Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Admiral delivered where it mattered to cap off a strong year for profit growth, with 2025 pre-tax profit rising to a record £958 million, driven largely by disciplined underwriting and continued strength in UK Motor.
“That said, it’s worth remembering that insurance is a lagging business – much of the profit reported this year reflects favourable pricing conditions written back in 2023 and 2024 now earning through.
“Pricing was soft across 2025, which has already started to put some pressure on margins beneath the surface.
“In short, 2025 looks good in the rear-view mirror, but the tougher pricing environment of last year is still working its way through the numbers.
“Looking ahead, management expects profit to be flatter in 2026 as the less profitable 2025 business earns through, with the wider motor market likely needing price increases to restore profitability.
“The encouraging part is that there are already early signs of pricing firming into 2026, with Admiral implementing low single-digit increases ahead of the market.
“If the pricing cycle is starting to turn, that could lay the foundations for the next leg of earnings growth further out, leaving the shares well placed for investors willing to look through what may prove to be a softer near-term period.”
Contact details are available to account holders.
Create a free account to get in touch with this expert.