Shenzhen BYD Property & Casualty Insurance Co., Ltd. (hereinafter referred to as "BYD Insurance") has delivered its first annual report showing a turnaround from loss to profit.
The latest disclosed solvency report for the fourth quarter of 2025 reveals that for the full year of 2025, BYD Insurance achieved insurance revenue of 28.71 billion yuan, representing a doubling year-over-year growth; net profit reached 93.624 million yuan, a significant improvement from the -1.69 billion yuan loss recorded in 2024.
Notably, apart from BYD Insurance, the new energy vehicle (NEV) insurance businesses of leading insurers such as China Taiping and Ping An have also achieved underwriting profitability, gradually alleviating the long-standing industry dilemma of "car owners complaining about high premiums while insurers lament losses."
According to McKinsey projections, over the next 3 to 5 years, the loss ratio for NEV insurance will continue to optimize, and the industry is approaching a critical window for achieving underwriting profits.
The comprehensive cost ratio has significantly decreased.
BYD Insurance was formerly known as Yi'an Property & Casualty Insurance, which was one of the four specialized internet insurance companies approved for establishment by the former China Banking and Insurance Regulatory Commission (CBIRC). It was founded in Shenzhen in February 2016 with a registered capital of 1 billion yuan.
In July 2020, Yi'an Property & Casualty Insurance was placed under CBIRC administration due to issues including failure to meet solvency requirements. Two years later, the CBIRC in principle agreed for Yi'an Property & Casualty Insurance to enter bankruptcy reorganization proceedings.
In May 2023, BYD Auto Industry Co., Ltd. (hereinafter referred to as "BYD") received approval to acquire 100% of Yi'an Property & Casualty Insurance's 1 billion shares, achieving full control. In the same month, Yi'an Property & Casualty Insurance was officially renamed BYD Insurance, and its registered capital was increased from 1 billion yuan to 4 billion yuan.
"The company will empower insurance with technology, leveraging the shareholder's expertise in the new energy vehicle industry, and utilizing technologies such as artificial intelligence, big data, cloud computing, and telematics to enhance vehicle owner travel safety and provide customers with high-quality, comprehensive risk protection services," BYD Insurance stated on its official website.
Looking at performance, in 2024, BYD Insurance achieved insurance revenue of 13.51 billion yuan with a net loss of 1.69 billion yuan. In 2025, BYD Insurance achieved insurance revenue of 28.71 billion yuan, a year-on-year increase of 112.56%; net profit was 93.624 million yuan, successfully turning positive.
Delving further into profitability metrics, in 2025, BYD Insurance's cumulative combined ratio was 102.49%, a substantial decrease from the extreme level of 308.81% in 2024; the comprehensive expense ratio improved from 74.88% to 5.21%, as fixed costs were effectively diluted due to economies of scale; the comprehensive loss ratio decreased from 233.92% to 97.28%, indicating enhanced control over claims costs.
It is worth mentioning that all policy premiums for BYD Insurance were achieved through direct sales channels, amounting to 2.897 billion yuan. This means that BYD's vehicle sales growth directly impacts BYD Insurance's premium income. Data shows that BYD's total NEV sales reached 4.602 million units in 2025.
Zhang Xinyuan, head of research at consulting firm Kefangde Think Tank, pointed out in an interview that BYD Insurance's ability to achieve profitability quickly is primarily attributable to its parent company BYD's advantages in the NEV industry's full supply chain and deep data integration.
In his view, on one hand, BYD Insurance directly interfaces with BYD's vehicle sales, maintenance, and user data, enabling precise pricing, reducing claims costs, and effectively controlling risks. The challenge with NEV insurance lies in the high cost of battery assessment and repair, but BYD's control over core component technology and its maintenance system reduces intermediate links and improves claims handling efficiency.
On the other hand, BYD Insurance can reach vehicle owners through the automaker's direct sales channels, saving on the commission costs associated with traditional insurance channels. Furthermore, BYD owners exhibit relatively high brand loyalty and are more receptive to integrated "vehicle + insurance" services, which lowers customer acquisition costs.
"Additionally, BYD's vehicle data, such as battery status and driving behavior, can be used for dynamic risk assessment, enabling differentiated pricing, screening for high-quality customers from the outset, and reducing payout pressure," Zhang Xinyuan added.
Su Xiaotian, Product Manager at the Shenzhen branch of Beijing Paipaiwang Insurance Agency Co., Ltd., noted that BYD Insurance has completely eliminated intermediary fees through its parent company's direct sales network, significantly lowering overall costs; moreover, by leveraging its exclusive access to vehicle operation and battery data, it achieves precise pricing and risk management, effectively suppressing the loss ratio. Simultaneously, its internal maintenance ecosystem keeps claims costs controllable and allows some funds to flow back to the group. "These factors enable it to bypass the lengthy market cultivation period typically required, without relying on traditional scale-expansion models."
The profitability model is difficult to replicate.
In recent years, China's new energy vehicle market has demonstrated strong growth momentum. Data disclosed by the China Association of Automobile Manufacturers shows that in 2025, NEV production and sales reached 16.626 million and 16.49 million units respectively, representing year-on-year increases of 29% and 28.2%; NEV sales accounted for 47.9% of total new vehicle sales, an increase of 7 percentage points compared to the previous year.
Correspondingly, the premium scale for NEV insurance has also shown rapid growth. Yin Jiang'ao, Director of the Property Insurance Department of the National Financial Regulatory Administration (NFRA), stated at the 2025 Financial Street Forum Annual Conference that the NEV insurance premium scale in 2025 is estimated to reach 200 billion yuan, with growth exceeding 30%.
McKinsey further predicts that by 2030, China's NEV insurance premium scale will reach approximately 480 billion yuan, accounting for over 40% of the total auto insurance premiums.
Against this backdrop, NEV manufacturers are highly enthusiastic about entering the insurance industry. Besides BYD, automakers such as Xpeng, Nio, Li Auto, Tesla, and Xiaomi have all ventured into the auto insurance business through acquiring licenses or establishing new companies. So, is BYD Insurance's profitability model applicable to other NEV automakers entering the insurance field?
Zhang Xinyuan believes this needs to be viewed dialectically. The lesson to be learned is that the core logic for automakers entering insurance lies in data closure and ecosystem control. Other automakers wishing to emulate this need to build their own data collection and analysis capabilities and integrate sales, after-sales, and insurance services to create synergies. Particularly in battery safety monitoring and maintenance systems, automaker leadership can manage costs more effectively.
However, limitations are also apparent. BYD Insurance's profitability model is highly dependent on its vertical integration capabilities, which not all automakers possess to the same degree. Furthermore, the insurance industry requires professional qualifications, capital reserves, and risk management capabilities; automakers lacking experience may face regulatory and operational challenges.
"Overall, BYD Insurance's success points the way forward for NEV insurance, namely an OEM-led insurance model that uses technology and data to lower loss ratios. But other automakers need to assess the completeness of their own industrial chains to avoid blindly following the trend," Zhang Xinyuan said.
Su Xiaotian believes that BYD Insurance's profitability model holds significant reference value for NEV automakers, revealing that integrating sales channels, utilizing vehicle data, and building a service ecosystem are key to controlling the costs and risks of insurance operations.
"However, its success is highly dependent on a sufficient base of vehicle owners forming the premium foundation, deep data acquisition and analysis capabilities, and industrial chain synergies. Without these conditions, blind replication can easily lead to cost失控," Su Xiaotian pointed out. For other automakers, it is more appropriate to selectively learn from this model based on their own advantages in specific data or user operations, or to explore data-empowered models in cooperation with professional institutions, rather than simply copying it outright.
An inflection point for industry profitability is emerging.
The NEV insurance industry has long faced the challenge of "car owners complaining about high premiums while insurers lament losses." However, current indications suggest that, besides BYD Insurance, the NEV insurance businesses of leading insurers like China Taiping and Ping An have also achieved underwriting profitability, hinting at the dawn of overall industry profitability.
For example, in the first half of 2025, Ping An Property & Casualty insured 5.75 million NEVs, a year-on-year increase of 49.3%; its NEV insurance direct premium income was 21.7 billion yuan, up 46.2% year-on-year, with a market share of 27.6%, and it had already achieved underwriting profitability.
In the first half of 2025, Taiping Property & Casualty achieved direct premium income of 10.596 billion yuan from NEV insurance, increasing its share of auto insurance premiums from 14.1% in the same period last year to 19.8%, serving over 5.36 million vehicles.
Yu Bin, Vice President of China Taiping, stated at the 2025 interim results meeting that NEV insurance has entered a profitable space. However, he also noted that if NEV insurance is further broken down, the combined ratio for household vehicles is relatively ideal, while the combined ratio for commercial vehicles still exceeds 100%.
Analyzing this, Wu Xiaowei, Global Managing Partner and Head of Insurance Consulting Business in China at McKinsey, attributed it to the combined effects of technological advancement, data accumulation, and regulatory guidance.
Firstly, technological advancements in NEVs focus on two core paths: "preventing accidents" and "mitigating accident consequences/reducing repair costs," significantly enhancing vehicle safety. This, in turn, drives down accident rates and average claim amounts, ultimately optimizing the claims costs for NEV insurance.
Secondly, the application of data in the NEV insurance industry focuses on scenario-based risk analysis. The core lies in using data to accurately identify the actual usage nature of vehicles and conducting dynamic quantitative assessments from three risk dimensions: "vehicle," "person," and "behavior," promoting the optimization of risk management and insurance pricing models.
Thirdly, to promote the healthy and high-quality development of the NEV insurance industry, in January 2025, the NFRA and three other departments jointly issued the "Guiding Opinions on Deepening Reform, Strengthening Supervision, and Promoting the High-Quality Development of New Energy Vehicle Insurance." This aims, through reform and supervision, to establish a sound market-oriented, risk-based premium rate formation mechanism, fully leveraging the roles of NEV insurance in loss compensation, risk reduction, and risk management, thereby reducing accident frequency and severity of losses, and providing a solid guarantee for effectively controlling and lowering the overall loss ratio.
"The inflection point for the NEV insurance market has arrived; this is a strategic opportunity to reshape the auto insurance landscape," Wu Xiaowei emphasized. In this process, insurers need to build a full-chain transformation path starting from multiple dimensions including strategic planning, model innovation, technology application, and risk management. Only by deeply integrating the professional expertise of the insurance industry with the technological insights of the NEV industry, and refining the practices and advantages of both fields into a breakthrough tool, can they stand out in the fiercely competitive market, allow their auto insurance business to ride the wave of NEV technological development, open up a second growth curve, and jointly propel the industry towards a new journey of high-quality development.
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