In the context of China’s continued economic downturn, the insurance industry is undergoing a significant “slimming wave”. According to official data, in the past five years, the branches of Chinese insurance companies have been continuously shrinking, with a total of 11,158 branches exiting the market. This phenomenon not only reflects the shrinking demand in the Chinese market but also highlights the cost pressures and transformation challenges faced by the industry.
Recently, the official website of the China Banking and Insurance Regulatory Commission has successively issued several approval notices, agreeing to revoke the branches of Everbright Sino-Everbright Life Insurance Xi’an Center, Ping An Pension Insurance Sanya Center, Taikang Life Insurance Guangdong Yangjiang Zapo Marketing Service Department, Chang An Property Insurance Laixi Branch, PICC Property and Casualty Luoding Branch Sulong Marketing Service Department, and China Life Tianjin Ninghe District Branch Zaogezhen Marketing Service Department. These cases are just a microcosm of the wave of branch closures in the Chinese insurance industry.
In fact, over the past five years, the branches of insurance companies have been in a state of contraction.
According to official statistics, from 2020 to 2024, the number of closures of branches of insurance companies showed a fluctuating trend: in 2020, at the beginning of the COVID-19 pandemic, there were 971 closures; in 2021, it surged to 2,197; reaching a peak of 2,966 in 2022; falling back to 2,065 in 2023; and 2,013 in 2024.
As we enter 2025, the pace of insurance companies withdrawing branches continues unabated. According to the International Financial News, as of the end of May, a total of 946 branches were removed from insurance companies, including 753 branches of life insurance companies and 193 branches of property insurance companies.
Over the past five years, a total of 11,158 branches of Chinese insurance companies have exited the market.
Among them, the adjustments made by Taikang Life are particularly prominent, with 178 branches withdrawn during the year, including center branches, local branches, business departments, and marketing service departments. Foreign insurance companies like Starr Companies have also been downsizing, closing several provincial branches in recent years, currently retaining only 6 provincial institutions.
According to reports, personnel related to Taikang Life believe that the “major slimming” of branches is due to the economic downturn and market contraction, with declining consumer purchasing power and willingness in third- and fourth-tier cities and below, limited market capacity, and difficulties in business expansion.
Additionally, Yang Fan, General Manager of Beijing Paipai Net Insurance Agency Co., Ltd., stated that there are several reasons for the branch closures: changes in the market environment, limited market capacity in some branch locations, rising labor and management costs, increased industry competition, and digital transformation.