As a leading domestic life insurer, China Life has cultivated its market presence for decades. Relying on its state-backed credibility and a nationwide network of branches, it has long maintained a top-tier position within the industry. Its extensive reach into towns and villages, supported by a vast agent force, enabled rapid premium growth and solidified its foundation as a national life insurance brand.

However, this expansion came with the aftereffects of a more extensive growth model. Significant disparities in productivity at the grassroots level and persistently low-efficiency channels continued to drain operational resources, making the traditional development approach unsustainable. Recently, the company's contrasting moves—massively closing underperforming county-level service branches while heavily investing in prime real estate in a first-tier city—have become a major point of discussion.

Closure of Multiple Service Branches on the Same Day

On July 1st, the Pingliang Regulatory Bureau under the National Financial Regulatory Administration issued a batch of seven approvals, collectively authorizing the closure of seven marketing service branches of China Life in Pingliang, Gansu province. These closures spanned multiple districts and counties including Zhuanglang, Lingtai, Kongtong, Jingning, and Huating, with most being township-level outlets.

The approval notices stipulated that upon receiving the documents, China Life's Gansu Provincial Branch must immediately cease all business activities at these service branches. They are required to surrender their operating licenses to the Pingliang Regulatory Bureau within 15 working days and complete all relevant procedures in accordance with laws and regulations.

This is not an isolated incident. On June 18th, the Loudi Financial Regulatory Bureau issued approvals agreeing to the closure of three marketing service branches: the Hetang and Doulishan branches under China Life's Lianyuan sub-branch, and the Suoshi branch under its Shuangfeng sub-branch.

On June 10th, the Tongren Financial Regulatory Bureau released three approvals, agreeing to close China Life's Changbao marketing service branch in Dejiang sub-branch, its Xinzhai branch in Yinjiang sub-branch, and its Longtang branch in Shiqian sub-branch.

On June 2nd, the Sanmenxia Regulatory Bureau issued ten approvals, agreeing to close multiple local marketing service branches of China Life, covering branches in areas such as Lushi, Shanzhou, Mianchi, Yima, and Lingbao. Clearly, China Life's recent closure activities have been frequent, indicating a nationwide trend of channel rationalization.

By the end of 2025, the number of China Life's branches and sub-branches had decreased to 17,000, a continued decline from its peak. The previous model of extensive coverage, aiming for an outlet in every village and a station in every township, is accelerating its exit from the stage.

For a long time, these grassroots outlets were the primary vehicle for China Life to capture the county-level market and reach customers at the local level. When insurance services were less developed and online channels were immature, physical branches shouldered multiple tasks including customer acquisition, policy signing, claims settlement, and customer service, serving as the main pathway for the company's scale expansion.

However, as the broader industry landscape shifts, the value of township-level service branches is rapidly diminishing.

First, there is a persistent mismatch between productivity and cost. Many township marketing service branches cover areas with smaller populations and customers with weaker premium-paying capacity, leading to chronically low productivity. The costs of premises, personnel, and operations continuously consume resources. Some outlets have even operated below the break-even point for extended periods, becoming inefficient burdens within the channel system.

Second, digitalization is comprehensively replacing offline functions. Currently, over 99% of China Life's claims are processed electronically online, with AI-powered claims achieving second-level reviews. Most services, including policy application, policy maintenance, follow-ups, and renewals, can be handled via the life insurance app or official channels. The service function of physical branches has been significantly reduced, especially for township outlets with lower business volumes, where their existence can no longer justify the operational costs.

A deeper driver is the ripple effect of streamlining the agent force. Previously, a core function of grassroots service branches was to host agent teams and support offline sales activities. However, the industry-wide effort to trim excess and improve quality has continued in recent years. China Life's agent count is also undergoing optimization, shifting focus from increasing headcount to enhancing per-agent productivity.

It is important to clarify that this adjustment primarily targets end-tier township marketing service branches. Core sub-branches at the county level and above, along with customer service centers, remain unchanged.

Investing Nearly 3 Billion for a Prime CBD Plot

In stark contrast to the substantial "subtraction" on the channel side is China Life's decisive "addition" on the asset side.

On June 25th, the commercial and financial land plot Z10 in the core area of Beijing's Chaoyang CBD was formally transacted. Beijing Jinting Real Estate Co., Ltd. acquired the plot at the reserve price of 2.993 billion yuan.

A review of the equity structure reveals that the actual controlling entity of this company is China Life. This significant land acquisition move invites deep consideration.

Examining the plot itself, its scarcity is highly pronounced. Located in the heart of Beijing's CBD, the area is surrounded by numerous headquarters of financial institutions and premium commercial properties, making it one of the highest-value business districts in China. Furthermore, it is one of the few remaining undeveloped plots within this core zone, giving it an irreplicable locational value. The land transfer terms require the holder to retain full ownership until the maximum usage period, prohibiting piecemeal sales, which differs entirely from the fast-turnover logic of typical real estate development.

For China Life, this investment does not represent a foray into property development. Rather, it is a standard asset allocation move for insurance funds, underpinned by the fundamental nature of life insurance capital. Life insurance funds represent long-duration liabilities, with average policy terms extending over a decade. They require matching with assets that have sufficiently long durations, stable returns, and controllable risks to achieve duration matching between liabilities and assets.

The current environment features persistently declining long-term interest rates, decreasing yields on fixed-income assets, and heightened volatility in equity markets. An "asset shortage" has become a long-term challenge for insurance capital.

Against this backdrop, self-owned commercial real estate in prime locations of core cities has become a key target for insurance funds to hedge against declining interest rates and optimize their asset structures. This is due to such assets' potential for long-term, stable rental cash flows, strong inflation-hedging properties, and capital preservation capabilities.

The requirement for full self-ownership of this CBD plot aligns perfectly with the long-term holding needs of insurance capital. China Life does not need to rely on short-term sales proceeds. Instead, it can secure stable rental income through long-term operation while benefiting from the long-term appreciation of a core asset. This perfectly matches the risk-return profile of life insurance funds and aligns with the prudent and cautious investment style characteristic of insurance capital.

The industry is witnessing a concentration of assets towards core holdings among leading companies, while the operating space for smaller, trailing institutions continues to narrow. China Life's two strategic moves serve as a vivid illustration of this major industry transformation.