup trucks, but kind of vintage SUVs.

45:53So Jeeps are still, right now, one of the hottest brands. It's huge. Of course, Broncos are one of the hottest things. Of course, if they can afford them, depending on it, a Land Rover or International Scouts. 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. 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.

46:31And just to add on to the answer to your question is, you know, 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, you know, even Porsche, my beloved 911S. 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's a 14 ,000 unit a year manufacturer. Lamborghini, when you add their SUV in, it's an 8 ,000 or 9 ,000 vehicle manufacturer.

47:10I mean, when I was a kid, you never saw a 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. What's crazy is 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. You wouldn't have. Like a Porsche was an exciting thing. It was. So they are building my next generation of customers.

47:47Every one of these manufacturers are like my best friends because they're building the cars that I will be insuring this year and 25 years from now. So your boy Jason Kamisa mentioned he's only a manual driver. I embrace that. Makes the car even that much more difficult to steal. But I'm curious, amongst the trends in collecting, I've been hearing about a move towards analog, towards manual, away from the big dominant screens. What does your data say? Well, it's true. And in fact, you think about some of those very same supercar manufacturers that they signaled years ago. We're getting rid of manuals.

48:31Everything's going to become this super electronic sort of driving experience. Faster on a track. Faster on a track. Yeah, I mean, I think, yeah, and they are. 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'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 extra model with the manual in it.

49:04At a very high price. At a very high price. 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 a 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. Yes. Yes. And what they saw is they were looking at the auction data from our auction companies and others, and suddenly the manual version of something. Premium. Huge premium. Absolute premium. And now manual swaps are showing up in V12 Aston Martins and 430 Ferraris.

49:55I see these all the time. Absolutely. So, again, I think it's the return of the analog. People more interested in driving. I mean, I think we're all trying to absorb what COVID did. COVID was a boom 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 least 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 so there's a data point you guys have referenced 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 inherences.

51:07What is this generational handoff from, I guess we could call them boomer collectors to millennials and Gen Z? What does this mean for the car collecting community? Well, and I think we've all read that there's this huge, gigantic wealth transfer, whatever the headline number is. 65 trillion. I've heard 100 trillion, 70. And our estimate just on that number of 13 million vehicles, 12, 13 million vehicles, is about$570 billion worth of car value. Right now, most of those are held in the hands of the generation of baby boomers. I'm an older Gen Xer. You know, Gen Xers are starting to come into their peak wealth, past peak earnings, into peak wealth years, buying a lot of cars.

51:57But 15 years from now, about a third of that whole market will come loose back. And, again, we're seeing this. Certainly the entry points are different than they were a generation ago where people are interested in sporty cars, trucks, younger kind of, you know, young-timer cars as they refer to them in Europe. And, 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.

52:40It's, we need to teach the next generation how to drive manuals. And it's, you know, it's not that hard to do. 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? Well, even if you did, you and I, neither of us are good enough drivers to really make a difference. Speak for yourself, McKeel. Okay, one second different in a lap time.

53:23Whatever it is, 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. No. But if you're really doing a competitive course, of course not. First of all, the car doesn't stop. The dual clutches so fast, the engine is always engaged. So you're not losing that tenth of a second when the clutch is down and you're losing power. But it still just feels so much more engaging. Related question to the analog and the manual.

54:10So you do a 2025 bull market list. You do one every year. The average model year of featured cars 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 attract? Is it that pre-screen, analog, manual feel, but not quite as old as the 70s, 80s cars? I think so. And I think it's, but it's also, 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's going to be in the open AI IPO and is going to make money and go buy a car.

55:03Older 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. 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.

55:37Same thing right now in this sort of like, say, supercar segment, where a lot of these cars from the 90s and 2000s, 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. And that's not the Bugatti Veyron? Yeah, but no, he loves it. He said, and I'm taking my grandkids and drives in the Bugatti Veyron.

56:11And so, you know, they think it's cool. Yeah, 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? Yeah, well, I think those big headline cars, they attract so much attention, and people just think it's this crazy, very high-end market of very, very rarefied cars. And while that is true, those are the headline-grabbing numbers. The big story is that there's just a much, much wider opportunity for people who want to play in this space.

56:57Every 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 was a hobby that for many, many years was very 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. So very broad-based.

57:31I've noticed a lot more women YouTubers talking about cars. And coming to Cars and Coffee with their cars. and that sort of thing. So 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 the average reality. The average is actually much broader based and much more interesting. So 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.

58:09Mustang. Mustang. Of course. Yeah, other than Ferrari. You say, of course, because I would have said Miata. 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. Mid-90s. And they made over a million of them for the U.S. 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. Right. But same thing with Mustang. And a little more horsepower in the Mustang. A little bit more horsepower. They made a lot of convertibles.

58:43They're manuals. They're automatics if you don't feel comfortable with that. And very, very affordable cars and easy to get serviced. So those would be my two recommendations. Of course, the most collected car, though, still in the United States is a Corvette. And they've been making them forever. There are lots of them. easy to service and not that especially like a c6 or c7 not that expensive for a semi-modern car they're amazing they're amazing cars someone says i'm interested in something uh european a little more interesting sporty where do you send them 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 uh you know whatever Some more entry point there.

59:30That younger generation that I talked about, the sort of 3 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. Yeah, those have aged beautifully, the design of the early BMWs. Someone who 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. Well, then it's still probably, I mean, again, my bias here, I'd still probably say 9-11. But you're going to pick a year that was maybe a slightly off year.

1:00:10They're going to hold their value well. I did a kind of market cap comparison between every 9-11 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. 275s, and they were spectacular. 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, 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, So, I mean, after my very amateurish high school restoration, I spent$100 ,000 or whatever, a little bit more than that, and it was worth about$70 ,000.

1:00:54Right. Well, now it's worth about$300 ,000. No kidding. Yes,$250 ,000,$300 ,000 for a 67S. And people say, like, what's the car worth? What's your 911 worth? I'm like, I don't care. It's my baby. And, like, no one will ever, I and my family will have that car forever. 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. I think those are really sad cars. Right. They've got to be great for business because there's zero risk. Yeah, the claims are low. But they're sad cars. And especially, by the way, there's not a single generation of cars that fares well when it sits around for a long period of time.

1:01:34Tires 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, when there are a lot of customers that we have that like that, my view is go drive it. We sold at our Emilia 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 like, what do you think of that? I'm like, I would rather have the 20 ,000-mile Ferrari Enzo than I could go drive.

1:02:13I mean, just personally, myself, and I congratulated the buyer. Wonderful buy, sir. But I would like to... Please drive it. Please drive it. 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 to put miles on it. 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.

1:02:48And 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. So we're recording this right after Ferrari dropped their new loose electric appliance. I don't even want to call it. Yeah, it's my Ferrari buddies are not big fans of all the new 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. 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?

1:03:50Well, 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's 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.

1:04:26You know, a front engine, slightly less performance. 599, 612. Exactly. Even the 575. Well, and the SUV, the Pearl Sangue. Right. Like people said, they'll never build an SUV. And I remember I was talking to Bob Lutz and he just said, watch. Right. He said, and I'm like, why do you think they will build an SUV, Bob? And he said, because they have to. I was going to say, the Cayenne and the Macan save Porsche. Save Porsche. All right. Yes. Ferrari had to be watching that. If they had to be seeing the Urus sales, which is essentially a rebadged 8 truck from Audi with a whole lot more horsepower, I mean, how did they not do that?

1:05:07They had to. And I think I get it like this particular electric car has 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. 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? My mentors went from kind of macro mentors to micro mentors. And so, you know, in early days, of course, it was my parents.

1:05:45My parents had very different skill sets, 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 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 now I find somebody who's really good at one thing, and I learn from them.

1:06:21I become friends with them. My current lead director on our public company board, Bill Swanson, he was the chairman and CEO of Raytheon. A 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. Really interesting answer. What are some of your favorite books? What are you reading right now? So 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.

1:06:59I was definitely on a music biography stint. So a lot of rock and roll biographies. And then I went through. Give us a few names. Oh, everything from the Keith Richards to Slash to you name it. I mean, 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, to Clive Davis, to those types of folks. For this year, though, my reading theme is all about the founding of America.

1:07:40So I'm reading a lot of kind of American founding stuff. I've just figured it's a good time to do that. So biographies so far this year on George Washington, Benjamin Franklin. 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. A little bit of a slog. Yeah, that's a beast. That's a beast. but I would say one final piece is I was a sci-fi fan forever oh really 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 just read the entire Dune series for the third time in my life and that was fun the Foundation series Asimov Clark I think what I had forgotten is that almost all of those sci-fi authors knew each other Yes.

1:08:35They all kind of subscribe 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. If you kind of have to read into it, but it's fascinating stuff. Larry Niven, Philip K. Dick, any of those? Yes. And, you know, of course, you know, Hitchhiker's Guide to the Galaxy. Oh, wow. So for a little bit of humor. Classic. Yes. What are you streaming these days? Give us your favorite either YouTube or Netflix or even podcast.

1:09:13What's keeping you? Yeah. So, I mean, my workout companion is a lot of podcasts. 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 podcast 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.

1:09:56and it's actually called the Words and Music series and that's been really fun to listen to some of those. Words and music, I'm going to 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 business? I think I've just been, I've been to two different commencement ceremonies. One was my daughter's and another was some friends and all of 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, 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.

1:10:43You got to 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. 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. Really, really interesting. And our final question, what do you know about the world of automobiles or insurance today?

1:11:20might have been useful 30, 40 years ago when you were first ramping up. I think, you know, the world has been predicting the demise of certain parts of the automobile industry for years. You know, and 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. It's like, well, what do you think of EVs? I'm like, I don't know. There were EVs back in 1908. That's right. There were steam cars in 1910. And now, you know, we've been on internal combustion for a long time.

1:11:59I 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. And don't worry about some of the little petty arguments that people can have that, you know, it makes for good maybe cocktail party talk. But I'd like to see the big picture. McKeel, thank you for being so generous with your time. We have been speaking with McKeel Haggerty, chairman and CEO of Haggerty Specialty Insurance. If you enjoy this conversation, well, be sure and check out any of the 648 we've done previously.

1:12:35You 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 Luke is my podcast producer. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.

1:13:19We'll see you next time.

1:13:35At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut.

1:14:08it.

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