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 Shu Academy

Author: Xiao Xiaо

Generating profits in just 23 months, Sunlight Property & Casualty Insurance once set the then-fastest profitability record for newly established P&C insurance companies, becoming the industry’s veritable “rising dark horse.” After two decades of development, the company has built a diversified business layout covering auto insurance, non-auto insurance, credit & surety insurance, and more.

However, in recent years, Sunlight P&C’s compliance issues have occurred frequently, becoming the biggest constraint on the group’s development. These include regulatory findings on illegal policies issued outside the insured location, a dense stream of regulatory penalty orders landing, and a surge in consumer complaints 【Download Black Cat Complaint Client】. Entering 2025, performance divergence is severe. The credit & surety insurance business’s massive loss has even dragged down the P&C business, leaving the underwriting side mired in a loss spiral.

Massive underwriting loss of 1.03 billion yuan

In 2025, Sunlight P&C achieved gross written premium from original insurance of 47.89 billion yuan, up slightly by 0.1% year over year; net profit was 313 million yuan, down 49% year over year, falling into an awkward situation of “increasing revenue without increasing profit.”

The excellent performance on the investment side provided the key support for the company’s profits. As of end-2025, the company’s investment yield and combined investment yield were as high as 5.28% and 7.17%, respectively.

As the company’s mainstay, auto insurance has demonstrated rare resilience. As of end-2025, the company achieved signed premiums for auto insurance of 25.83 billion yuan, accounting for about 53.92% of total signed premiums.

Looking back over the past four years, from 2022 to 2025, the 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, Sunlight P&C continued to deepen its intelligent life-table project for auto insurance. With the company’s own experience in operating auto insurance and support from actuarial technology, it vigorously optimized auto insurance pricing and resource allocation, and established a dedicated life table.

At the same time, the company proactively adjusted its business focus, deeply cultivated the “new renewal-to-conversion” operating logic for household vehicles, and steadily built an exclusive ecosystem for new energy vehicle operations. Taking 2025 as an example, the share of premiums from household-vehicle insurance increased by 2.6 percentage points year over year; the share of new energy vehicle insurance premiums increased by 3.2 percentage points year over year.

However, a breakthrough in auto insurance alone cannot conceal overall underwriting losses. As of end-2025, the company’s underwriting loss was 1.03 billion yuan, and the combined ratio reached 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

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

Looking at it in detail, the original premium income from accident & health insurance 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 risk coverage of more than 8.64 billion yuan for the three major staple grains, with cumulative claims of 290 million yuan.

Further, the guarantee insurance business is the root cause of the losses. In 2025, this business’s original premium income was 4.244 billion yuan, up about 5.57%, but the underwriting combined ratio was as high as 129%. The underwriting loss was 1.513 billion yuan, directly consuming the profits of other businesses.

According to the company’s official explanation, the primary reason for the losses is to adapt to changes in the market environment and requirements for macro policy adjustments. Sunlight P&C decided, starting in 2026, to stop adding new financing-type guarantee insurance businesses. Based on the business characteristics of financing-type guarantee insurance, the company, following the principle of prudence, made a large-scale reserve provision in 2025 for existing business.

Regulatory violations and disorder in multiple places

Failure in internal management is an important reason leading to risk exposure in the credit & surety insurance business. A case disclosed 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 “Sunlight P&C Xuchang Central Branch,” issuing false “Repayment Agreement,” and inflating customer income. Using the bait of “the loan is repaid by the company” and high rebates, he induced 297 people to办理 359 loan transactions, cumulatively骗取资金 of 76.23 million yuan, and was ultimately sentenced to 15 years.

This six-year “Ponzi scheme” caused direct losses of 32.36 million yuan to financial institutions such as Sunlight P&C, Ping An Puhui, and CITIC Baixin Bank.

Meanwhile, the regulator also issued a penalty notice to the Xuchang branch, ordering it to stop accepting new credit & surety insurance business for 2 years. This exposes serious deficiencies in the company’s pre-loan review, in-loan monitoring, internal compliance, and other aspects in the credit & surety insurance business. Its risk control capability failed to match the business’s high-risk attributes.

Not limited to the credit & surety insurance business. According to information obtained by “Mijian Finance,” the Wuxi Central Branch was found to have engaged in illegal and违规 behavior of issuing part of the auto insurance business in the Taizhou region as “Wuxi out-of-region issuance.”

Based on materials provided by an insider, the Financial Regulatory Branch of Taizhou issued, on November 7, 2025, a financial illegal tip-off recognition letter that clearly disclosed that, regarding issues raised by the petitioner about Sunlight P&C’s Taizhou Central Branch, after verification, everything was found to be true.

If the violations by the Taizhou branch were “internal disorder,” then the actions of the Wuxi Central Branch are a blatant突破 of the regulatory bottom line for regional operations.

Another letter from the Wuxi Financial Regulatory Branch dated December 11, 2025, shows that, for the matter raised by the petitioner—“Sunlight P&C Wuxi Central Branch issues, in Wuxi, part of the auto insurance business in the Taizhou region”—the regulator’s investigation and verification confirmed it to be without error.

So-called out-of-region issuance, in essence, is when an insurer’s branch institutions seize out-of-region market opportunities and meet performance targets by breaking through local regulatory restrictions, issuing auto insurance business from other regions in the local area in violation of rules. This not only damages consumers’ lawful rights and interests, but also severely disrupts the market order of fair competition.

Penalty notices land in abundance

According to incomplete statistics, as of end-2025, the company and its subsidiaries had accumulated penalties totaling 10.451 million yuan.

Looking across the whole year, from the first quarter to the fourth quarter, penalties were 3.875 million yuan, 840,000 yuan, 2.646 million yuan, and 3.09 million yuan, respectively. The main grounds for penalties focused on “failing to use approved or filed insurance terms and rates in accordance with regulations,” “financial data not being truthful,” “preparing false financial data,” and “using insurance agents to fabricate insurance intermediary business to extract fees,” etc.

Entering 2026, the company’s “receipt of penalty notices” trend does not appear to have eased. For example, in January, Sunlight P&C’s Lanshan Marketing Service Department of the Rizhao Central Branch was fined 150,000 yuan; in February, Sunlight P&C’s Renhuai Branch was fined 60,000 yuan by the Zunyi Financial Regulatory Branch for “charging intermediary business fees to extract commissions” ; in March, Sunlight P&C’s Zhejiang Branch was fined 400,000 yuan for “failing to use, in accordance with regulations, approved or filed insurance terms and insurance rates.”

It’s not hard to see that Sunlight P&C’s violations are not occasional actions by a single branch, but a systemic failure of compliance governance. For the company, in order to get out of its current predicament, it urgently needs to focus on its core P&C business, strengthen risk control in the credit & surety insurance business, and shed excessive reliance on investment returns. At the same time, it should confront its own shortcomings squarely, carry out thorough rectification of violations, and properly balance business growth with compliant operations.

Can Sunlight P&C get out of the predicament and regain its former glory? We will continue to keep a close watch.

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责任编辑：王馨茹