Admiral Group PLC (LON:ADM) was downgraded to ‘reduce’ from ‘hold’ by Peel Hunt as analysts expect recession to hit.
The target price was trimmed to 2,120p from 2,230p although the insurer’s motor arm has been “defensive” throughout the pandemic, due to lower miles driven during lockdown and changes in driver behaviour, expected to reduce claims.
READ: Admiral withdraws special dividend after Bank of England urges restraint
“The underlying benefit of positive motor claim trends will be offset by customer relief measures and impairments to both non-performing premiums and loans,” analysts commented.
“A recession is likely to lead to impairments across earned premiums that have been subject to a payment holiday and across Admiral’s unsecured loan book.”
Shares dipped 1% to 2,255.53p at noon.