Shares in Admiral Group Plc (LSE:ADM) fell 2% to 3,012p on Wednesday after Goldman Sachs downgraded the motor insurer to 'sell', arguing that a long-awaited recovery in UK pricing has failed to take hold and that profit headwinds are building into 2026.
The bank cut its 12-month price target on Admiral to 2,920p from 3,954p and lowered earnings forecasts by around 16–17% for next year.
Goldman said motor insurance prices have continued to soften while claims inflation remains in the mid-single digits, squeezing margins just as insurers lap a period of improving claims frequency. That, it warned, leaves costs more likely to rise than fall.
Admiral had been upgraded last summer on expectations of firmer pricing, but Goldman said that thesis has not played out.
It also highlighted additional risks, including higher commodity prices feeding through to repair costs, potential supply chain disruption, and longer-term structural shifts in motor insurance profitability.
The downgrade came as part of a broader reshuffle of Goldman’s UK insurance views.
Towards the bottom of the note, the bank upgraded Phoenix Group to 'neutral'.