In recent years, the Chinese insurance industry has been continuously closing down branches and clearing out insurance agents. The latest data shows that the Chinese insurance industry has already shut down nearly 1,800 insurance branches this year, which is not much different from the total of 1,984 branches closed in 2024. At the same time, the number of insurance agents in the industry continues to decrease.
Industry insiders believe that county-level insurance branches have a poor input-output ratio, making it difficult to sustain long-term losses, and thus have become a focus of closures.
According to a report by Economic Information Daily on Monday, July 28, a certain insurance industry analyst stated, “The closure of nearly 1,800 branches within the year, especially the substantial contraction of leading companies at the county level, is an inevitable choice for the industry facing weak growth in new policies, rising cost pressures, and the deep transformation of distribution channels.”
As for the reasons behind the slimming down of insurance companies, it is widely believed in the industry that insurance companies are facing increased operating pressure, prompting them to close down inefficient branches to reduce operating costs.
Insurance companies are hoping to cut costs by “trimming and getting fit,” clearing out inefficient network points to reduce operating expenses.
Dr. Longge, Associate Director of the Center for Innovation and Risk Management at the University of International Business and Economics, recently pointed out to 21st Century Business Herald that county-level marketing service departments have an annual operating cost of over a million yuan, and the phenomenon of “poor input-output ratio” is severe in third and fourth-tier cities, making it unsustainable to operate at a long-term loss.
According to information from the China Banking and Insurance Regulatory Commission, as of July 18, insurance companies nationwide have closed down a total of 1,799 branches and established 225 branches within the year, resulting in a net decrease of 1,574 branches. This includes 1,099 marketing service departments of insurance companies, 564 sub-branches, 86 center sub-branches, 14 telephone sales centers, and 3 provincial branches.
Looking at the specifics of the branch closures, the withdrawn institutions are mainly concentrated in county-level areas and third and fourth-tier cities. Among them, the closure scale of top insurance companies is particularly significant, with some companies having closed over a hundred branches within the year.
From 2019 to 2024, a total of over 10,000 insurance company branches have continuously exited the market. According to 21st Century Business Herald, the number of branches closed by insurance companies exiting the market in each year from 2020 to 2024 was 971, 2,197, 3,019, 2,065, and 1,984 respectively. Although the number of insurance company branches exiting the market decreased in 2023 and 2024, it still remained high.
The closure of branch outlets inevitably leads to a significant reduction in the number of employees. According to Sun Ting, an analyst at Dongwu Securities, by the end of 2024, the total number of agents of the top five listed insurance companies had decreased by 3.7% to 1.381 million.
Sun Ting predicts that by the end of May 2025, the number of agents for China Life, Ping An Insurance, China Taiping, New China Life, and China Pacific Insurance will decrease by 8%, 13%, 6%, 1%, and 2% respectively compared to the beginning of the year.
In the “2024 China Insurance Intermediary Market Ecology White Paper” released in November 2024, it was shown that the number of life insurance company agents decreased sharply to 2.81 million in 2023, a decrease of 6.31 million from the peak of 9.12 million in 2019. The number of insurance agents at the end of 2023 was almost equal to that of 2013 at 2.9 million, marking a regression in the size of insurance agents to ten years ago.
During the release event of the “White Paper,” Zhu Lan, a Ph.D. supervisor at Peking University and associate professor of finance, stated, “If we only count active personnel, it might not even reach 1 million.” This means that the insurance industry has lost over eight million insurance agents in four years.