On my X5 I screw in a spare towing hook I bought. I screw it into the towing hook thread (the fitting is at the side of the tow ball) then attach the breakaway cable to this.
Instead of using the one that came with the car, which is bulky and restricts the fitting of the towball I got an old towing hook from a scrapyard (it came off and old Volvo) because the screw threads are fairly common. This was narrower but it needed filing down a touch, just enough to allow the tow ball attachment to go on.
However, I believe it is legal to wrap the cable around the tow ball anyway