Peel Hunt has cut its target price for Admiral and kept its Sell rating, arguing there is still little sign of a turn in the UK motor insurance cycle.
The broker lowered its target from 2,620p to 2,460p in a note published on October 14, implying around 33% downside from Admiral's closing price of 3,670p on October 12. Analyst Andreas Van Embden said Admiral's shares remained expensive at around 20 times underlying 2026 earnings.
Peel Hunt said mixed rate movements across the UK motor market continue to trail claims inflation, and that it does not expect the market to harden over its forecast horizon.
Admiral began raising UK motor rates in the second quarter of 2026, after pricing below claims inflation through 2024 and 2025 to grow market share. That push lifted its UK motor policy count 18% over two years, to 5.8 million. Peel Hunt estimates Admiral is now raising rates by around 8%, only slightly above its own claims inflation expectation of 5% to 7%.
The squeeze is already showing in results. Admiral’s pre-tax profit fell 18% to £429 million in the first half of 2026, driven by an 18% drop in UK motor profit to £457 million. Peel Hunt said that figure was cushioned by larger-than-expected reserve releases.
The broker’s central concern is what happens if competitors don’t follow Admiral’s lead. It noted that UK motor is highly price sensitive, estimating that a 1% rate rise translates into roughly a 6% fall in policy volumes, and that price comparison sites make the market fully transparent.
Peel Hunt now expects Admiral’s UK motor policies to fall to around 5.5 million this year and 4.8 million in 2027. That matters because ancillary income, such as add-ons and fees, is tied to policy numbers. The broker estimates ancillary profits make up around 40% of Admiral’s UK motor operating profit, having grown from £237 million in 2022 to £333 million in 2025.
It also questioned whether Admiral could set the tone for the market as its largest player, pointing to improved pricing agility among rivals.
Peel Hunt said Admiral is relying on reserve releases to smooth results while margins recover. It estimates around £390 million of reserve buffer could be drawn down as Admiral moves from the 94th percentile of its target confidence range towards the middle of its 85% to 95% range.
The broker also flagged Admiral’s reliance on its reinsurance panel, which it estimates funds 45% to 50% of capital requirements. Peel Hunt stressed that a pullback by the panel is not its base case.
The note lands as UK motor pricing shows the first signs of turning. Defaqto data published last week showed competitive quoted premiums ended the third quarter 2.7% higher than a year earlier, the first annual increase since 2023, though quarterly growth slowed to 0.5%.
Admiral is also cutting around 500 UK jobs as part of a £100 million cost savings programme.
Admiral sells mainly direct and through price comparison sites, so the direct broker impact is limited. But the note highlights a market where the largest player is trying to lead prices up without a guarantee that others will follow.
If Peel Hunt is right, the result is more divergence between insurers, with some holding prices down to win customers from those raising them. For brokers shopping personal motor, that spread is an opportunity, as recent price index data shows.
