BYD Property & Casualty Insurance recently disclosed its preliminary solvency summary for the fourth quarter of 2025 (pre-audit), revealing a doubling of insurance revenue to 2.871 billion yuan compared to the previous year. The company swung to a net profit of 93.624 million yuan in 2025 from a net loss of 169 million yuan in 2024.
The turnaround to profitability was primarily driven by substantial improvements in underwriting performance. An analysis of the "three ratios" shows a major optimization in the company's combined ratio, which dropped significantly from 308.81% in 2024 to 102.49% in 2025, bringing it to the brink of underwriting profitability. The expense ratio was rapidly reduced from 74.88% to just 5.21%, demonstrating notable cost dilution effects from economies of scale. Concurrently, the loss ratio declined steadily from 233.92% to 97.28%.
Industry experts attribute BYD Property & Casualty's rapid profitability to synergistic advantages with its parent company, BYD Company Limited. Effective cost control and precise risk pricing have enabled swift revenue growth and efficient management of loss ratios. Furthermore, the direct sales model has eliminated intermediary costs, thereby enhancing service efficiency.
Against the backdrop of overall underwriting pressure in the new energy vehicle (NEV) insurance sector, BYD Property & Casualty's performance and operational model have prompted a re-evaluation of profitability pathways for NEV insurance. Some vehicle owners have voiced complaints on social media about slow claims processing, poor service, and premiums that are not competitively priced compared to other providers. As BYD's insurance business expands rapidly, its ability to keep pace with after-sales service demands remains a point of observation.
In May 2023, BYD Auto Industry Co., Ltd. completed the full acquisition of Yi'an Property & Casualty Insurance, subsequently rebranding it as Shenzhen BYD Property & Casualty Insurance Co., Ltd. (BYD Property & Casualty). Between July and September of the same year, the company increased its registered capital from 1 billion yuan to 4 billion yuan, positioning itself for the NEV insurance market.
Since formally launching its NEV insurance business in May 2024, BYD Property & Casualty has experienced explosive premium growth. In the first half of 2025, the company's insurance revenue reached 1.398 billion yuan, surpassing the total for the entire year of 2024, and it achieved a net profit of 31.3459 million yuan. This reversed the 169 million yuan loss from 2024, making it one of the few auto manufacturer-affiliated insurers to achieve profitability shortly after commencing operations.
Full-year data for 2025 shows insurance revenue of 2.87 billion yuan, doubling from 1.351 billion yuan in 2024, indicating a leap in business scale. The annual net profit reached 93.624 million yuan. The core driver of this profitability shift was the marked optimization of the three key underwriting ratios.
In 2025, BYD Property & Casualty's combined ratio fell to 102.49%, a significant drop from the high of 308.81% in 2024. The loss ratio stood at 97.28%, while the expense ratio was a mere 5.21%, substantially below the industry average.
Industry analysis suggests that BYD Property & Casualty's rapid path to profitability is inextricably linked to the deep industrial synergy with its parent company, BYD Company Limited, within the NEV sector.
Recently, major global automakers have released their 2025 sales figures, with BYD securing a position among the top five global automakers by volume for the first time, with annual sales of 4.602 million vehicles. In the NEV segment, BYD maintained its global leadership, topping global NEV sales charts for the fourth consecutive year.
Consequently, BYD Property & Casualty benefits from a stable and vast customer base. Its business structure is heavily skewed towards auto insurance, which constituted over 99% of its business in 2025, with written premiums reaching 2.836 billion yuan. This rapid expansion not only dilutes fixed costs but also provides a substantial data foundation for accurate risk pricing.
The direct sales model is pivotal to its cost control strategy. Unlike traditional insurers reliant on intermediary channels, 100% of BYD Property & Casualty's 2025 written premiums originated from direct sales, resulting in a 0% allocation for commissions and fees, completely bypassing the high costs associated with traditional agents and brokers. Additionally, the insurer engaged in 13 significant related-party transactions with BYD Auto Industry Co., Ltd. during 2025, totaling over 416 million yuan.
Despite impressive financial results, the rapid business expansion presents multiple challenges. Some policyholders have reported issues such as slow claims settlement and unresponsive service on social media platforms.
Recently, a policyholder complained online about a minor accident taking six months to resolve, prompting others to share similar experiences. One user commented, "Also with BYD insurance, had a claim last October, and the process hasn't moved an inch when I check now," while another noted, "No response for days, even a week, after reporting an issue."
Furthermore, some owners claim their premiums are not noticeably cheaper than other providers, and may even be higher for certain models. However, this perception contrasts with average premium data. The average premium per vehicle was 4,500 yuan in 2024 but decreased to 4,054.53 yuan in 2025, a nearly 10% year-on-year drop. Insurance observers suggest that scale advantages provide not only substantial premium volume but also ample room for precise customer selection and effective loss ratio reduction.
With rapid expansion, the company's solvency metrics have declined significantly. By the end of the fourth quarter of 2025, BYD Property & Casualty's core and comprehensive solvency adequacy ratios were 589.86% and 589.95%, respectively. These figures represent decreases of 66.56 and 66.59 percentage points compared to the end of the previous quarter. In contrast, at the end of the fourth quarter of 2024, the ratios were 1173.66% and 1173.83%.
The company attributed the decline in comprehensive solvency primarily to an increase in minimum capital requirements. This was driven by a 32 million yuan (10.29%) increase due to heightened exposure to reserve risk and catastrophe risk, and a 50 million yuan (13.97%) increase in market risk capital requirements, influenced by changes in the allocation to equity assets and other factors.
While BYD Property & Casualty had no equity investments in 2024, by 2025, the book value of its equity investments reached 597 million yuan. Investment return data for 2025 shows an investment yield of 2.81% and a comprehensive investment yield of 3.98%.
BYD's insurance business approaching profitability sends a positive signal to the broader NEV insurance industry.
A recent Guosen Securities research report noted that by 2025, the annual premium scale for NEV insurance in China had surpassed 200 billion yuan, with growth rates continuing to outpace the overall auto insurance market. The Chinese NEV insurance market currently exhibits characteristics of high growth coupled with high losses. The contradiction between "high premiums and high赔付" reflects a fundamental mismatch between traditional insurance products and the structural features of new energy vehicles.
By the end of 2024, the Chinese insurance industry had insured 31.05 million NEVs, generating premium income of 140.9 billion yuan and providing risk coverage amounting to 106 trillion yuan. However, the industry simultaneously reported an underwriting loss of 5.7 billion yuan, indicating a trend of consecutive losses.
The NEV insurance sector in China is at a critical juncture, transitioning from "passive underwriting" to "active risk management" and evolving from "point-to-point competition" to "ecosystem collaboration." Future success hinges on cooperation between automakers and insurers to address industry pain points like pricing-risk mismatch and inadequate service, ultimately creating a mutually beneficial market landscape.
Leading insurers show that market share in NEV insurance is stabilizing, with some achieving underwriting profitability. In the first half of 2025, Ping An Property & Casualty reported NEV direct written premiums of 21.7 billion yuan, a 46.2% year-on-year increase, capturing a 27.6% market share and providing 21 trillion yuan in risk coverage. CPIC Property & Casualty achieved NEV direct written premiums of 10.596 billion yuan, increasing its share of auto insurance premiums from 14.1% to 19.8% compared to the same period last year.
Yu Bin, Vice President of China Pacific Insurance Group, previously highlighted strategies for reducing the combined ratio in NEV insurance: "First, strengthen cooperation with OEMs and enhance ecosystem collaboration to reduce loss costs; second, utilize data for effective risk control and selection."
From an industry perspective, the entry of automakers into the NEV insurance space is highly beneficial for addressing current challenges. Besides BYD, other "automaker-affiliated" insurers include BP Tianxing Property & Casualty, backed by entities like Volkswagen and Xiaomi. This company officially commenced operations on January 22 this year, focusing on the NEV insurance sector, developing specialized products around the NEV ecosystem, and committed to continuously optimizing claims processes to enhance customer experience.
"BYD Property & Casualty's business model is theoretically sound and has been validated by its 2025 operational data," said Wang Guojun, a professor at the University of International Business and Economics Insurance School. He added that no business model is perfect, and BYD Property & Casualty must continually refine its approach, leveraging strengths and mitigating weaknesses. "Whether it's manufacturing cars, repairing them, or providing auto insurance, the customer must always come first. Neglecting or exploiting customers might yield short-term gains but will inevitably lead to long-term losses."
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