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Insuring Rare and Collectible Cars and Boats with McKeel Hagerty · Masters in Business

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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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Speaker 2: This week on the podcast, another extra special guest, Mkhil
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Speaker 2: Haggerty is chairman and CEO of Haggarty Specialty Insurance.
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Speaker 1: Fascinating company. They took a little.
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Speaker 2: Niche wooden boat insure and turned it into a publicly
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Speaker 2: traded company by.
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Speaker 1: Embracing the community around.
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Speaker 2: Collector cars, trucks, boats, etc. I thought this conversation was
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Speaker 2: really quite fascinating, not just as a car guy, but
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Speaker 2: as a business guy, and I think you will also
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Speaker 2: with no further ado, my conversation with Haggarty's Mkhil Haggarty.
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Speaker 3: Mkhil Haggarty, Welcome to Bloomberg. Thanks for having me.
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Speaker 1: So let's start with your backroun.
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Speaker 2: You get a BA in English and Philosophy from Pepperdine
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Speaker 2: and then you get a master's in theology at Saint
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Speaker 2: Vladimir's Orthodox Theological Seminary.
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Speaker 3: What was the plan to become a priest? Yeah, I
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Speaker 3: kind of.
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Speaker 4: I think about my academic career in a couple of phases.
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Speaker 4: Like I was, I was an entrepreneur from the time
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Speaker 4: I was young. I had a bunch of businesses when
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Speaker 4: I was very young and thought I would go study
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Speaker 4: business in college, and I ended up falling in love
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Speaker 4: with philosophy and literature and all these things was philosophy
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Speaker 4: and English major. I was a good student, and I
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Speaker 4: thought I'd get my PhD. But I needed a little
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Speaker 4: break to work on languages and some things. And I
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Speaker 4: learned about Saint Ladimirs which is just north of New
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Speaker 4: York here. It's been kind of near Rye or Scarsdale,
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Speaker 4: and it was this incredible experience because I, you know,
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Speaker 4: I got to work on my languages. I learned a
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Speaker 4: lot about leadership actually at the ee'min area because there's
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Speaker 4: some pretty extraordinary individuals there. And then there is no
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Speaker 4: doubt about it. You are there to study to become
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Speaker 4: a priest. And while that was not my driving reason
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Speaker 4: to go there, they kind of it's a little bit
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Speaker 4: like Michael Corleoni. They kind of drag you in and
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Speaker 4: you know, before you know it, you're suddenly thinking about
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Speaker 4: becoming a priest. I didn't become a priest because then
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Speaker 4: I moved on and started my doctor work in philosophy
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Speaker 4: up in Boston and did not complete that because the
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Speaker 4: family business called and I had worked in it during
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Speaker 4: the summers up until then, and you know, with mom
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Speaker 4: and dad, my two sisters, and all of a sudden,
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Speaker 4: I found myself no longer thinking about exams and dissertation
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Speaker 4: and all those things, and thinking about this really cool business.
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Speaker 1: So let's talk.
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Speaker 2: About this this business. The hagiography is your parents, Frank
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Speaker 2: and Louise. They started Haggarty Insurance Agency in Traverse City, Michigan,
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Speaker 2: for what I never would have guessed was an actual
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Speaker 2: business elector wooden boat.
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Speaker 3: That's right, Like, is are.
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Speaker 2: There enough collector wooden boats to sustain a full business?
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Speaker 1: There is?
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Speaker 4: There are enough wooden boats to ensure to sustain a
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Speaker 4: very small family business, you know, with a few employees.
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Speaker 4: It was kind of a retirement gig for my mom
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Speaker 4: and dad. They had had a general insurance agency and
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Speaker 4: they sold that and they wanted something else to do.
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Speaker 4: And they thought, but there were a couple of principles
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Speaker 4: that were in the back of their mind, which was
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Speaker 4: they wanted a national.
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Speaker 3: Business instead of a local one.
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Speaker 4: They wanted one that was in a niche rather than
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Speaker 4: like sort of a general purpose, and they wanted one
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Speaker 4: that could have like real sustainability over a long period
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Speaker 4: of time. So wooden boats was an unoccupied business space,
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Speaker 4: so literally unmet need they found they matched the unmet
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Speaker 4: need with an interest in that underlying interest in wooden
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Speaker 4: boats and in cars. My dad was a wooden boat
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Speaker 4: vintage boat gui and also a car guy, and so
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Speaker 4: you know, this was just the fun combining the business
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Speaker 4: knowledge with a passion. And again and I kind of
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Speaker 4: all helped out when it was much smaller, and we
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Speaker 4: kind of stumbled into the car insurance business, which was
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Speaker 4: much much larger than the wooden boat business.
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Speaker 2: Even the collector car businesses orders orders of magnitude larger billions.
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Speaker 2: But let's not jump quite far that ahead. You and
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Speaker 2: your dad used to work on cars rebuilding projects. You
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Speaker 2: mentioned you had a couple of side hustles, lawnmowing things
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Speaker 2: like that.
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Speaker 3: Yeah, my apple orchard.
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Speaker 2: You spent five hundred bucks buying a nineteen sixty seven
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Speaker 2: portion nine to eleven s when you were thirteen. Yes,
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Speaker 2: like I wouldn't be allowed to buy a car at thirteen.
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Speaker 2: I was lucky I had a bike and then you
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Speaker 2: and your father rebuild this.
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Speaker 3: That's right.
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Speaker 4: I will also know it was the only really good
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Speaker 4: car deal I've ever done in my life.
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Speaker 3: So just for what it's worth was.
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Speaker 2: I'm going to assume that was the spark that started
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Speaker 2: your enthusiasm.
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Speaker 3: Yeah, it was.
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Speaker 4: You know, my dad was a do it yourself for
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Speaker 4: hobbyist restorer guy in the garage, and both my sisters
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Speaker 4: also restored cars. They were older than I was with him,
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Speaker 4: and then I was the third along and we convinced
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Speaker 4: this older gentleman in our town to sell us this
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Speaker 4: nine to eleven s for five hundred bucks. And I
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Speaker 4: had to mow an awful lot more lawns and to
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Speaker 4: sell a lot more apples out of my orchard to
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Speaker 4: buy the parts to restore the car.
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Speaker 3: But by the time I could drive it was ready
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Speaker 3: and good planning. It was great planning.
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Speaker 4: And I can tell you there was nobody in my
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Speaker 4: high school driving a Porsche, so I would sneak it
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Speaker 4: into the teacher's parking lot because no one would believe
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Speaker 4: that a studentdone. But it's also like back then in
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Speaker 4: the eighties, cars like that were not expensive. They were
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Speaker 4: not considered to be necessarily that valuable. They were just
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Speaker 4: kind of cool, older cars, and so we kind of
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Speaker 4: approached it as a family, like, hey, these are you
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Speaker 4: can get a lot of car for not a lot
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Speaker 4: of money and you can have something really fun to enjoy.
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Speaker 3: And so that was just my life growing up.
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Speaker 2: I love that three hundred sl from the fifties were
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Speaker 2: being sold at a depreciated price in the sixties and seventies.
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Speaker 3: Oh, of course, astonishing well.
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Speaker 4: The most valuable car today people will tell you it
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Speaker 4: was a Ferrari gto nineteen sixty two. They're worth, you know,
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Speaker 4: tens and tens of millions dollars, But in nineteen seventies
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Speaker 4: you could buy them for fifteen grand. There were nothing,
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Speaker 4: and now they're fifty million, sixty million dollars.
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Speaker 2: Unbelievable that that nine to eleven s you restored, still
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Speaker 2: have it.
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Speaker 3: I still have it, still drive it. Of course.
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Speaker 4: It's my first car out every season and the last
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Speaker 4: one I put away.
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Speaker 2: Wow, that's amazing. We could spend a lot of time
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Speaker 2: talking about what else you drive, and.
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Speaker 1: Like, we'll get to that later. I'm curious, when did
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Speaker 1: you first.
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Speaker 2: Realize Haggarty could become something a whole lot larger than
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Speaker 2: a niche wooden boat insurer.
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Speaker 4: But we had already started the boat or the car
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Speaker 4: business in the early nineteen nineties. I had I've had
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Speaker 4: a couple of aha moments, and this one I remember
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Speaker 4: it like we were sitting here today and it was
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Speaker 4: the fall in nineteen ninety five. I was doing my
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Speaker 4: doctoral work in Boston and we were reading Plato's Republic
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Speaker 4: in Greek. Okay, so I'm up in Boston College. We're
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Speaker 4: working on Plato's republican Greek. That's a big slog, yeah,
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Speaker 4: I can tell you. And I was trying to help
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Speaker 4: out the family business kind of from a distance. And
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Speaker 4: the challenge with insurance. It's insurance is an incredible industry.
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Speaker 4: It's stable, there's a lot more interesting stuff to it
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Speaker 4: than people think, but it is just not very sexy
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Speaker 4: to talk about it. Nobody loves talking about insurance, and
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Speaker 4: even with these big brands and stuff today, they still
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Speaker 4: don't want to talk about it very much. And so
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Speaker 4: I was literally sitting in this Plato's Republic class and
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Speaker 4: on the side of my notebook I wrote this thing like,
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Speaker 4: if we would just stop acting like an insurance business
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Speaker 4: and start acting more like a club for car owners,
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Speaker 4: it would just transformed the conversation that you're having with people,
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Speaker 4: because then you're acting more like a car person instead
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Speaker 4: of an insurance person trying to sell a car person
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Speaker 4: something thing, and I literally wrote this idea of like
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Speaker 4: turn Haggarty into a car club.
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Speaker 3: I wrote it in my notebook and I closed my notebook.
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Speaker 4: I went home that night to my apartment, and I
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Speaker 4: dropped out of my PhD program right then, and I
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Speaker 4: went home the next week.
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Speaker 1: Well, let me validate that.
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Speaker 2: Not that you need as a public company, need my validation,
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Speaker 2: full disclosure. I have a few of my cars insured
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Speaker 2: with Haggerty. I'm a member of the club. I get
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Speaker 2: the Driver's Club magazine. But it's obvious in hindsight. Oh,
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Speaker 2: of course you're going to focus on this niche that
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Speaker 2: is kind of ignored, Yes, by the major insurance companies.
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Speaker 2: How challenging was it to convince the rest of the fam, Hey,
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Speaker 2: this is.
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Speaker 1: The way to go.
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Speaker 2: We're not an insurance company selling to car collectors, where
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Speaker 2: car people satisfying a few of the box, checking a
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Speaker 2: few of their boxes.
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Speaker 3: It took me a few years. Yeah, you know, we
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Speaker 3: were a very close family.
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Speaker 4: It was really fun to work together with everybody in
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Speaker 4: those early days. I retired after kind of that late nineties.
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Speaker 4: My mom retired shortly thereafter. I was working with my sisters,
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Speaker 4: so they kind of gave me the enough rope to
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Speaker 4: go test it out that if we just changed the
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Speaker 4: dialogue and acted just we're going to build an automotive
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Speaker 4: branded business that happens to sell insurance, and we're going
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Speaker 4: to do it around this membership concept. It wasn't like
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Speaker 4: no one had ever done something like that. You know,
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Speaker 4: if you think in the early days, Triple A was
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Speaker 4: kind of like that, the Motor Club, that kind of
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Speaker 4: you know, they've they're very different than that. Now if
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Speaker 4: you were to even think of something like AARP, which is,
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Speaker 4: you know, a different sort of segment, like there is
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Speaker 4: a you know there in it. They sell a lot
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Speaker 4: of insurance and they treat this group of people USAA
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Speaker 4: serving military family people and families. It just nobody had
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Speaker 4: ever done it in a business like ours, and so
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Speaker 4: it took a little while to convince them that that
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Speaker 4: was the way to go to market and we could
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Speaker 4: change the way we were thinking. But you mentioned something
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Speaker 4: that was another piece in this which was the next aha,
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Speaker 4: next to hot was that most of these cars were
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Speaker 4: insured by the big insurance companies. So thanks State, Farm,
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Speaker 4: all State, you know today, Progressive, Geico, everybody, and you know,
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Speaker 4: we're a little company, and we had a tiny family business, like,
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Speaker 4: how the heck are you going to compete against these monsters?
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Speaker 4: And so after we got the club kind of up
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Speaker 4: and running, I realized, well, what if we just partnered
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Speaker 4: with these companies rather than competing against them, and said, look,
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Speaker 4: we're we're going to do one thing and one thing only.
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Speaker 3: We're going to be expert in these cars.
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Speaker 4: We know the customers really well, we're building a really big,
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Speaker 4: rich bunch of data, and what if we partnered with them?
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Speaker 4: And so the first big partnership like this we landed
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Speaker 4: how twenty two twenty three years ago, and that was
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Speaker 4: with all State, and all State's huge and huge company.
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Speaker 4: I knew they ensured hundreds of thousands of these cars
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Speaker 4: ago exactly lots of you know, lots of interesting things
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Speaker 4: in that company, and I convinced. I met the CEO
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Speaker 4: at the time, and just through kind of people help
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Speaker 4: connect us, and I said, look, I think I can
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Speaker 4: make you better at this one tiny little thing if
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Speaker 4: you just give us a chance. And they're still a
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Speaker 4: partner today, still grow that program grows every year. And
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Speaker 4: now we've just moved through the entire insurance industry. We've partnered,
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Speaker 4: you know, virtually with all of the big insurance companies.
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Speaker 4: And so today if you go, you know, insure your
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Speaker 4: home and your auto and everything with one of them.
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Speaker 4: But you have a vintage car, collector car, whatever you
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Speaker 4: want to call it, that usually comes to us. And
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Speaker 4: so the big scalability of the business was one show
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Speaker 4: up like a club like this member organization, to partner
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Speaker 4: rather than to compete. And if you can partner, you know,
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Speaker 4: because if you're if you're small, it's impossible to compete
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Speaker 4: against a huge company. But if you partner with them,
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Speaker 4: it changes the game.
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Speaker 2: Well, when you say it's impossible to compete, one of
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Speaker 2: the fascinating things about ensuring an old VET or an
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Speaker 2: old Portie is, you know, any of the big farms
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Speaker 2: are going to charge you fifteen hundred, twenty five hundred
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Speaker 2: a year, you guys, for all right, So I have
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Speaker 2: a sixty seven VET, which is actually my least favorite
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Speaker 2: car to drive.
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Speaker 3: I want to switch switch motor to ask.
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Speaker 2: The three but with a stick Nasau blue over white, spectacular.
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Speaker 2: But it's a pig to drive. But it doesn't matter
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Speaker 2: because I think progressive. It was like twenty two hundred,
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Speaker 2: you guys, were five hundred and change because of the data.
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Speaker 2: You guys know how often these are driven, know the value.
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Speaker 2: You know, they're really not going to get stolen. It's
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Speaker 2: pretty as much as gone in sixty seconds made it
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Speaker 2: look sexy. Everybody knows these cars they're VENs where they
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Speaker 2: are especially something rare and valuable, which the vet is not.
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Speaker 2: It's really fascinating that nobody else saw this until you
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Speaker 2: guys did.
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Speaker 1: How did the pricing model come along?
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Speaker 4: Well, it's you know, and you talked about you drive
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Speaker 4: your car, but you probably don't drive it very much.
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Speaker 4: You probably have daily drivers that you know you drive
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Speaker 4: more and you know, are less concerned about where you
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Speaker 4: park it and that sort of thing. And you know,
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Speaker 4: my late mother passed away just two years ago. I
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Speaker 4: remember asking her, even I'd ask her every year. Her
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Speaker 4: memory wasn't so great towards the end of her life,
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Speaker 4: Like Mom, what made this business special? And she would
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Speaker 4: just say, because people take good care of their toys,
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Speaker 4: of course, And that is the core emotional nugget of
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Speaker 4: this business. You know, people have a toy, they spent
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Speaker 4: real money on it, and they take good care of it.
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Speaker 4: And wherever there is care, there is better insurance risk.
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Speaker 4: So you can charge less. You charge less, you know,
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Speaker 4: you can build marketing around that. You can get a
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Speaker 4: little bit of momentum, but not just a little less.
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Speaker 4: It's not like all beating them by ten percent. It's
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Speaker 4: a fraction of what you pay for regular insurance. Well right,
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Speaker 4: And look, you're the typical sixty seven Corvette owner probably
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Speaker 4: drives that car one thousand, maybe fifteen hundred miles a year,
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Speaker 4: some years less some years.
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Speaker 2: I have half the guys in my car group, and
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Speaker 2: they're almost old guys, but not not exclusively. Some of
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Speaker 2: these guys have ten twenty thirty cars exactly, So if
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Speaker 2: they're driving a car, it's something different.
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Speaker 1: Maybe they're putting five hundred miles a year on.
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Speaker 3: Each car at most.
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Speaker 4: So like one of the things you asked about pricing,
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Speaker 4: So not only is the pricing on the physical car
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Speaker 4: less expensive with us on the liability too. And it's
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Speaker 4: exactly to that point. You can only drive one car
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Speaker 4: at a time. Liability follows the person, not the car.
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Speaker 4: And so we had a ad very early on in
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Speaker 4: the program.
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Speaker 3: We had it.
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Speaker 4: There was a now late collector out in the Pacific
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Speaker 4: Northwest with over two thousand cars, and we sat and
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Speaker 4: we put a name his face on one of our ads,
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Speaker 4: and he said, here's Harold LeMay, our worst nightmare because
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Speaker 4: he has two thousand cars, but we charge him only
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Speaker 4: one time for liability.
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Speaker 1: So how do you is that a fleet insurance?
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Speaker 3: How do you do something like that?
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Speaker 2: Like if someone has more? And I think the line
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Speaker 2: I heard about tattoos lies to cars. Two tattoos is
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Speaker 2: either too few or too many, And if you have
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Speaker 2: half a dozen or a dozen cars, it's probably too
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Speaker 2: many to manage yourself, but too few to hire a
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Speaker 2: full time jay Leno like guy to run it.
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Speaker 4: Most people are space limited, right, If they have enough
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Speaker 4: money to be into it, they end up buying everything
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Speaker 4: that they can afford and still store.
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Speaker 1: Right, So the store is the pastoragt.
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Speaker 2: I'm waiting for permission to build a garage, a detached
15:29
Speaker 2: garage as opposed to my building garage, and that if
15:35
Speaker 2: that gets approved by the town, that's going to be
15:37
Speaker 2: both dangerous and expensive.
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Speaker 3: Well I'm gonna love it though, because then.
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Speaker 2: Because that's six more cars storage for you guys. Really
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Speaker 2: really interesting. Coming up, we continue our conversation with Mkhil
15:50
Speaker 2: Haggerty CEO of the specialty insurance firm, talking about how
15:56
Speaker 2: he built the company into a one and a half
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Speaker 2: billion dollar revenue driver.
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Speaker 1: I'm Barry Ridults. You're listening to Masters in Business.
16:05
Speaker 2: On Bloomberg Radio. I'm Barry Ridults. You're listening to Masters
16:09
Speaker 2: in Business on Bloomberg Radio. My extra special guest this
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Speaker 2: week is Mkhil Haggerty. He is the chairman and CEO
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Speaker 2: of Haggarty Collector Car Insurance. The farm insures every collectible
16:22
Speaker 2: vehicle and a handful of boats for more than almost
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Speaker 2: three million collectors. So twenty twenty five revenues of one
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Speaker 2: point five billion, one point three billion in written premium,
16:36
Speaker 2: a record three hundred and seventy one thousand new members,
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Speaker 2: net income plus ninety one percent. This is a real
16:44
Speaker 2: publicly traded company hgt Y.
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Speaker 4: Yes, wow, that used to have hair when we started
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Speaker 4: all of that, But I you know it, things are
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Speaker 4: going well.
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Speaker 2: So I guess if you're not pulling your hair out
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Speaker 2: of your head, you're you're not public. Let's talk about
17:02
Speaker 2: how you've driven this. One of the interesting insights that
17:07
Speaker 2: seems to have shaped your strategy was that collective cars
17:11
Speaker 2: aren't just financial assets. Their emotional assets, you described them
17:15
Speaker 2: as favorite toys. How did that shape how the firm developed?
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Speaker 3: Well?
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Speaker 4: And we started in the simplest possible way, which we
17:24
Speaker 4: were an insurance agency. You know, you might have mentioned
17:26
Speaker 4: that even early in the first intro, and that's true.
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Speaker 4: That's the easiest way to kind of get into one
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Speaker 4: of these things. You know, as I mentioned, we started
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Speaker 4: with kind of a specialty product, which was ensuring special cars.
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Speaker 4: The product, you know, the insurance policy forms were unique
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Speaker 4: or pricing.
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Speaker 3: We had a unique approach. We had this driver's.
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Speaker 4: Club model that you started really helping that compounding aspect
17:48
Speaker 4: of it.
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Speaker 3: But one of the big.
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Speaker 4: Pieces that I guess I dreamed of is that if
17:53
Speaker 4: we actually started taking real risk and became the insurance
17:56
Speaker 4: company itself, not just an agency selling policies for somebody yeltse,
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Speaker 4: it would be the same customer coming in, but we'd
18:04
Speaker 4: have so much more of a chance to you know,
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Speaker 4: really build a revenue behind it.
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Speaker 3: So the other big piece.
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Speaker 4: After, you know, if my first aha was driver's club,
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Speaker 4: second AHA was you know, really realizing we needed a
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Speaker 4: partnership rather than to compete with the big insurance companies.
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Speaker 3: It was how do we start taking risk?
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Speaker 4: So that that's been a multi multi year, really decade
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Speaker 4: long journey that we started in twenty seventeen, got that
18:28
Speaker 4: up and running, and it was really a big key
18:31
Speaker 4: piece of how we went public in twenty twenty one,
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Speaker 4: and that is that we were going to you know,
18:35
Speaker 4: we had everybody knew we had a unique angle on
18:38
Speaker 4: this market, that our economics looked great in the business,
18:42
Speaker 4: but that we could realize even that much more. And
18:45
Speaker 4: so that's really been the next big piece of all
18:47
Speaker 4: of this, and it all kind of compounds on itself
18:50
Speaker 4: because if you in Sure Car, you we use the
18:55
Speaker 4: club to kind of engage people. You know, you mentioned
18:58
Speaker 4: reading the Hager Driver's Club magazine. I mean that is
19:00
Speaker 4: that is by the way, I don't think the word
19:02
Speaker 4: insurance is mentioned in that magazine.
19:04
Speaker 3: It's a car magazine and.
19:06
Speaker 1: The Cars and Roads.
19:07
Speaker 4: Really yes, and it is the now highest circulation car
19:11
Speaker 4: magazine in the world.
19:12
Speaker 2: No, kid, I did not know that. That's really that's
19:15
Speaker 2: really interesting. So the evolution from insurance to an automotive
19:20
Speaker 2: lifestyle brand goes beyond the club membership, goes beyond the magazine, events, auctions,
19:28
Speaker 2: valuation data.
19:31
Speaker 1: Walk us through how that all evolved.
19:33
Speaker 3: Yeah, I think, and I was.
19:35
Speaker 4: I was a big fan of car magazines as a
19:37
Speaker 4: big fan of automotive media. I mean that's how I
19:39
Speaker 4: read my way into understanding the car world and going
19:42
Speaker 4: to events. So and I always remember somebody told me
19:46
Speaker 4: once that if you're gonna, if you're gonna go into
19:47
Speaker 4: a niche business that you're really proud of, you kind
19:50
Speaker 4: of need to have. You need to have the high
19:52
Speaker 4: ground on your side. And for me, the high ground
19:54
Speaker 4: was if I could have a media property that where
19:57
Speaker 4: we would you know, kind of have that intellectual high
20:00
Speaker 4: that would help.
20:01
Speaker 3: The other piece is the data aspect of it.
20:04
Speaker 4: When I was, you know, growing the business and the team,
20:07
Speaker 4: you know, we have incredible teams. We're out there trying
20:09
Speaker 4: to figure it out. Valuing these cars was so tricky
20:12
Speaker 4: because there was a lot of opinions about what cars
20:15
Speaker 4: were worth, but not a lot of really good data.
20:18
Speaker 4: And so, you know, as we were investing in the
20:20
Speaker 4: media pieces talking about cars and entertaining people, we built
20:24
Speaker 4: the data resources. We call it our Automotive Intelligence Group.
20:28
Speaker 4: We have by far the richest sets of data about
20:31
Speaker 4: how to value these things. And it's down to that
20:33
Speaker 4: VIN or serial number you know, you mentioned how does
20:36
Speaker 4: a big insurance.
20:37
Speaker 3: Company, you know, why didn't they do it?
20:39
Speaker 4: And I remember this conversation years ago in one of
20:42
Speaker 4: those partner discussions where I mentioned the CEO as a
20:44
Speaker 4: car guy, really wanted to kind of compete with us,
20:47
Speaker 4: wasn't sure if you wanted to partner with us, And
20:49
Speaker 4: I said, well, do you know what a nineteen sixty
20:51
Speaker 4: nine Camaro is? And he said, I sure, do you
20:54
Speaker 4: know he's kind of pretty happy with himself.
20:56
Speaker 3: And I said, you may not know that.
20:59
Speaker 4: In nineteen sixteen and the Camaro came in one hundred
21:01
Speaker 4: and forty seven different variants, and that year the least
21:05
Speaker 4: expensive one was worth about eleven grand and the most
21:08
Speaker 4: valuable one was worth about one point one million. And
21:11
Speaker 4: you can't tell the difference by looking at them from
21:13
Speaker 4: the outside. You have to understand what that serial number is.
21:16
Speaker 4: And I said, we built a patented serial number decoder
21:19
Speaker 4: for all cars pre nineteen eighty one so that we
21:21
Speaker 4: could understand our universe and start providing that data. And
21:25
Speaker 4: that's why our partners like us. But it's real asset
21:28
Speaker 4: to have that kind of data to and then build
21:30
Speaker 4: on it every year. You know, you mentioned three hundred
21:32
Speaker 4: and seventy one thousand new customers. We'll do quite a
21:34
Speaker 4: bit more than that in twenty twenty six. That those
21:37
Speaker 4: are all just it's not just insurance or revenue, it's
21:39
Speaker 4: also data coming our way.
21:40
Speaker 3: What are people buying, what are they insuring them for?
21:43
Speaker 3: What do they sell?
21:44
Speaker 4: You know, when somebody sells a car, it's also a
21:46
Speaker 4: data point, and so for us that that kind of
21:49
Speaker 4: data piece. And again it's all a big not just
21:53
Speaker 4: because I'm a car person. I view it as a flywheel.
21:56
Speaker 4: It's a flywheel and it all kind of spins, and
21:58
Speaker 4: insurance is a beautiful thing, but the rest of it
22:00
Speaker 4: speeds up the flywheel.
22:01
Speaker 2: Yeah, to say the very least. So the valuation tools
22:04
Speaker 2: you have are really interesting. The bull market list you
22:08
Speaker 2: have has become very influential. I actually reference some of
22:12
Speaker 2: your valuation tools in a chapter on my book on
22:18
Speaker 2: selection bias.
22:20
Speaker 3: Every time some.
22:21
Speaker 2: Car goes for a new record high, there's always a
22:24
Speaker 2: bunch of media coverage and they talk about, look at
22:26
Speaker 2: what a great investment this is, and it's like, no,
22:29
Speaker 2: that's all survivorship.
22:30
Speaker 1: I show me the other ten. Don't show me what was.
22:33
Speaker 2: The best car of the past fifty years. What car
22:35
Speaker 2: are you going to buy now to put away for
22:37
Speaker 2: the next fifty years. That's a much harder question. You
22:40
Speaker 2: don't know the answer, but your valuation tools have been
22:44
Speaker 2: really helpful that sort of stuff.
22:46
Speaker 1: How did you build that capabilities?
22:48
Speaker 2: It simply just hey, every data point we come across
22:52
Speaker 2: from clients, we're going to suck into a database and figure.
22:56
Speaker 3: Out that was exactly it.
22:57
Speaker 4: I mean, if most media outlets that weren't part of
23:02
Speaker 4: our world, if they were covering the space, they were
23:05
Speaker 4: using a lot of anecdotal information kind of dealer fed information,
23:09
Speaker 4: or just looking at public auctions. And I love public
23:11
Speaker 4: auctions too, Like you can learn a lot from watching
23:14
Speaker 4: what all the different auction companies do. And now with
23:16
Speaker 4: so many good online places, it's like even more data.
23:20
Speaker 4: But what we realized with our scale is like we
23:22
Speaker 4: just had way more data points than all of that
23:25
Speaker 4: because again, people buying cars and sharing them with us,
23:28
Speaker 4: adding to leting, it was just this big flow. And yeah,
23:32
Speaker 4: it took a lot of people a lot smarter than
23:34
Speaker 4: than I am, to build all the you know, the
23:36
Speaker 4: not just the database stuff, but the analytics capability around it.
23:40
Speaker 3: And now with AI it's even better.
23:42
Speaker 4: And then as we started realizing we could get other
23:45
Speaker 4: data sources that help us validate even more, not just
23:48
Speaker 4: in the US, but outside of the US. It's really
23:51
Speaker 4: been a fun part of the business. It's I'll tell
23:54
Speaker 4: you what there's it's a smart team and I love
23:57
Speaker 4: learning from them.
23:58
Speaker 3: They teach me stuff every day that I need to know.
24:00
Speaker 2: So you mentioned auctions and online auctions in addition to
24:05
Speaker 2: Bring a Trailer and cars and Bids and Peak Car,
24:09
Speaker 2: you guys are now going to get into online auctions
24:13
Speaker 2: for your client's cars or you just partner.
24:16
Speaker 4: With Oh no, no, we have a Hagardy marketplace platform which
24:19
Speaker 4: is uh online auctions.
24:23
Speaker 2: And then you've had online classifying classify time. How How
24:27
Speaker 2: rapidly is the auction side growing.
24:29
Speaker 3: It's growing rapidly.
24:31
Speaker 4: I mean, we just we have such a supply that
24:34
Speaker 4: you we have a lot. We have way more supply
24:37
Speaker 4: than than you think. And if you think about some
24:39
Speaker 4: of those other great companies like Bring a Trailer's been
24:41
Speaker 4: such a darling in this space. Cars and Bids the
24:44
Speaker 4: number two in the US. But there's a supply and
24:47
Speaker 4: demand balance that everybody has to strike because if you
24:51
Speaker 4: flood a digital marketplace with too much supply, then the
24:54
Speaker 4: bidders go away, and so you and if the bidders
24:57
Speaker 4: go away, then nobody's happy. The bidders won't put their
24:59
Speaker 4: cars on it. So it's this it's a fast build,
25:02
Speaker 4: but it's steady. That the live auction side of the
25:05
Speaker 4: business brought Arrow, which was an acquisition we did after
25:09
Speaker 4: going public. That's a remarkable business because I had followed
25:13
Speaker 4: that industry for a long time around the world. But
25:16
Speaker 4: it's all about getting the right team, and in my mind,
25:19
Speaker 4: because I'm very protective of our brand and our reputation,
25:23
Speaker 4: we had to have the kind of team that wasn't
25:25
Speaker 4: prepared to build the number one live auction business, but
25:27
Speaker 4: they have to do it in a way that I'm
25:29
Speaker 4: proud of because and I'm not saying that, you know,
25:31
Speaker 4: it's all good or bad, but I wanted to be
25:35
Speaker 4: I wanted to be very proud of the outcome because
25:38
Speaker 4: things will go wrong. You have to make things right
25:39
Speaker 4: for customers. Sometimes cars that people bring to you to
25:44
Speaker 4: sell aren't described exactly as they actually are, and you
25:48
Speaker 4: have to find that out and politely tell them, well,
25:50
Speaker 4: I'm not sure this is a million dollar car it's
25:52
Speaker 4: one hundred thousand dollars car, and you know, sorry, if
25:55
Speaker 4: you wanted us to sell for one hundred thousand, we will,
25:58
Speaker 4: but we're not selling it for a million because it's
26:00
Speaker 4: our reputation too. And so again, the way I think
26:04
Speaker 4: about it now is most people come to us to
26:07
Speaker 4: ensure a car, then they buy the membership thing, and
26:11
Speaker 4: we engage them and do media and a lot of
26:12
Speaker 4: fun stuff, invite them to our events, and about every
26:15
Speaker 4: seven years on average, somebody buys or sells a car,
26:18
Speaker 4: and that's where I want to be there and present
26:20
Speaker 4: in their minds so that we help them on that
26:22
Speaker 4: transactional side.
26:24
Speaker 3: And plus you've.
26:25
Speaker 4: Probably been to auctions or watched them on television. Is
26:28
Speaker 4: they're fun, Like car auctions are super fun. You know,
26:31
Speaker 4: it's live, it's viber, and it's interesting. Sometimes there's multimillion
26:35
Speaker 4: dollar cars up there selling that you can't even believe
26:37
Speaker 4: anybody would pay multimillion dollars for this car, And we
26:41
Speaker 4: do that too. I mean, that's why we have brought
26:43
Speaker 4: Arrow and we connect it with some of our concore events.
26:45
Speaker 3: In many cases they're around the world. We just had our.
26:49
Speaker 4: Broad Arrow auction at the Concourse so at Villadeste, the
26:53
Speaker 4: Villadesta Concourse, So Delagonza, and that was a really successful
26:56
Speaker 4: sale and super cool place to have an auction right
26:59
Speaker 4: on Lake Como in Italy, and Italy looks beautiful.
27:02
Speaker 2: You've been a judge at Pebble Beach for a while.
27:07
Speaker 3: I know this five years. I think this is my
27:09
Speaker 3: twenty five wow.
27:10
Speaker 2: And I know there was an affiliation with one of
27:12
Speaker 2: the local concourses here.
27:13
Speaker 3: Maybe it's Grantwich Greenwich Cheah. That is an event we own,
27:16
Speaker 3: so we produced that just recently.
27:18
Speaker 2: So yeah, that's ah, it's too close to a holiday weekend.
27:22
Speaker 3: Otherwise I would be there. Oh you gotta come.
27:25
Speaker 2: It's I'm usually out at the beach on Memorial Day.
27:28
Speaker 2: We agon but but we'll circle back to that. I'm
27:33
Speaker 2: also a big fan of your YouTube channel. I really
27:37
Speaker 2: like Jason Camiz's work. I've learned a lot about cars
27:40
Speaker 2: that I think I know and then he does a
27:42
Speaker 2: deep dive into a particular model and I'm like, I
27:46
Speaker 2: didn't know that about the Toyota Supra.
27:48
Speaker 1: Who would have Who would have guessed?
27:51
Speaker 2: How did YouTube become such a major part of your brand?
27:55
Speaker 4: Well, it's it's one of the well it's really the
27:58
Speaker 4: de facto platform for people watching kind of introductory level
28:03
Speaker 4: automotive content. And obviously lots of brands are putting stuff
28:07
Speaker 4: out there. But what we realized is if you think
28:11
Speaker 4: about the big sort of arc of how people have
28:14
Speaker 4: learned about or consumed automotive media, where it's shifted since
28:18
Speaker 4: the nineties was magazines were you know, the main platform
28:21
Speaker 4: for a long time. Then when you got you know,
28:24
Speaker 4: the first dedicated cable network, which was Autoweek speed Vision,
28:29
Speaker 4: you got some of those you started seeing auctions on there.
28:32
Speaker 4: But then a lot of that content started migrating to YouTube.
28:36
Speaker 4: But what I wanted to do was do it like
28:38
Speaker 4: as the same high quality like we were doing in
28:40
Speaker 4: the magazine, so higher total pros shoot the stuff really well,
28:45
Speaker 4: you know, great cameras, great locations, all of that stuff.
28:48
Speaker 2: It is obvious high production value. Like there are a
28:52
Speaker 2: lot of YouTube channels that are kind of interesting cars
28:55
Speaker 2: or otherwise, but the appeal has always been two iPhones
29:01
Speaker 2: and a wireless mic and a go bro tobbles Go
29:05
Speaker 2: Bro Right. I've seen a bunch of channels that they're
29:09
Speaker 2: they're using these not necessarily the go pros.
29:15
Speaker 1: Uh, you guys, really.
29:16
Speaker 2: Put a lot of thought and a lot of time,
29:18
Speaker 2: effort and money into them.
29:19
Speaker 3: Well, we do.
29:19
Speaker 4: And they're not all just drag races. Nothing wrong with
29:22
Speaker 4: drag races. I like them too. It kind of is
29:24
Speaker 4: a it's a kind of data point about what makes
29:26
Speaker 4: a car cool. But I think Jason just takes it
29:28
Speaker 4: to a whole new level. For example, we also have
29:31
Speaker 4: a you know, one of our one of our shows,
29:33
Speaker 4: and by the way, we also have you know, we
29:34
Speaker 4: have a fast channel on Samsung TV, on on Amazon Prime.
29:38
Speaker 4: You know, our content is available out there like a
29:40
Speaker 4: digital television show. Our Barnfine Hunter show for years, you've
29:46
Speaker 4: probably seen it, which is, you know, this incredible talent
29:49
Speaker 4: in Tom Cotter going around and finding great cars in
29:52
Speaker 4: barns and kind of doing the big reveal like an
29:55
Speaker 4: antiques road show kind of concept, but in the garage
29:58
Speaker 4: rather than brought to some studios.
29:59
Speaker 3: Some and people like it.
30:01
Speaker 4: There's like some interesting fascination with the US television audience
30:06
Speaker 4: of finding the treasure in the garage and don't you
30:09
Speaker 4: wish it was you who found it?
30:11
Speaker 3: And I find them fascinating.
30:13
Speaker 4: We even you may have seen one of the shows
30:16
Speaker 4: we produced for a long time they're kind of winding down.
30:18
Speaker 4: But it was called Redline Rebuild, and it was where
30:21
Speaker 4: we would do these time laps rebuilding of an engine,
30:24
Speaker 4: where you know, you take a big, dirty engine apart
30:27
Speaker 4: and it would all kind of like appear to assemble
30:28
Speaker 4: itself on an engine stand and then it would start
30:32
Speaker 4: and just it was mesmerizing.
30:34
Speaker 1: That's the word I was about.
30:36
Speaker 2: Yeah, there's another channel that does the same thing with
30:42
Speaker 2: old watches, oh and rebuilds them. And it's the same
30:46
Speaker 2: sort of why this is so fascinating, Yes, as Redline,
30:49
Speaker 2: it's the exact same same thing. Coming up, we continue
30:53
Speaker 2: our conversation with Nikhil Haggerty, CEO and chairman of Haggarty's
30:57
Speaker 2: Specialty Insurance, discussing the electric car community.
31:01
Speaker 1: Today. I'm Barry Ridults.
31:03
Speaker 2: You're listening to Master's Business.
31:05
Speaker 1: On Bloomberg Radio. I'm Barry Ridults.
31:08
Speaker 2: You're listening to Masters in Business on Bloomberg Radio. My
31:12
Speaker 2: extra special guest today is Mikhail Hagerty. He is the
31:15
Speaker 2: CEO and chairman of the namesake specialty insurance company specializing
31:21
Speaker 2: in collectible cars automotive everything from cars, truck's, military vehicles,
31:28
Speaker 2: including classic wooden boats are those old Chriscraft or are
31:33
Speaker 2: there some other brands that make the way.
31:35
Speaker 4: Chris Craft and Century were the two big manufacturers in
31:38
Speaker 4: the United States. There were sort of some more boutique
31:41
Speaker 4: brands like Garwood and Hackercraft, which were really high end craft.
31:47
Speaker 3: I've Hackercraft. Those are big, tend to be a little bigger, right,
31:50
Speaker 3: a little bit.
31:50
Speaker 4: Bigger, triple cockpit kind of style boats for those who
31:54
Speaker 4: are really into the artisanal cheese of the of the
31:57
Speaker 4: boat world.
31:58
Speaker 3: I love the Canadian brand so well.
32:02
Speaker 4: There was a whole group of really fine boat builders
32:04
Speaker 4: up there, Manette, Shield, Barnes, Gravett, brands that most Americans
32:10
Speaker 4: would not know of. But if you ever get a
32:12
Speaker 4: chance to go up to like the Muskoka Lakes, which
32:14
Speaker 4: is just north of Toronto, it's they're just exquisite, like
32:19
Speaker 4: beautifully built boats. They're like considered national treasures up there,
32:23
Speaker 4: so you don't see many of them in the US.
32:26
Speaker 3: But that's that's just spent. That was part of my upbringing.
32:28
Speaker 4: Like when when we were my mom and dad were
32:30
Speaker 4: building the boat business and I was a teenager of
32:32
Speaker 4: a Psychi We're going to going a boat show, going
32:35
Speaker 4: to Canada, going to Lake Tahoe going to the finger Lakes.
32:37
Speaker 3: That's so interesting.
32:38
Speaker 2: I took some friends to the boat show last year
32:43
Speaker 2: and the new chrisscrafts are shockingly beautiful, like they have
32:48
Speaker 2: aged into modernity really well. Like it's almost like a
32:53
Speaker 2: retro modes because it's very contemporary and very modern, but
32:59
Speaker 2: clearly design language from way back when. Yeah.
33:02
Speaker 4: There, I think it's a little bit like that Hinckley
33:04
Speaker 4: crowd where they're trying to find a retro modern boat
33:07
Speaker 4: but with kind of retro looks and.
33:10
Speaker 3: So love it.
33:11
Speaker 2: So let's let's let's keep this on cars away from boats.
33:16
Speaker 2: And there's a quote of yours that I have to
33:19
Speaker 2: start with because it's I really like it. The best
33:22
Speaker 2: piece of advice is to buy the car you want
33:25
Speaker 2: to drive, and then buy the best example you can afford.
33:30
Speaker 2: This may sound obvious, but not all vintage cars drive
33:34
Speaker 2: the way people hope they would. So there's nothing in
33:38
Speaker 2: that I disagree with discuss.
33:41
Speaker 4: Yeah, I think there's so many people that they they
33:44
Speaker 4: envision someday when they have that little bit of extra resources.
33:48
Speaker 4: You know, that's going to be my toy. I want
33:50
Speaker 4: to get into the car world. And if they weren't
33:52
Speaker 4: one hundred percent in this their whole life, or they
33:55
Speaker 4: you know, their parents weren't into it, or you didn't
33:57
Speaker 4: have an uncle or somebody in your life who elects
33:59
Speaker 4: you drive in these things. I often recommend people try
34:03
Speaker 4: to get a chance to drive what you think you want,
34:06
Speaker 4: because the older cars do drive very differently. Yes, and
34:09
Speaker 4: even if you think of say muscle cars from the sixties,
34:12
Speaker 4: they were very fast. I mean, these are cars that
34:14
Speaker 4: are in a straight line and a straight line a
34:16
Speaker 4: lot of power. They do not stop or turn as
34:19
Speaker 4: well as you think, and you just have to get
34:22
Speaker 4: used to that. I mean, I love cars of all generations.
34:25
Speaker 4: I love driving very early cars. I have some newer cars,
34:29
Speaker 4: and I always just have to kind of center myself
34:31
Speaker 4: when I get behind the wheel, to remember, like, okay,
34:34
Speaker 4: this is this is not a this is not my
34:36
Speaker 4: Porscha techon, which is you know, like this incredible piece
34:40
Speaker 4: of technology, you know, electric car. It's a vintage internal
34:44
Speaker 4: combustion car with funky brakes, and you have to be
34:46
Speaker 4: ready for it. So I always recommend people drive them
34:50
Speaker 4: and recognize that maybe it had air conditioning, maybe the
34:54
Speaker 4: air conditioning doesn't work, it doesn't matter like roll down
34:58
Speaker 4: the window and to enjoy yourself.
35:01
Speaker 3: Manually, manually.
35:02
Speaker 1: And I tell the story the vet the sixty seven.
35:06
Speaker 1: It's a lap break. Lap belts is not a three
35:09
Speaker 1: point belt.
35:10
Speaker 2: They couldn't be bothered to put a passenger side mirror on, no,
35:14
Speaker 2: because you know, what do you what are you need
35:15
Speaker 2: to see?
35:16
Speaker 1: And the steering is just beastly.
35:19
Speaker 2: But I also like the concept of buy the best
35:22
Speaker 2: example you can afford. And I find myself constantly saying
35:26
Speaker 2: to people a cheap asst In Martin is the most
35:29
Speaker 2: expensive car you could possibly buy.
35:33
Speaker 1: But people don't really really get that.
35:35
Speaker 4: Yeah, and they're you know, look different, different eras of
35:38
Speaker 4: cars come with their own challenges sometimes, you know, I
35:41
Speaker 4: think as as we're seeing this onslaught of new generations
35:47
Speaker 4: coming in and wanting to buy slightly newer cars. I mean,
35:49
Speaker 4: it's sixty whatever percent of all of our you know,
35:53
Speaker 4: new quotes and new cars coming into the space are
35:55
Speaker 4: all like relatively newer cars. Car know, nineteen eighties, nineties,
35:58
Speaker 4: two thousands cars. Some of those cars, for example, it
36:01
Speaker 4: may not be a mechanical issue that can drive you
36:04
Speaker 4: a little crazy, it's an electrical issue that will drive
36:06
Speaker 4: you a little crazy if you think of, you know,
36:09
Speaker 4: some of the screens and the CD players and all
36:12
Speaker 4: the little control things that back in nineteen ninety whatever
36:15
Speaker 4: was you know, the biggest whizbang feature. Well, it doesn't
36:18
Speaker 4: work so well anymore. The car runs fine, but you
36:21
Speaker 4: know you're not going to be able to use the
36:23
Speaker 4: antiquated NAV system. I just tell people like, it'll relax,
36:27
Speaker 4: it's fine, and you know, enjoy the car.
36:30
Speaker 3: Drive it. You know, all my kids I always asked, like,
36:32
Speaker 3: well does the radio work in this thing.
36:34
Speaker 4: I'm like, I have no idea, it's never been on.
36:37
Speaker 4: I'm there to drive, and it's such a fun activity.
36:41
Speaker 4: As you know, they've gone, just enjoy it, enjoy driving
36:44
Speaker 4: a car for pleasure. And I also tell one, you know,
36:49
Speaker 4: the first thing I tell people who's sort of new
36:50
Speaker 4: to the space, like, well, I want to take it
36:52
Speaker 4: out to dinner, And I'm like, make sure you take
36:54
Speaker 4: it out during the day first a few times, because
36:57
Speaker 4: sometimes cars leave you in the restaurant parking lot at night.
37:02
Speaker 4: So people, if you drive them, and I'm like, because
37:04
Speaker 4: I'm not sure I'm going to get home.
37:06
Speaker 2: If you're if you're used to modern cars, you will
37:09
Speaker 2: be shocked at how terrible the headlights are on Forget
37:14
Speaker 2: sixties eighties era's car.
37:16
Speaker 1: Those were not really great headlights.
37:19
Speaker 3: They weren't great. They're not dangerous or anything. You just
37:21
Speaker 3: have to be aware that they don't have all the
37:23
Speaker 3: modern technology.
37:24
Speaker 2: Well, when all the headlights were that way, you just said,
37:28
Speaker 2: this is what the lighting is and you had to
37:30
Speaker 2: be aware of it.
37:30
Speaker 3: That's right.
37:31
Speaker 2: It's when you go backwards, you take a lot of things.
37:34
Speaker 2: For forget the blind side warnings and the backup cameras.
37:38
Speaker 2: Just your expectation of field of vision is so different.
37:43
Speaker 2: So so let's.
37:44
Speaker 3: It's a different kind of attention driving.
37:46
Speaker 1: A yeah car, it's much more focused.
37:48
Speaker 4: It's more focused, and I love it, and you know,
37:51
Speaker 4: I encourage people, you know, just try it out.
37:53
Speaker 3: It's a it's a great experience.
37:55
Speaker 2: So, so, what are some of the bigger trends you're
37:58
Speaker 2: seeing in collecting what what's changing these days?
38:02
Speaker 4: Well, again, big big story, you know, contrary to know
38:05
Speaker 4: data that we were reading a few years ago, is
38:07
Speaker 4: the next generations are absolutely into cars.
38:09
Speaker 3: They like them.
38:10
Speaker 4: They're just into different kind of cars than our parents were.
38:13
Speaker 3: We were.
38:13
Speaker 2: Probably, Well, doesn't every generation sort of lust after the
38:17
Speaker 2: cars from the high school parking lot.
38:19
Speaker 3: I think that's right, they did, and they're different.
38:21
Speaker 4: And I'm one of my little cottage industry things that
38:24
Speaker 4: I do is if I remember driving anywhere near a
38:26
Speaker 4: high school parking lot, I look to see where the
38:29
Speaker 4: young car people park their cars, and they usually park
38:33
Speaker 4: them in the back of the parking lot and not
38:34
Speaker 4: up near the school, and they all park next to
38:36
Speaker 4: each other. So then go hang out afterwards. And what
38:38
Speaker 4: you're going to see right now of a butt with
38:40
Speaker 4: the seventeen and eighteen year old's car people in these
38:43
Speaker 4: high schools is you know, you're going to see BMW's,
38:47
Speaker 4: You're going to see Audi's, You're going to see some
38:49
Speaker 4: you know, various performance Japanese cars. You know, you're not
38:51
Speaker 4: going to see anything fancy. They can't afford them, but
38:54
Speaker 4: that's the cars they're starting with. Trucks are, of course
38:57
Speaker 4: another big entry point and it's another another huge trend,
39:01
Speaker 4: so not just pickup trucks, but kind of vintage SUVs.
39:05
Speaker 3: So jeeps are still right now one of the hottest brands.
39:08
Speaker 3: It's huge.
39:09
Speaker 4: Of course, Broncos are one of the hottest things. Of course,
39:12
Speaker 4: if they can afford them. You know, depending on it,
39:14
Speaker 4: a land Rover or International Scouts. These are the cars
39:18
Speaker 4: that people are interested in because so many cars today
39:21
Speaker 4: are SUVs anyway, and so the vintage version of them
39:24
Speaker 4: are one of these kind of more off road vehicles,
39:26
Speaker 4: and there's a big industry of modifying them, making them
39:29
Speaker 4: work a little bit better.
39:31
Speaker 3: And so that's another big trend.
39:33
Speaker 4: So again, next generation trucks, I guess I would say,
39:37
Speaker 4: I mean flying over the top of the whole industry,
39:40
Speaker 4: which you know, at the top top end of the market.
39:43
Speaker 4: And just to add on to the answer to your
39:45
Speaker 4: question is, you know, the ultra luxury kind of supercar
39:50
Speaker 4: manufacturers are making more cars than ever ever before, and
39:54
Speaker 4: so you think of those brands like Ferrari or Lamborghini
39:57
Speaker 4: or Bentley or you know even portion beloved nine to
40:00
Speaker 4: eleven ass those companies are just building a lot more
40:03
Speaker 4: cars and pumping them out into the market at price
40:06
Speaker 4: points that were different than they used to. So you
40:09
Speaker 4: know when Ferrari or Lamborghini were building hundreds of cars
40:12
Speaker 4: a year, well now Ferrari's a fourteen thousand unity year manufacturer.
40:16
Speaker 4: Lamborghini when you add their suv in, it's an eight
40:18
Speaker 4: or nine thousand vehicle manufacturer. I mean, when I was
40:22
Speaker 4: a kid, you never saw Lamborghini unless you just happen
40:24
Speaker 4: to be in Beverly Hills or Palm Beach or something.
40:27
Speaker 4: And now they're everywhere. I mean even in my little
40:29
Speaker 4: town in northern Michigan, they're a couple Lamborghinis driving around.
40:32
Speaker 4: I'm like, oh, my goodness, you know, that's amazing.
40:34
Speaker 1: And so what's crazy is where I live.
40:37
Speaker 2: I'm fifteen minutes from a Ferrari dealer, two Porsche dealers,
40:43
Speaker 2: the Bentley Lambeau dealer, and I take it for granted
40:46
Speaker 2: I see these cars all the time. But as a kid,
40:49
Speaker 2: you hardly ever saw these around. You wouldn't have like
40:52
Speaker 2: a Porsche was an exciting thing.
40:54
Speaker 3: It was.
40:55
Speaker 4: So they are building my next generation of customers. Every
40:59
Speaker 4: one of these manu facturers are like my best friends
41:01
Speaker 4: because they're they're building the cars that I will be
41:04
Speaker 4: ensuring this year and twenty five years from now.
41:07
Speaker 2: So so your boy Jason Kamisa mentioned he's only a
41:12
Speaker 2: manual driver. I embrace that makes the car even that
41:17
Speaker 2: much more difficult to steal. But I'm curious amongst the
41:23
Speaker 2: trends in collecting, I've been hearing about a move towards analog,
41:27
Speaker 2: towards manual, away from the big dominant screens.
41:31
Speaker 3: What does your data say, Well, it's true.
41:34
Speaker 4: And in fact, you know, you think about some of
41:36
Speaker 4: those very same supercar manufacturers that you know, we're you know,
41:39
Speaker 4: they signaled years ago we're getting rid of manuals. You know,
41:42
Speaker 4: everything's going to become this super electronic sort of driving experience,
41:46
Speaker 4: faster on a tracks track.
41:49
Speaker 3: Yeah, I mean, I think, yeah that and they are.
41:51
Speaker 4: And by the way, the one nice thing about the
41:53
Speaker 4: PDK if you drive them in the winter, like I
41:55
Speaker 4: happen to love driving Porsches in the winter, PDK is
41:58
Speaker 4: pretty nice in the snow for what it's But setting
42:00
Speaker 4: that aside is I'm just totally impressed that many of
42:05
Speaker 4: these car companies are kind of going back on what
42:08
Speaker 4: they said they were going to be doing and starting
42:10
Speaker 4: to not reintroduce manuals, but they're producing another extra model
42:14
Speaker 4: with the manual.
42:15
Speaker 1: In at a very high price.
42:17
Speaker 2: The Porschie Sts or the Sport or all the GT
42:23
Speaker 2: threes if you want a manual. My GTS was the
42:27
Speaker 2: last year it came with a manual, which was twenty
42:31
Speaker 2: four and the turbo.
42:33
Speaker 1: I think twenty thirteen was the last year with a
42:36
Speaker 1: manual something like that.
42:37
Speaker 2: So it's amazing they took the supply away and said,
42:41
Speaker 2: all right.
42:41
Speaker 1: If you want a manual, give it to you.
42:44
Speaker 3: But it's three hundred thousand dollars. Yes.
42:46
Speaker 4: And what they saw is they were looking at the
42:48
Speaker 4: auction data, like from our auction companies and others, and
42:52
Speaker 4: suddenly the manual version of something huge, absolute premium.
42:56
Speaker 2: And now manual swaps are showing up in in V
43:02
Speaker 2: twelve Aston Martin's and four thirty Ferraris.
43:06
Speaker 1: I see these all the.
43:07
Speaker 4: Time absolutely, So again it's I think it's the return
43:10
Speaker 4: of the analog people more, you know, interested in driving.
43:14
Speaker 4: I mean, I think I think we're all trying to
43:17
Speaker 4: absorb what COVID did.
43:18
Speaker 3: COVID was a boom.
43:20
Speaker 4: I'm sure time for these kind of cars, but you know,
43:23
Speaker 4: even afterwards, I think, you know, people were embracing slower hobbies,
43:28
Speaker 4: slower things, you know, playing music, camping, hiking, you know,
43:32
Speaker 4: outdoor pursuits, and you know in some of these things
43:36
Speaker 4: kind of cars sort of fit into that a little bit,
43:39
Speaker 4: which is, you know, something to just go out and
43:42
Speaker 4: take a long, slow Sunday afternoon drive is not something
43:45
Speaker 4: that you know, the rush rush world of what mileage
43:48
Speaker 4: does it get? And you know, what's the least payment
43:51
Speaker 4: on it? You know, it's it's just a it comes
43:53
Speaker 4: from a different place and there's a bigger audience than
43:56
Speaker 4: people think who are willing to spend real money on it.
43:59
Speaker 2: So there's a data point you guys have reference. I
44:02
Speaker 2: want to ask you about.
44:04
Speaker 1: Quote.
44:04
Speaker 2: We estimate that approximately twelve million enthusiast vehicles will transfer
44:10
Speaker 2: to a new generation in the United States over the
44:13
Speaker 2: next fifteen years, either via estate plans or inheritances. What
44:19
Speaker 2: is this generational handoff from I guess we could call
44:23
Speaker 2: them boomer collectors to millennials and gen z. What does
44:27
Speaker 2: this mean for the car collecting community.
44:31
Speaker 4: Well, and I think we've all read that there's this huge,
44:34
Speaker 4: you know, gigantic wealth transfer. Whatever the headline number is.
44:37
Speaker 4: I've heard five trillion, I've heard one hundred trillion, you know,
44:40
Speaker 4: seventy and you know, ar estimate just on that number
44:45
Speaker 4: of you know, thirteen you know million vehicles, twelve thirteen
44:49
Speaker 4: million vehicles, it's about five hundred and seventy billion dollars
44:51
Speaker 4: worth of car value. Right now, most of those are
44:54
Speaker 4: held in, you know, the hands of the generation of
44:57
Speaker 4: baby boomers.
44:58
Speaker 3: I'm an I'm an older gen.
45:01
Speaker 4: You know, Gen xers are starting to come into the
45:03
Speaker 4: peak wealth, past peak earnings, in the peak wealth years,
45:07
Speaker 4: buying a lot of cars. But fifteen years from now,
45:10
Speaker 4: about a third of that whole market will will come
45:12
Speaker 4: loose back. And we're again, we're seeing this. Certainly, the
45:17
Speaker 4: entry points are different than they were a generation ago,
45:20
Speaker 4: where people are interested in sporty cars, trucks, younger kind
45:24
Speaker 4: of you know, young timer cars as they refer to
45:27
Speaker 4: them in Europe, and you know, we are, we're seeing
45:31
Speaker 4: the data. We want to position ourselves well to see
45:34
Speaker 4: that the transfers are kind of smooth, you know where
45:37
Speaker 4: you're you know, you're kind of helping the next generation
45:39
Speaker 4: get into these cars. We're actually doing things like teaching
45:42
Speaker 4: manual driving classes because you know, if you talk about it,
45:46
Speaker 4: it's not just an anti theft device or some slow
45:49
Speaker 4: hobby like brewing beer or whatever.
45:51
Speaker 3: It is.
45:52
Speaker 4: It's we need to teach the next generation how to
45:54
Speaker 4: drive manuals. And it's it's you know, it's not that
45:57
Speaker 4: hard to do.
45:58
Speaker 2: Not only is it not that hard it's just so
46:00
Speaker 2: much more engaging. And not to be a stick snob,
46:06
Speaker 2: but it really is a very different experience.
46:10
Speaker 3: And yeah, I know the GT.
46:11
Speaker 2: Three in the PDK is faster than the stick, but
46:16
Speaker 2: how often am I taking my car on the track.
46:19
Speaker 2: If that's once or twice a year, it's a lot.
46:22
Speaker 2: What about the other three hundred and sixty days a year.
46:25
Speaker 4: Well, even if you did, you and I neither of
46:27
Speaker 4: us are good enough drivers to really make a difference.
46:32
Speaker 2: Okay, one second different, whatever it is, it's it's it's
46:37
Speaker 2: funny because I've done all the high performance driving classes
46:41
Speaker 2: and the reality is, if you're in a raush Mustang
46:44
Speaker 2: up at Lime Rock, they said put into third, leave
46:48
Speaker 2: it there for the whole track. So really driving the
46:50
Speaker 2: stick isn't that much different. But if you're really doing
46:55
Speaker 2: the competitive course, of course not. First of all, you
46:59
Speaker 2: don't the car doesn't stop, the dual clutch is so fast,
47:04
Speaker 2: the engine is always engaged, so you're not losing that
47:09
Speaker 2: tenth of a second when the clutch is down and
47:13
Speaker 2: you're losing power. But it still just feels so much
47:16
Speaker 2: more engaging. Related question to the analog and the manual,
47:22
Speaker 2: So you do a twenty twenty five Bull Market List.
47:24
Speaker 2: You do one every year. The average model year of
47:28
Speaker 2: featured cars used to be in the late eighties, early nineties.
47:33
Speaker 2: All of a sudden, it's two thousand and one. How
47:35
Speaker 2: did that happen? What's driving that shift in Bullmarket attractive?
47:42
Speaker 1: Is it that pre.
47:46
Speaker 2: Screen, analogue manual feel but not quite as old as
47:51
Speaker 2: the seventies eighties cars.
47:52
Speaker 4: I think so, and I think it's but it's also
47:55
Speaker 4: it's a combination of what's driving demand. One is there's
47:58
Speaker 4: absolutely a new cohort of people getting in making a
48:00
Speaker 4: little bit of money buying these things at the top
48:03
Speaker 4: end of the market. Though it's not just oh, the
48:06
Speaker 4: new young tech guy who has who's going to be
48:10
Speaker 4: in the open ai IPO and is going to make
48:13
Speaker 4: money and go buy a car. Older generation collectors are
48:16
Speaker 4: also buying a lot of these new cars at auction.
48:19
Speaker 3: And it's interesting. I've seen this twice in my career.
48:22
Speaker 4: In the big muscle car era, which was two thousand
48:26
Speaker 4: and five sixty seven, right before the Great Financial Crisis,
48:29
Speaker 4: everybody said, oh, it's a new generation of people buying
48:31
Speaker 4: all these muscle cars and paying American muscle cars and
48:33
Speaker 4: paying a lot of money for it, and that was true,
48:36
Speaker 4: there were, but it was also the older generation of
48:38
Speaker 4: collectors who liked earlier cars saying like, well, maybe those
48:42
Speaker 4: are cool and I want one too, and by the way,
48:43
Speaker 4: I have more money than you, so I'm going to
48:45
Speaker 4: outbid you at auction and it's mine. Same thing right
48:50
Speaker 4: now in this sort of like say supercar segment, where
48:52
Speaker 4: a lot of these cars from the nineties and two
48:55
Speaker 4: thousands are we see these values going up.
48:57
Speaker 3: It is the new kind.
48:59
Speaker 4: Of newer money, newer collector, but it's an older generation
49:02
Speaker 4: of collectors saying well, I don't want to be left
49:04
Speaker 4: without a cool car. Or In fact, one guy told
49:07
Speaker 4: me recently who bought a Bugatti Veyron and a couple
49:09
Speaker 4: of newer cars, said well, I want to have a
49:11
Speaker 4: car that my grandkids thinks is cool. And so I'm like,
49:15
Speaker 4: got it, And that's not the Bugatti Veyron he loves,
49:19
Speaker 4: he said, And I'm taking my kid my grandkids and
49:21
Speaker 4: drives in the Bugatti Veyron, and so you know they
49:25
Speaker 4: think it's cool.
49:25
Speaker 1: Yeah, I can, I can imagine.
49:27
Speaker 2: All right, last question before I get to my favorites,
49:29
Speaker 2: because I know, ye we're watching the time, so you
49:33
Speaker 2: guys crunch so much number, so many data is what
49:36
Speaker 2: do you think the casual observer of collector cars misses
49:41
Speaker 2: that your data is revealing.
49:44
Speaker 4: Yeah, well, I think those big headline cars are they
49:49
Speaker 4: attract so much attention and people just think it's this,
49:52
Speaker 4: you know, crazy, very high end market, very very rarefied cars.
49:56
Speaker 4: And while that is true, those are the headline grabbing numbers,
50:00
Speaker 4: you know, the big story is that there's just a
50:03
Speaker 4: much much wider opportunity for people who want to play
50:07
Speaker 4: in this space. Every single price point, every little bit
50:11
Speaker 4: of reliability and everything from pickup trucks. Like I said,
50:14
Speaker 4: if you live in that part of the world and
50:16
Speaker 4: that's something that's interesting to you, it's a very broad
50:20
Speaker 4: based hobby.
50:21
Speaker 3: It's also you know this is.
50:23
Speaker 4: This was a hobby that for many many years was
50:25
Speaker 4: very much male oriented, mail driven, and I can see
50:28
Speaker 4: that in the data of who our insurance are and
50:30
Speaker 4: everything else. There's a really rising cohort of young women
50:34
Speaker 4: and you know, women who want to have these cars
50:36
Speaker 4: and have it be part of their lives too. I
50:38
Speaker 4: think that's probably one of the most exciting trends that
50:41
Speaker 4: so very broad based.
50:43
Speaker 2: I've noticed a lot more women YouTubers talking about cars.
50:47
Speaker 4: And coming to cars and coffee with their cars and
50:50
Speaker 4: and that sort of thing. So it's there's just there's
50:52
Speaker 4: a lot more to it. It's much broader based. And
50:55
Speaker 4: sure it's fun to see a multimillion dollar whatever sell someplace,
50:58
Speaker 4: but that's just not that's not the average reality. The
51:01
Speaker 4: average is actually much broader based and much more interesting.
51:04
Speaker 2: So I want to get to our favorite questions, but
51:07
Speaker 2: I got to throw some other stuff.
51:10
Speaker 1: Let's just do a quick speed round.
51:12
Speaker 2: Someone comes up to you and says, hey, I'm interested
51:15
Speaker 2: in a fun weekend car. I don't have a lot
51:17
Speaker 2: of money, but i'd like a convertible stick shift.
51:20
Speaker 3: What do you use? Mustang?
51:21
Speaker 1: Mustang?
51:22
Speaker 3: Of course?
51:22
Speaker 2: Yeah, other than you say of course, because I would
51:24
Speaker 2: have said Miyada.
51:25
Speaker 4: Oh yeah, well Mustang or Miyada. I mean so, And
51:29
Speaker 4: I always tell people like the oldest Miyada is now
51:32
Speaker 4: thirty three years old.
51:33
Speaker 3: Something like that.
51:34
Speaker 4: Milled they made and they made over a million of
51:37
Speaker 4: them for the US market.
51:38
Speaker 3: Super reliable.
51:40
Speaker 4: If you want to go track driving, they're the great
51:41
Speaker 4: track cars. If you want to just cruise around a weekend,
51:44
Speaker 4: they're inexpensive. Ten to fifteen thousand dollars. But same thing
51:47
Speaker 4: with Mustang, you know, so just they're.
51:50
Speaker 1: A little more horsepower in the Mustang, a.
51:51
Speaker 3: Little bit more horsepower.
51:52
Speaker 4: They made a lot of they made a lot of convertibles,
51:54
Speaker 4: their manuals, they're automatics if you don't feel comfortable with that,
51:58
Speaker 4: and very very affordable car and easy to get serviced,
52:02
Speaker 4: so that those would be my two recommendations.
52:04
Speaker 3: Of course.
52:04
Speaker 4: The most collected car, though still in the United States,
52:07
Speaker 4: is a Corvette, and you know, they've been making them forever.
52:11
Speaker 4: There are lots of them, easy to service, and.
52:13
Speaker 2: Not that especially like a C six or C seven,
52:16
Speaker 2: not that expensive for a semi modern car.
52:20
Speaker 3: They're amazing. They're amazing cars.
52:22
Speaker 2: Someone says, I'm interested in something European, a little more interesting, sporty.
52:28
Speaker 1: Way do you send them?
52:29
Speaker 4: Well, I'm a poors person, so I would say, great,
52:31
Speaker 4: you want a nine to eleven, But let's start you
52:33
Speaker 4: in a box star, you know, let's start you in
52:36
Speaker 4: you know whatever, some more entry point point there. That
52:42
Speaker 4: younger generation that I talked about, the sort of three
52:44
Speaker 4: series BMW's super fun cars, lots of them built with
52:48
Speaker 4: a lot of quality to kind of have style they
52:51
Speaker 4: look good.
52:52
Speaker 3: That's where people go.
52:54
Speaker 1: Yeah, those of aged beautifully.
52:55
Speaker 2: Yes, the design of the early BMW's someone who's a
53:00
Speaker 2: little more has a little more scratch, a little older,
53:02
Speaker 2: says hey, I'm looking for something fun, but it's going
53:06
Speaker 2: to retain its value. When I'm willing to spend more
53:10
Speaker 2: than my kid buying a boxter.
53:12
Speaker 4: Well then it's still probably I mean, again my my
53:15
Speaker 4: bias here, I'd still probably say nine to eleven. But
53:18
Speaker 4: you're going to pick a year that was maybe slightly
53:21
Speaker 4: slightly off year, they're going to hold their value. Well,
53:23
Speaker 4: I've actually I did a kind of market cap comparison
53:26
Speaker 4: between every nine to eleven every built ever built versus
53:30
Speaker 4: every Ferrari ever built. Because people talk about Ferrari GTOs
53:33
Speaker 4: and all this sort of thing, which are worth tens
53:35
Speaker 4: of millions from I'm.
53:36
Speaker 2: Seventy five, and they're just spent. They were spectacular and
53:40
Speaker 2: they are I love them.
53:41
Speaker 4: But when you look at all the nine elevens that
53:43
Speaker 4: were built that were really undervalued for a long time,
53:46
Speaker 4: you know you could buy I mean people used to
53:48
Speaker 4: give me a hard time because my sixty seven nine
53:51
Speaker 4: to eleven s when I spent over one hundred thousand
53:54
Speaker 4: dollars having a professionally restored not that many years ago. Oh,
53:58
Speaker 4: I mean after my you know, my very amateurish high
54:00
Speaker 4: school restoration. I spent one hundred thousand or whatever, a
54:03
Speaker 4: little bit more than that, and it was worth about
54:05
Speaker 4: seventy right, Well now it's worth about three hundred, no kids,
54:09
Speaker 4: you know, two fifty three hundred for a sixty seven
54:11
Speaker 4: s And people say, like, what's the car? What's your
54:14
Speaker 4: nine to eleven worth? I'm like, I don't care. It's
54:16
Speaker 4: my baby, and like, no one will ever. I and
54:20
Speaker 4: my family will have that car forever.
54:22
Speaker 2: I have a bias against garage queens, but I'm curious
54:26
Speaker 2: as to your thoughts. People who buy cars put them
54:29
Speaker 2: in a garage never drive.
54:30
Speaker 3: I think those are really sad cars, right.
54:32
Speaker 1: They got to be great for business because to zero risk.
54:35
Speaker 4: The claims are low, but if they're sad cars, and
54:37
Speaker 4: especially by the way, no almost there's not a single
54:41
Speaker 4: generation of cars that fares well when it sits around
54:44
Speaker 4: for a long period of time. Tires age, belts and
54:47
Speaker 4: hoses age, and some of those nineties and two thousands
54:50
Speaker 4: cars they age particularly badly when they sit in the
54:53
Speaker 4: garage lots. Of maintenance required. So my view is if
54:56
Speaker 4: you got a car unless it's like six miles on
54:59
Speaker 4: it or fifty miles and you just think that's what
55:01
Speaker 4: makes it cool. When there were a lot of customers
55:03
Speaker 4: that we have that like that, my view is, go
55:05
Speaker 4: drive it. We sold at our Amelia sale one of
55:10
Speaker 4: the two record setting for ferrari Enzos. We sold it
55:12
Speaker 4: for fifteen million dollars. The car had I think two
55:14
Speaker 4: hundred and forty nine miles on it ferrari Enzo, and
55:18
Speaker 4: everybody's like, what do you think of that? I'm like,
55:20
Speaker 4: I would rather have the twenty thousand mile ferrari Enzo
55:23
Speaker 4: that I could go drive. I mean that just personally
55:25
Speaker 4: myself and I congratulated the buyer. Wonderful buy sir, but
55:30
Speaker 4: I would like to please drive it, Please drive it.
55:32
Speaker 2: Doug DeMuro said something really interesting about his career GT
55:35
Speaker 2: when he was hunting for one, he found one with
55:38
Speaker 2: higher mileage because he said, I won't go through the
55:42
Speaker 2: process of I'm not going to drive this because.
55:44
Speaker 1: I'm appreciating it.
55:45
Speaker 2: It's starting out higher mileage, so you're more inclined, you're
55:49
Speaker 2: more inclined to put miles on it.
55:50
Speaker 4: I have one vintage car that has super low miles
55:53
Speaker 4: on it. It's a Jaguar E Type nineteen sixty six.
55:55
Speaker 4: It had thirteen thousand miles on it when I bought it,
55:57
Speaker 4: and it has about fifteen thousand miles on it now.
56:00
Speaker 4: And it's just it bugs me because I feel like
56:03
Speaker 4: it should be driven, and then I worry that I'm
56:05
Speaker 4: just putting a bunch of miles on it, and so
56:07
Speaker 4: I don't know.
56:08
Speaker 3: I have the same quandary. So I just like the
56:10
Speaker 3: drive cars.
56:11
Speaker 2: So we're recording this right after Ferrari dropped their new
56:16
Speaker 2: loose electric appliance.
56:19
Speaker 3: I don't even want to chuck it.
56:20
Speaker 2: Yeah, yeah, it's my Ferrari buddies are not big fans
56:26
Speaker 2: of all the new versions that have been coming out.
56:33
Speaker 2: I still think the four fifty eight is really handsome.
56:36
Speaker 2: I love the eight twelve GTS. If I ever get
56:39
Speaker 2: that garage built those, one of those has my name
56:44
Speaker 2: on it. But the question for you is, when you
56:47
Speaker 2: see these new cars coming out and they're so technology
56:51
Speaker 2: heavy and so screen focused, how do you think these
56:57
Speaker 2: will fare as collectibles twenty four sixty years from now?
57:01
Speaker 4: Well, I can tell you I will never bet against Ferrari,
57:04
Speaker 4: not ever once, because I mean it is just forever
57:08
Speaker 4: since the day the first one was built, until you know,
57:10
Speaker 4: it's just there's been something magical about that brand.
57:14
Speaker 3: I love the.
57:14
Speaker 4: History of how the fact that like the second Enzo
57:17
Speaker 4: Ferrari back in the day would show up with one,
57:19
Speaker 4: like everybody knew, well, that's the car to beat, period
57:22
Speaker 4: and even though sometimes you beat them, sometimes you didn't,
57:25
Speaker 4: they were just the car to beat. And I also
57:27
Speaker 4: remind people that cars, like companies like Ferrari, they've always
57:31
Speaker 4: had different lines of cars. You know, Ferrari always at
57:34
Speaker 4: race cars, but they also always had their like businessman's car,
57:37
Speaker 4: you know, a front engine, slightly less preform exactly exactly well.
57:44
Speaker 4: And the suv the pro songway like people said they'll
57:47
Speaker 4: never build an suv, and I remember I was talking
57:49
Speaker 4: to Bob Lutz and he just said watch he said,
57:53
Speaker 4: And I'm like, why do you think they will build
57:55
Speaker 4: an suv?
57:56
Speaker 2: Bob?
57:56
Speaker 3: And he said, because they have to.
57:58
Speaker 2: I was gonna say, s the Ki and the Macans
58:01
Speaker 2: save Porsche, all right. Ferrari had to be watching that.
58:06
Speaker 2: They had to be seeing the Uras sales, which is
58:09
Speaker 2: essentially a rebadged eight truck from Audi with a whole
58:14
Speaker 2: lot more horsepower.
58:17
Speaker 1: I mean, how did they not do that?
58:18
Speaker 3: They had to?
58:18
Speaker 4: And I think I got it like this particular electric
58:21
Speaker 4: car is not necessarily had the most favorable initial reviews.
58:25
Speaker 4: But my view is I will never count for ARI
58:27
Speaker 4: out and I think they probably are seeing some things
58:29
Speaker 4: in their data and with some certain customers who want this,
58:32
Speaker 4: and we'll.
58:34
Speaker 3: See, We'll certainly see.
58:35
Speaker 2: So let me jump to my favorite questions.
58:39
Speaker 1: I don't make you late for your trip back to
58:43
Speaker 1: the Midwest. Who are your early mentors who helped shape
58:47
Speaker 1: your career.
58:48
Speaker 4: My mentors went from kind of macro mentors to micro mentors,
58:53
Speaker 4: and so you know, in early days, of course, it
58:55
Speaker 4: was my parents. My parents had very different skill sets
58:58
Speaker 4: and I was so blessed that I got to work
58:59
Speaker 4: with both of them. There were some teachers kind of
59:02
Speaker 4: early on who were really extraordinary professors that both kind
59:08
Speaker 4: of I think triggered my love of learning. One gentleman,
59:12
Speaker 4: his name was Gary Hart, still living. I kind of
59:15
Speaker 4: look after him in his old age. He just fundamentally
59:18
Speaker 4: taught me how to be a good student. But what
59:21
Speaker 4: I found, though, is my mentors have become more micro
59:23
Speaker 4: mentors now like less than it's my whole life learning
59:26
Speaker 4: everything about something from this person is Now I find
59:30
Speaker 4: somebody who's really good at one thing, and I learned
59:32
Speaker 4: from them.
59:32
Speaker 3: I become friends with them.
59:34
Speaker 4: My current lead director on our public company board, Bill Swanson,
59:38
Speaker 4: he was the chairman and CEO of Atheon and wonderful
59:41
Speaker 4: man car collector and just brilliant at board governance and
59:45
Speaker 4: how to think things through. And I'm just learning so
59:47
Speaker 4: much listening to him. And so he's a real mentor
59:50
Speaker 4: of mine. And so I think I'm very much of
59:52
Speaker 4: that tribe of mentor approach. And I've had many and
59:56
Speaker 4: I love mentoring myself.
59:57
Speaker 2: So hum really really interesting. What are some of your
1:00:01
Speaker 2: favorite books? What are you reading right now?
1:00:02
Speaker 3: So I'm an avid reader.
1:00:04
Speaker 4: I read thirty to fifty books a year typically, and
1:00:08
Speaker 4: a lot of biographies. In the last four or five years,
1:00:10
Speaker 4: I was definitely on a music biography stint, so a
1:00:15
Speaker 4: lot of rock and roll biographies, and then I went
1:00:17
Speaker 4: through give us a few names, oh, everything from the
1:00:20
Speaker 4: Keith Richards to Slash to you name it.
1:00:23
Speaker 3: I mean a lot.
1:00:24
Speaker 4: I've read a lot of biographies of you know, Springsteen, anybody.
1:00:29
Speaker 4: Then I did an interesting kind of parallel set, which
1:00:33
Speaker 4: was music producers, and that was fun. So everything from
1:00:37
Speaker 4: the there's a famous book on Warner Brothers music that
1:00:40
Speaker 4: was about called Sonic Boom, which was all of the
1:00:42
Speaker 4: music producers that did that, to Clive Davis, to those
1:00:46
Speaker 4: types of folks. For this year, though, my reading theme
1:00:50
Speaker 4: is all about the founding of America. So I'm reading
1:00:52
Speaker 4: a lot of kind of American founding stuff. I've just
1:00:55
Speaker 4: figured it's a good time to do that. So biographies
1:00:58
Speaker 4: so far this year on George Washington, Benjamin Franklin, there
1:01:02
Speaker 4: are a bunch of other books around kind of a
1:01:04
Speaker 4: lot of the founding fathers. I'm also wading through Wealth
1:01:08
Speaker 4: of Nations again, first time since college because it was
1:01:11
Speaker 4: also published in seventeen seventy six.
1:01:13
Speaker 3: I had for yeah, that's a beast. That's a beast.
1:01:18
Speaker 4: But I would say one final piece is I was
1:01:20
Speaker 4: a sci fi fan forever, really, and I decided for
1:01:25
Speaker 4: the last two years I started rereading a bunch of
1:01:28
Speaker 4: the great series that I read long time ago. So
1:01:31
Speaker 4: I just read the entire Dune series for the third
1:01:34
Speaker 4: time in my life, and that was fun. The foundation series,
1:01:37
Speaker 4: Osamov Clark I think what I had forgotten is that
1:01:43
Speaker 4: almost all of those sci fi authors knew each other. Yes,
1:01:46
Speaker 4: they all kind of subscribed to some of the same magazines,
1:01:48
Speaker 4: and they get together for these little get togethers, and
1:01:50
Speaker 4: they were all kind of envisioning a future together and
1:01:54
Speaker 4: a lot of same themes, and especially right now around
1:01:57
Speaker 4: the challenges with AI are all embedded behind the Foundation
1:02:02
Speaker 4: series and even in Dune that people if you kind
1:02:05
Speaker 4: of have to read into it, but it's fascinating stuff.
1:02:08
Speaker 1: Larry Knivin, Philip K.
1:02:10
Speaker 4: Dick those Yes, and you know, of course, you know
1:02:14
Speaker 4: Hitchhiker's Guid the Galaxy.
1:02:15
Speaker 3: Well for a little bit of humor classic.
1:02:18
Speaker 1: Yes, what are you streaming these days?
1:02:19
Speaker 2: Give us your favorite either YouTube or Netflix or even podcasts.
1:02:24
Speaker 3: What's keeping you? Yes?
1:02:25
Speaker 4: So, I mean my my workout companion is a lot
1:02:28
Speaker 4: of podcasts. So, and and they've kind of shifted, I
1:02:31
Speaker 4: guess a little bit. So while I was, you know,
1:02:34
Speaker 4: during COVID, it was a lot of just sort of
1:02:36
Speaker 4: habits and mindset stuff and this sort of thing. And
1:02:38
Speaker 4: then when I discovered people like Scott Galloway his very
1:02:41
Speaker 4: humorous way to think about business, Tyler Cowen, I think
1:02:44
Speaker 4: is just absolutely brilliant, so great podcasts there. I've also
1:02:49
Speaker 4: been impressed with that Audible has a number of their
1:02:54
Speaker 4: own kind of i'vegatten back to the musical biography things.
1:02:57
Speaker 4: They have a lot of these short format kind of
1:02:59
Speaker 4: pie cast kind of other kind of QUASEI musical performances
1:03:04
Speaker 4: that are both kind of spoken word and music. And
1:03:08
Speaker 4: it's actually called the Words and Music Series, and that's
1:03:11
Speaker 4: been really fun to listen to some of.
1:03:13
Speaker 2: Those words and music. I'm gonna have to check that out,
1:03:15
Speaker 2: all right. Our final two questions, what sort of advice
1:03:18
Speaker 2: would you give a recent college grad interested in a
1:03:22
Speaker 2: career in either automobiles or insurance or business.
1:03:27
Speaker 4: I think I've just been I've been to two different
1:03:30
Speaker 4: commencement ceremonies. One was my daughters and another was some friends,
1:03:35
Speaker 4: and all of the commencement speakers right now are so
1:03:38
Speaker 4: focused on AI and trying to tell them it's going.
1:03:41
Speaker 3: To be okay.
1:03:42
Speaker 4: And not only do I think it's going to be okay,
1:03:44
Speaker 4: as I was reminded them and people of my own career,
1:03:48
Speaker 4: which is I work. My core business is what some
1:03:50
Speaker 4: people would call as a relatively boring industry insurance. Now
1:03:55
Speaker 4: you got to go into cool other stuff, not go
1:03:57
Speaker 4: into some of those things. I think there are there's
1:04:00
Speaker 4: so many opportunities in these industries that are established, they
1:04:03
Speaker 4: are stable. They need really smart people who want to
1:04:05
Speaker 4: work hard and remake what they are is. Don't overlook
1:04:09
Speaker 4: things that you consider boring today, you know, look at
1:04:12
Speaker 4: some of those and think, who are the types of
1:04:14
Speaker 4: people that are going into these that you can make
1:04:15
Speaker 4: a great career. I never imagined I'd be doing what
1:04:19
Speaker 4: I am today, and I think I have the coolest
1:04:22
Speaker 4: job you can have.
1:04:23
Speaker 1: Really really interesting.
1:04:25
Speaker 2: And our final question, what do you know about the
1:04:28
Speaker 2: world of automobiles or insurance today might have been useful
1:04:33
Speaker 2: thirty forty years ago when you are first ramping up.
1:04:36
Speaker 4: I think, you know, the the world has been predicting
1:04:41
Speaker 4: the demise of certain parts of the automobile industry for years,
1:04:45
Speaker 4: you know, and we saw it very recently with you know,
1:04:48
Speaker 4: this almost like Holy War. People view the difference between
1:04:52
Speaker 4: evs and internal combustion cars, and I'm very agnostic about
1:04:56
Speaker 4: all of that stuff, and it's very easy to kind
1:04:58
Speaker 4: of get sucked into those arguments.
1:05:00
Speaker 3: It's like, well, what do you think of EVS? I'm like,
1:05:01
Speaker 3: I don't know.
1:05:02
Speaker 4: There were EV's back in nineteen oh eight, there were
1:05:05
Speaker 4: steam cars in nineteen ten, and now you know, we've
1:05:08
Speaker 4: been on internal combustion for a long time. I think
1:05:10
Speaker 4: there will be more electric cars in the future, but
1:05:13
Speaker 4: I also think they're going to be great internal combustion cars.
1:05:16
Speaker 4: So I think I would just continue playing the big
1:05:19
Speaker 4: long game and don't worry about some of the little
1:05:22
Speaker 4: petty arguments that people can have that you know, it
1:05:25
Speaker 4: makes for good maybe cocktail party talk, but I'd like
1:05:28
Speaker 4: to see the big picture.
1:05:29
Speaker 1: Mkhil, thank you for being so generous with your time.
1:05:32
Speaker 2: We have been speaking with Mkhil Haggerty, Chairman and CEO
1:05:37
Speaker 2: of Haggarty Specialty Insurance. If you enjoy this conversation, well
1:05:42
Speaker 2: be sure and check out any of the six hundred
1:05:44
Speaker 2: and forty eight we've done previously.
1:05:46
Speaker 1: You can find.
1:05:47
Speaker 2: Those at YouTube, Apple, Spotify, Bloomberg, wherever you get your
1:05:53
Speaker 2: favorite podcasts. I would be remiss if I didn't thank
1:05:56
Speaker 2: the crack team that helps us put these conversations together
1:06:00
Speaker 2: each week. Alexis Noriega is my video producer. Sean Russo
1:06:05
Speaker 2: is my researcher. Anna Luca is my podcast producer. I'm
1:06:10
Speaker 2: Barry Retoults. You've been listening to Masters in Business on
1:06:15
Speaker 2: Bloomberg Radio