The investment side alone sustains profits, while the underwriting side suffers huge losses. Sunshine Property & Casualty Insurance faces setbacks in its diversified strategy.

Source: Yan Shushi Institute

Author: Xiao Xiao

By turning a profit in only 23 months, Sunshine Property & Casualty Insurance once set the fastest-profit record among newly established P&C insurers at the time, becoming a bona fide “up-and-coming dark horse” in the P&C industry. After two decades of development, the company has built a diversified business layout covering auto insurance, non-auto insurance, credit insurance, and more.

However, in recent years, compliance issues at Sunshine Property & Casualty Insurance have arisen frequently, becoming the biggest constraint on the group’s development. These include regulator-verified violations such as issuing policies in other locations, densely issued administrative penalties, and a surge in consumer complaints 【Download the Black Cat Complaint Client】. Entering 2025, performance has diverged sharply; and the massive loss in the credit insurance business has further dragged down the P&C business, leaving the underwriting end stuck in a loss quagmire.

Massive underwriting loss of 1.03 billion yuan

In 2025, Sunshine Property & Casualty Insurance achieved gross premium income of 47.89 billion yuan from original insurance, a slight year-on-year increase of 0.1%. Net profit was 313 million yuan, down 49% year on year, putting it in an awkward situation of “increased revenue without increased profit.”

Strong performance on the investment side provides the company with key support. By the end of 2025, the company’s return on investment and its combined investment return were as high as 5.28% and 7.17%, respectively.

Auto insurance, the company’s mainstay, has shown rare resilience. As of the end of 2025, the company’s auto insurance signed premium was 25.83 billion yuan, accounting for about 53.92% of total signed premium.

Looking back at the past four years, from 2022 to 2025, underwriting profit from auto insurance was 632 million yuan, 286 million yuan, 244 million yuan, and 480 million yuan respectively. Although it experienced fluctuations, it rebounded strongly in 2025.

At the beginning of 2022, Sunshine Property & Casualty Insurance continued to deepen its smart life table project for auto insurance. With its own experience in operating auto insurance and support from actuarial technology, it actively optimized auto insurance pricing and resource allocation, establishing a dedicated life table.

Meanwhile, the company proactively adjusted its business focus, deeply engaged in the “new renewal-to-revenue” operating logic for household vehicles, and solidly built a dedicated ecosystem for new energy vehicle operations. Taking 2025 as an example, the household vehicle premium share increased by 2.6 percentage points year over year, while the new energy vehicle insurance premium share increased by 3.2 percentage points year over year.

However, even a breakthrough in a single segment of auto insurance cannot conceal the overall underwriting losses. As of the end of 2025, the company had an underwriting loss of 1.03 billion yuan, with a combined cost ratio of 102.1%. Among them, the combined expense ratio and combined loss ratio were 30.95% and 71.15%, respectively.

Image source: 2025 Q4 solvency report

Non-auto insurance business has become the “principal culprit” behind underwriting losses. Although the top five non-auto insurance lines collectively signed premium of 18.682 billion yuan, up 4.59% year on year, and non-guarantee insurance lines achieved underwriting profit of 490 million yuan, the massive loss in guarantee insurance directly absorbed all the results.

Breaking it down further, original premium income for accidental injury and short-term health insurance was 7.79 billion yuan, up 8.7%; original premium income was 2.7 billion yuan, up 9.2%; agricultural insurance provided more than 8.64 billion yuan in risk protection for the three major staple grain crops, with cumulative claims of 290 million yuan.

Looking even deeper, guarantee insurance business is the root cause of the losses. In 2025, this line’s original premium income was 4.244 billion yuan, up about 5.57% year on year. However, its underwriting combined cost ratio was as high as 129%, resulting in an underwriting loss of 1.513 billion yuan, directly wiping out the profits from other businesses.

According to the company’s official explanation, the primary reason for the losses is that, to adapt to changes in the market environment and requirements for adjustments to macro policies, Sunshine Property & Casualty Insurance decided to stop adding new financing-type guarantee insurance business starting in 2026. Based on the business characteristics of financing-type guarantee insurance, the company, following a prudent principle, made a large-scale provisioning for existing business in 2025.

Widespread compliance violations in multiple locations

Failure in internal management is an important reason for the exposure of risks in the credit insurance business. A case revealed in 2025 shows that He Tinghan, manager of the Xuchang branch, to meet performance targets, from 2017 onward used methods such as forging seals like “Sunshine Property & Casualty Insurance Xuchang Central Branch Company” and issuing false “Repayment Agreement” documents and inflating customer income. Using the bait of “the loan will be repaid by the company” and high rebates, he induced 297 people to办理 359 loan transactions,累计骗取资金 762.3 million yuan, and ultimately was sentenced to 15 years in prison.

This six-year-long “Ponzi scheme” caused direct losses of 32.36 million yuan to financial institutions including Sunshine Property & Casualty Insurance, Ping An Puhui, and CITIC Baixin Bank.

Regulators will also issue penalties to the Xuchang Central Sub-branch, ordering it to stop accepting new credit insurance business for 2 years. This exposed serious deficiencies in the company’s credit insurance business processes, including pre-loan review, during-loan monitoring, and internal compliance, and showed that its risk management and control capabilities could not match the high-risk attributes of the business.

It is not limited to the credit insurance business. According to “Secret Investigator Finance,” the Wuxi Central Sub-branch was found to have engaged in illegal and non-compliant conduct of “issuing auto insurance policies in Wuxi for part of the auto insurance business in the Taizhou region.”

According to materials provided by an insider, a Financial Illegal Clues Determination Letter issued by the Taizhou Financial Regulatory Sub-bureau on November 7, 2025 clearly disclosed that the issues raised by the complainant regarding Sunshine Property & Casualty Insurance’s Taizhou Central Sub-branch were found to be fully true after verification.

If the violations of the Taizhou Central Sub-branch were “internal chaos,” then the actions of the Wuxi Central Sub-branch clearly crossed the regulatory bottom line for regional operations.

Another Reply Letter dated December 11, 2025 from the Wuxi Financial Regulatory Sub-bureau to the complainant shows that regarding the matter raised by the complainant—that “Sunshine Property & Casualty Insurance’s Wuxi Central Sub-branch issues auto insurance policies in Wuxi for some auto insurance business in the Taizhou region”—after investigation and verification, it was found to be accurate.

So-called “issuing policies in other places” is, in essence, when an insurer’s branches, to capture the off-site market and meet performance targets, break through local regulatory restrictions and illegally issue auto insurance policies in the local area for auto insurance business from other regions. This not only harms consumers’ lawful rights and interests, but also seriously disrupts the market order of fair competition.

A dense stream of penalty notices issued

According to incomplete statistics, by the end of 2025, the company and its affiliated branches had accumulated fines totaling 10.451 million yuan.

Looking across the year, from the first quarter to the fourth quarter, it received fines of 3.875 million yuan, 840,000 yuan, 2.646 million yuan, and 3.09 million yuan, respectively. The main grounds for the penalties included “failure to use approved or filed insurance clauses and premium rates in accordance with regulations,” “financial data not being true,” “preparation of false financial data,” and “using insurance agents to fabricate insurance intermediary business to extract fees,” among others.

Entering 2026, the company’s “trend of receiving penalty notices” does not appear to have eased. In January, Sunshine Property & Casualty Insurance’s Lanshan Marketing Service Department of the Rizhao Central Sub-branch was fined 150,000 yuan; in February, Sunshine Property & Casualty Insurance’s Renhuai Sub-branch was fined 60,000 yuan by the Zunyi Financial Regulatory Sub-bureau for “fraudulently listing intermediary business to extract service charges”; and in March, Sunshine Property & Casualty Insurance’s Zhejiang Branch was fined 400,000 yuan for “not using approved or filed insurance clauses and insurance premium rates in accordance with regulations.”

It is not hard to see that Sunshine Property & Casualty Insurance’s violations are not one-off actions by a single branch, but a systemic failure of compliance controls. For the company, if it wants to get out of its current predicament, it urgently needs to focus on its core P&C business, strengthen risk control for credit insurance business, and break away from excessive reliance on investment returns. At the same time, it must confront its own shortcomings, thoroughly rectify its violations, and properly balance business growth with compliant operations.

Can Sunshine Property & Casualty Insurance get out of its predicament and regain its past glory? We will continue to keep a close watch.

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责任编辑：王馨茹