Analysts struck a cautiously positive tone on Admiral Group Plc (LSE:ADM) following its full-year results, with UBS saying it expected a modestly positive market reaction as a new internal model could trigger a share buyback.
This was driven by three factors: management's guidance that 2026 group profit would be broadly flat year-on-year, an acceleration in non-motor earnings, and the potential for a one-off capital distribution linked to the insurer's pending internal model approval with regulators.
The internal model point drew particular attention for UBS analyst Will Hardcastle.
This would see the solvency ratio run at the upper end of a 150-170% range and could trigger a one-off distribution worth around 1.5-2.5% of market capitalisation, likely in the form of a buyback rather than a special dividend given Admiral's signalled shift in capital return policy.
The main area of concern was UK motor written premiums, which came in 7% below UBS estimates, reflecting a mix shift toward higher retention and lower new business.
Hardcastle said this would likely prompt consensus to trim 2026 revenue forecasts by a low to mid single-digit percentage.
The offset, the analyst argued, was the non-motor growth story, where Admiral guided that the combined profits of its European operations, UK non-motor and Admiral Money businesses would more than double to above £190 million by 2028, well ahead of current consensus of around £135 million.
This gap, UBS said, represented more than £55 million of potential earnings upgrades.
Admiral shares were up 6.9% at 3,058 in afternoon trading on Thursday.