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Highlights

  • Sabre Insurance receives a 'BUY' rating with a price target implying a 20.75% upside.

  • Gross written premium for Jan–Apr 2025 rose over 8% versus the five-year average.

  • Sabre’s capital position remains positive, with solvency well above prior levels post-dividend.

Sabre Insurance Group plc (LSE: SBRE), a specialist motor insurance underwriter in the UK, has received a reaffirmed 'BUY' recommendation from analyst Carl Lofthagen at Berenberg. With a target price of 181.13 GBp—equivalent to AUD 3.75 based on exchange rates—this rating reflects a 20.75% upside from the current share price of 150.0 GBp.

The analyst rating likely to comes amid operational update reported for the first four months of 2025, where the company reported gross written premium (GWP) of £66.1 million. This figure exceeds the five-year average for the same period by more than 8%, driven primarily by a 7% increase in core motor vehicle premiums.

Despite industry headwinds, Sabre maintains a long-standing strategy of prioritising profitability over premium volume. This approach, reinforced in the company’s recent trading update, ensures the sustainability of its margins and capital base. Sabre’s post-dividend solvency capital ratio remains well above its December 2024 figure of 171.1%, supported by year-to-date profitability.

Strategic Expansion and Resilient Performance

Sabre’s continued push into the motorcycle insurance segment through the launch of its Sabre Direct Motorcycle product marks a strategic expansion into a high-potential niche. The company has also reported steady progress toward upgrading its pricing infrastructure, with testing scheduled for the second half of 2025. This enhancement is expected to improve pricing accuracy and competitiveness in a fluctuating market.

The broader UK motor insurance sector is beginning to stabilise after facing substantial pricing volatility. Sabre has observed that price decreases are now flattening, and the company anticipates industry-wide premium increases later this year, which should support its revenue trajectory. Claims inflation is projected to remain in the high single digits throughout 2025, in line with previous guidance.

Despite weak market conditions in early 2025, Sabre remains committed to delivering significant full-year profits and dividends. The group has reiterated its full-year guidance, including an undiscounted net insurance margin within its target range of 18% to 22%, and maintains its longer-term goal of generating at least £80 million in profit before tax by 2030.