If the 2024 pilot of auto insurance was considered a stress test, BYD Property & Casualty Insurance's 2025 results indicate that this insurer, backed by a manufacturing giant, has navigated through its most critical break-in period. Solvency reports reveal that in 2025, BYD Property & Casualty Insurance not only doubled its premium scale but also reversed from significant losses to profitability. For an insurance industry long troubled by the challenges of new energy vehicle insurance, this report provides a highly valuable atypical case study.
The data improvements are evident. In 2025, BYD Property & Casualty Insurance accumulated insurance revenue of 2.871 billion yuan, a 112.56% increase from the previous year. Net profit reached 93.624 million yuan, turning around a 169 million yuan loss recorded in 2024.
The core logic behind this performance reversal stems not from underwriting improvements but rather from BYD Property & Casualty Insurance's maximal utilization of its parent group's vertical integration. In traditional auto insurance cost structures, insurers must pay "toll fees" to 4S stores and agents. However, all of BYD Property & Casualty Insurance's 2025 written premiums were achieved through direct sales channels. This is reflected in the financial reports: the company recorded zero commission expenses, with an overall comprehensive expense ratio of just 5.21%, compared to an industry average of approximately 25%.
The cost advantage from disintermediation created substantial room for claim payments, enabling the company to achieve overall financial balance despite pressure on the underwriting side. Notably, the sustainability of this model relies on BYD's absolute control over its industrial chain: the 13 significant related-party transactions in the fourth quarter primarily involved BYD Auto Industry Company Limited, indicating that claim repairs were handled within the group rather than flowing to external, uncontrollable markets.
The claim ratio remains the toughest challenge for new energy vehicle insurance. Reports show BYD Property & Casualty Insurance's comprehensive claim ratio reached 97.28% in 2025. While this represents a qualitative improvement from the 233% ratio in 2024, the underwriting business still operates at a loss overall. The ultimate profitability was largely supported by investment returns. In 2025, the company achieved a comprehensive investment yield of 3.98%, with investment income from nearly 2.9 billion yuan in premium deposits filling the underwriting gap and contributing close to 100 million yuan in net profit.
However, the aggressive expansion strategy carries underlying concerns. As premium scale surged dramatically, capital consumption accelerated. By the end of 2025, BYD Property & Casualty Insurance's core solvency adequacy ratio plummeted from 1173.66% to 589.86%, while minimum capital requirements doubled to 564 million yuan. At the current growth rate, if premium scale advances toward 5 billion or even 10 billion yuan, existing capital will be rapidly diluted, creating undeniable future pressure for capital increases.
The true test for BYD Property & Casualty Insurance in 2026 will be whether, as premium volumes continue to expand, BYD can maintain this fragile balance built on data dominance and direct sales models while walking the tightrope of claim ratios approaching breakeven points.
Comments