Admiral Group Shares: Analyst Says Route Back to Growth is Becoming Clearer

Hargreaves Lansdown analyst Matt Britzman said in an article on Friday that the path back to growth for Admiral Group (LON: ADM) is becoming clearer, even as first-half profits fell under the weight of last year’s lower motor prices.

Analyst Matt Britzman said the results showed “the earnings slowdown we expected, but also offered evidence that the worst of the pricing cycle may be passing.”

First-half turnover was broadly flat at £3.1bn, as 11% growth across other UK personal lines offset a 5% decline in UK Motor, while pre-tax profit fell 18% to £429mn. Policy count rose 5% to 12mn.

Britzman noted stable claims inflation and favourable development on older claims helped margins land better than expected.

Admiral “moved ahead of the market with high-single-digit motor price increases in the first half,” he stated, and while insurance earnings respond with a lag, the benefit “should support improvement through the second half and into 2027.”

The analyst added that Admiral’s core advantage remains its underwriting, with years of customer data helping it price risk accurately. He also highlighted growing diversification beyond UK Motor, through household, European insurance and Admiral Money, which “should reduce reliance on a single pricing cycle.”

Britzman flagged capital strength as another attraction, though he cautioned that dividends “will remain variable” given Admiral’s high payout ratio.

“Admiral is a high-quality operator navigating a temporary earnings dip, with the route back to growth becoming clearer,” wrote Britzman. “We remain supportive of the longer-term case, given the potential for robust cash returns. However, with sentiment having improved since the start of the year, we now think the benefits of an earnings recovery are well reflected in the valuation.”