UBS sees shares rising 14% as UK car insurance market moves above inflation for first time in years
Admiral Group Plc (LSE:ADM) shares rose 3% after UBS upgraded the FTSE 100 insurer to 'buy' and raised its 12-month price target by 8% to £35.50, arguing that an anticipated turn in UK motor insurance pricing has not been reflected in the stock's valuation.
UBS analysts said Admiral had already raised prices by a couple of percentage points in the first two months of 2026, ahead of the broader market, and that data from industry body the ABI and EY forecasts pointing to a sector combined ratio of 111% for 2026 supported the case for a sustained pricing recovery.
The bank also highlighted Admiral's guidance that profits from its non-motor divisions, including home, travel, pet, European operations and its loans business Admiral Money, would more than double between 2025 and 2028 to around £200 million, representing approximately 15% of group earnings.
A further potential catalyst is the pending approval of Admiral's internal solvency model, which UBS estimated could result in a one-off capital distribution worth 1.5% to 3% of the company's market capitalisation.
Admiral is currently trading at 12.5 times 2027 earnings, well below its historical average of 16 times.