On Thursday, Deutsche Bank (ETR:DBKGn) revised the price target for Sabre (NASDAQ:SABR) Insurance Group (SBRE:LN), reducing it to £2.05 from £2.09, while continuing to recommend a Buy rating for the stock. The adjustment follows observations from the bank's motor pricing tracker, which indicated a slight decline in market pricing during the third quarter of 2024, with a quarter-over-quarter decrease of 1.6%. This trend is consistent with what was observed in the first half of the year.
The bank's analyst noted that the tracker primarily records new business quotes, and it would be unexpected for renewal prices to differ significantly. Despite Sabre Insurance's interim statement in August predicting a rise in market pricing in the second half of 2024, due to insurers adjusting to persistent claims inflation, such a shift has not materialized.
In light of these observations, Deutsche Bank has adopted a more conservative stance regarding the market conditions for the latter half of 2024. Consequently, the bank has revised its profit before tax (PBT) forecasts for Sabre Insurance down by 6% for the fiscal year 2024 and 5% for the fiscal year 2025.
The report reflects a cautious outlook on the insurance market's pricing dynamics, particularly in the motor segment, where the anticipated upward pricing trend has yet to be seen. Sabre Insurance's financial performance forecasts have been adjusted accordingly, taking into account the current market trajectory.
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