UBS moved Admiral Group into a buy rating from neutral and raised its 12-month price target to 3,550p from 3,300p, reflecting what the bank describes as an improving pricing environment in UK motor insurance, accelerating earnings from non-motor divisions and the possibility of a capital return tied to internal Solvency II model approval. The stock rose by more than 2% on the news and was trading at 3,120p as of March 9.
The broker increased its earnings-per-share forecast for 2026 by 7% to 238.52p, and nudged 2027 and 2028 EPS estimates up by 3% each, to 250.57p and 297.66p respectively. UBS noted that Admiral is trading at 12.5 times its 2027 estimated earnings, below a five-year historical average of about 16 times.
On pricing, UBS highlighted that Admiral implemented increases of a couple of percentage points in the first two months of 2026. With an annualised claims inflation trend running at approximately 5%, those price moves have lifted the written margin by roughly 1 percentage point year-to-date. UBS cautioned that the broader market is closer to flat pricing year-to-date and that Admiral is not a total price maker in what remains a highly competitive market.
Looking ahead, UBS is modelling pricing at 2.5 percentage points above inflation for the remainder of 2026, reverting to in-line with inflation thereafter. The report underlined the sensitivity of profitability to combined ratio improvement, noting that each one percentage point improvement in the combined ratio is worth more than 4% to forward EPS.
UBS cited EY industry data that forecasts a 2026 earned combined ratio of 111% for the sector. The broker said that historically such elevated combined ratios have been associated with above mid-single-digit pricing corrections.
Outside motor, Admiral reported that aggregate pretax profits from UK Home, Travel and Pet, European operations and Admiral Money totalled 95 million in pretax profit in 2025, ahead of consensus expectations of "
UBS had previously modelled 2028 pretax profits from these divisions at about "
UBS now places these non-motor divisions at about 12% of group valuation and expects their earnings contribution to rise toward 15% by 2028. In its sum-of-the-parts breakdown, UBS assigns 87.9% of value to UK Motor, 6% to UK Home, Travel and Pet, 4.2% to Admiral Money and 1.9% to International Underwriting.
The report flagged that FY25 written premiums in UK Motor were "
UBS said that the FY25 UK Motor written premiums were "
On capital, UBS said the pending Solvency II internal model approval, which is expected by the FY26 results at the latest, could unlock a one-off distribution equal to 1.5% to 3% of market capitalisation. That potential distribution is not included in UBS's forecasts. Under the internal model, the revised solvency target range would be 150% to 170%.
UBS's cash return assumptions see shareholders receiving an all-in yield of 5.7% in 2026, based on an 82% payout ratio. The report also set out an upside share-price scenario of 5,025p and a downside case of 2,600p, a ratio of 3.7 to 1.
UBS's upgrade and adjusted forecasts reflect a mix of pricing dynamics in UK motor, a faster-than-expected maturation of non-motor earnings and potential capital upside from regulatory approval. The brokerage's view positions Admiral as benefiting from both operational margin improvement and balance-sheet optionality, while acknowledging market competition and written-premium headwinds that may temper near-term revenue growth.
Investors tracking Admiral will likely weigh the upgraded EPS trajectory, the valuation discount to historical multiples and the timing and quantum of any capital distribution should the internal model be approved by FY26 results.