Jefferies Moves Sabre Insurance to Hold After Strong Underwriting Performance

Jefferies has re-rated Sabre Insurance Group, moving the stock from "underperform" to "hold" and increasing its price target to 152 pence from 110 pence after the UK motor insurer reported second-half 2025 results that outperformed analyst expectations.

The brokerage said the stronger-than-expected outcome - a 16% beat on second-half earnings largely attributable to superior underwriting performance - justified a material upward revision to its forecasts. Jefferies raised its earnings per share projections by an average of 15% across the forecast horizon, now forecasting EPS of 15.68 pence for 2026, 17.41 pence for 2027 and 18.79 pence for 2028.

Sabre shares had closed at 145.80 pence prior to the Jefferies note, leaving the new 152 pence target implying roughly 4% upside from that closing level.

Underlying performance and capital actions

Jefferies highlighted that Sabre delivered a full-year 2025 net insurance margin of 19.2%, above Jefferies' prior estimate of 17.9% and sitting comfortably inside the company's stated target range of 18-22%. Gross written premiums returned to growth in the fourth quarter, rising 2.6%, and early 2026 momentum continued with January-February growth exceeding 5%, according to the note.

The analysts, Derald Goh and Philip Kett, pointed to four positive developments supporting the upgrade:

• Margin recovery in the second half of 2025, as management preserved underwriting discipline through a soft market;
• Policy counts and premiums returning to growth in the fourth quarter;
• A turnaround in the bike and taxi segment to a service result of

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    Capital returns and solvency

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    Reported totals and solvency position

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    • Jefferies upgraded Sabre Insurance Group to "hold" from "underperform" and raised its price target to 152 pence from 110 pence.
    • The second-half 2025 earnings exceeded analyst estimates by 16%, driven almost entirely by stronger underwriting results.
    • Jefferies increased EPS estimates by an average of 15% across forecast years, to 15.68 pence for 2026, 17.41 pence for 2027 and 18.79 pence for 2028.
    • Sabre shares closed at 145.80 pence before the Jefferies note, implying roughly 4% upside to the new target.
    • Jefferies reported a full-year 2025 net insurance margin of 19.2%, versus its prior estimate of 17.9% and within Sabre's 18-22% target range.
    • Gross written premiums grew 2.6% in Q4, with January-February 2026 growth exceeding 5%.
    • Jefferies analysts Derald Goh and Philip Kett cited margin strengthening, returning premium growth, a recovery in the bike and taxi segment, and a surprise share buyback as positives supporting the upgrade.
    • Full-year 2025 profit before tax was (legible elsewhere as ). Jefferies noted a post-dividend and buyback solvency ratio of 154% within the company's 140-160% target range.
    • Jefferies highlighted a final dividend per share of 10.1 pence, producing a full-year payout ratio of 88%, and projected a prospective dividend yield of around 10% going forward.
    • Key concerns included a 2.7 percentage point year-on-year rise in the cost ratio, an increased solvency capital requirement versus the prior year despite lower volumes, and slower-than-expected implementation of Sabre's new pricing model, with limited financial contribution forecast for 2026.
    • Management has a 2030 profit-before-tax target of (legible elsewhere as ). Jefferies' 2030 estimate is based on 10% annual premium growth at a 20% margin, which the analysts view as optimistic.
    • Jefferies set its cost of equity at 11.5%, above Sabre's post-IPO average of 8.4%, to account for execution risk. Valuation used an average of 1.4 times price-to-book and 8.7 times price-to-earnings to reach an equal-weighted target of 152 pence. Upside and downside scenarios were modelled at 205 pence and 126 pence respectively.

    Analyst view and recommendation rationale

    Jefferies upgraded to "hold" rather than "buy" because, despite clear earnings momentum and enhanced capital returns, several execution and capital-management risks persist. The broker's forecasts and valuation incorporate an elevated cost of equity to reflect those uncertainties.

    This assessment leaves investors with a moderate upside case but a set of identifiable execution and capital concerns that temper a more bullish stance.