Direct Sales Miracle? BYD's property insurance comprehensive expense ratio drops to 5.21%, achieving first-year profitability

If the trial of car insurance in 2024 is viewed as a stress test, then the 2025 report just submitted by BYD Property & Casualty Insurance indicates that this insurance company, backed by a manufacturing giant, has passed the most dangerous adjustment period.

The solvency report shows that BYD Property & Casualty Insurance not only doubled its premium scale in 2025 but also completed a turnaround from significant losses to profitability. For an insurance industry long troubled by the difficulty of insuring new energy vehicles, this report provides a highly valuable atypical sample for observation.

The data-level recovery is evident.

In 2025, BYD Property & Casualty Insurance achieved a cumulative insurance business income of 2.871 billion yuan, a year-on-year increase of 112.56%; net profit reached 93.624 million yuan, reversing the loss of 169 million yuan in 2024.

The core logic behind the performance reversal does not stem from improvements on the underwriting side but rather from BYD Property & Casualty Insurance's extreme utilization of the group's vertical system.

In the traditional car insurance cost structure, insurance companies need to pay "tolls" to 4S shops and agents, while BYD Property & Casualty Insurance's premiums in 2025 were all realized through direct sales channels;

Reflected in the financial report data, BYD Property & Casualty Insurance's commission and fee expenses in 2025 were zero, and the overall combined expense ratio was only 5.21%, while the industry average was around 25%.

The cost advantages brought by "removing intermediaries" have freed up significant compensation space for BYD Property & Casualty Insurance, allowing the company to maintain overall financial balance even under pressure on the underwriting side.

It is worth noting that the sustainability of this model is built on BYD's absolute control over the industrial chain:

The 13 major related-party transactions that occurred in the fourth quarter primarily targeted BYD Auto Industry Co., Ltd., which means that claims and repairs did not flow to uncontrollable external markets but were completed internally within the group.

The loss ratio remains the toughest challenge for new energy vehicle insurance.

The report shows that BYD Property & Casualty Insurance's combined loss ratio in 2025 was 97.28%. Although this represents a qualitative leap compared to the 233% loss ratio in 2024, overall, the company's underwriting business still incurs losses.

The final profitability relies more on the investment side.

In 2025, BYD Property & Casualty Insurance achieved a combined investment return rate of 3.98%, with nearly 2.9 billion yuan in premium accumulation generating investment income that filled the underwriting gap and contributed nearly 100 million yuan in net profit.

However, the aggressive expansion strategy is not without concerns.

As the premium scale violently increases, the consumption rate of capital is accelerating. By the end of 2025, BYD Property & Casualty Insurance's core solvency adequacy ratio plummeted from 1173.66% at the end of the previous year to 589.86%, while the minimum capital requirement doubled to 564 million yuan.

At the current growth rate, if the premium scale moves towards 5 billion or even 10 billion, the existing capital will be rapidly diluted, and the pressure for future capital increases cannot be ignored.

In the upcoming 2026, BYD Property & Casualty Insurance's real test may lie in whether it can maintain this fragile balance built on data dominance and direct sales models when the premium scale continues to expand and the loss ratio approaches the breakeven point