Direct sales miracle? BYD Property & Casualty Insurance's comprehensive expense ratio drops to 5.21%, achieving first-year profitability

If treating the 2024 auto insurance trial as a stress test, then BYD Insurance just delivered its 2025 report card, which indicates that this insurer backed by a manufacturing giant has passed the most dangerous adjustment period.

The solvency report shows that in 2025, BYD Insurance not only doubled its premium scale but also achieved a turnaround from significant losses to profitability. For the insurance industry, which has long been troubled by the difficulty of “doing new energy vehicle insurance,” this report provides a highly valuable non-typical sample for observation.

The data-level recovery is obvious.

In 2025, BYD Insurance achieved a total insurance business income of 2.871 billion yuan, a 112.56% increase from the previous year; net profit reached 93.624 million yuan, reversing the 169 million yuan loss in 2024.

The core logic behind the performance reversal does not stem from improvements on the underwriting side but more from BYD Insurance’s extreme utilization of the group’s vertical system.

In traditional auto insurance cost structures, insurance companies need to pay “pass-through fees” to 4S shops and agents. However, all policies signed by BYD Insurance in 2025 were sold directly through direct channels.

Reflected in the financial data, BYD Insurance’s commission and fee expenses in 2025 were zero, with an overall expense ratio of only 5.21%, compared to the industry average of around 25%.

The cost advantage brought by “eliminating intermediaries” has freed up significant claims reserves for BYD Insurance, allowing the company to maintain overall financial balance despite underwriting pressures.

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

The 13 major related-party transactions in the fourth quarter mainly involved BYD Automotive Industry Co., Ltd., indicating that claims and repairs did not flow into uncontrollable external markets but were completed within the group.

Loss ratio remains the toughest challenge for new energy vehicle insurance.

The report shows that BYD Insurance’s combined loss ratio in 2025 was 97.28%. Although this is a significant improvement from the 233% loss ratio in 2024, the company’s underwriting business still incurs losses overall.

The ultimate profitability relies more on investment gains.

In 2025, BYD Insurance achieved a comprehensive investment return rate of 3.98%. Investment income from nearly 2.9 billion yuan in premium deposits offset the underwriting deficit and contributed nearly 100 million yuan in net profit.

However, aggressive expansion strategies also carry risks.

As the premium scale rapidly increases, the rate of capital consumption is accelerating. By the end of 2025, BYD Insurance’s core solvency adequacy ratio plummeted from 1173.66% at the end of the previous year to 589.86%, with minimum capital requirements doubling to 564 million yuan.

At the current growth rate, if the premium scale reaches 5 billion or even 10 billion yuan, the existing capital will be quickly diluted, and future capital raising pressures cannot be ignored.

The real test for BYD Insurance in 2026 will be whether, as the premium scale continues to expand and the loss ratio approaches the breakeven point, it can maintain this fragile balance built on data dominance and a direct sales model.

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