Since 2020, insurance companies have been conducting large-scale closures of offline business locations and branch offices, with more than 10,000 locations already shut down. This represents a proactive choice by the insurance industry under multiple pressures including digital transformation, cost control, and changing market demands. For 3 million insurance agents, this transformation presents both challenges and opportunities.

According to the latest data from the National Financial Regulatory Administration, as of August 27, 2025, insurance companies have closed 2,153 branch offices and grassroots service departments, while establishing only 254 new locations, resulting in a net reduction of 1,899 locations. Since 2020, more than 10,000 locations have been closed in total.

This strategic transformation from scale expansion to "quality and efficiency improvement" is profoundly changing the channel ecosystem and operational model of the insurance industry.

For nearly 3 million insurance agents, this represents both a challenge and an opportunity.

**Accelerated Network Contraction as Leading Insurers Actively Downsize**

The insurance industry's branch office "downsizing" pace accelerated significantly in 2025. According to the latest data from the National Financial Regulatory Administration, as of July 18, insurance companies had closed 2,153 branch offices during the year.

In this wave of closures, marketing service departments became the hardest hit, accounting for the highest proportion. Geographically, most closed offices were concentrated in county-level areas and third- and fourth-tier cities.

China Life alone closed 490 business locations, Ping An Insurance (Group) Company Of China, Ltd.'s life insurance and pension subsidiaries closed 108 locations, and Pacific Insurance closed 76 locations. Taikang Life's closure count for the year has already exceeded last year's total, with a reduction rate exceeding 11%.

The contraction in the number of insurance industry institutions is not new.

Data shows that from 2020 to 2024, the number of insurance companies and branch offices closed annually were 980, 2,196, 3,020, 2,065, and 2,012 respectively. The data for the first eight months of 2025 has already exceeded the full-year 2024 figure, with a total exceeding 10,000 locations, demonstrating the urgency of industry adjustment.

Behind this trend is the insurance industry's proactive choice under multiple pressures including digital transformation, cost control, and changing market demands.

**Four Key Factors Driving Location Retreats**

Professor Zhu Junsheng, a postdoctoral researcher in Applied Economics at Peking University, believes there are four main reasons for insurance companies' concentrated closure of branch offices.

First, intensified cost pressures. High rental, labor, and operational costs, especially in third- and fourth-tier cities, result in low input-output ratios where expenses cannot be covered by premium income. Generally, traditional insurance company locations have annual costs exceeding one million yuan.

Second, regulatory standardization and guidance. In recent years, regulatory authorities have strengthened "institutional cleanup and rectification," requiring the elimination of "shell institutions," "ineffective locations," and "nominal branches."

Third, sales transformation and upgrading. Agent system reforms combined with the failure of the "human wave tactics" model have led to difficulties in offline recruitment, team attrition, and declining business development functions of locations.

Fourth, digital substitution effects. Customer habits are rapidly migrating online, with self-service insurance purchasing, online customer service, and remote underwriting becoming the norm. The online insurance purchase rate reached 78% in 2024, with video claims processing and AI underwriting technologies reducing dependence on offline services.

**From Human Wave Tactics to Quality and Efficiency Improvement**

The insurance industry is undergoing a deep transformation from scale expansion to "quality and efficiency improvement."

Agent workforce continues to contract. Listed insurers' agent numbers peaked in 2019 and have been gradually shrinking since. As of the end of 2024, five listed insurers had a combined 1.381 million agents, down 3.7% from the beginning of the year. Industry statistics show that the total number of insurance agents nationwide has fallen below 3 million.

The latest semi-annual report from Ping An Insurance (Group) Company Of China, Ltd. shows that by June this year, the number of agents was 340,000, a decrease of 23,000 from the end of last year.

Individual insurance channel proportion declining. Taking ABCI Life as an example, as of the end of 2024, the company's individual insurance channel agent count decreased by 19.93% year-over-year to 8,554 people, with individual insurance channel premium income accounting for 13.04%, further dropping to a historic low of 8.66% at the end of the first quarter of 2025.

Bancassurance channel importance rising. ABCI Life's bancassurance business premium contribution remained above 80%. As of the end of 2024, the company had 16,587 contracted bancassurance channel outlets and 8,385 effective outlets, all Agricultural Bank of China branches.

Guo Xiaotao, Co-CEO of Ping An Insurance (Group) Company Of China, Ltd., stated at the mid-year results announcement that the company has achieved a transformation breakthrough in multi-channel strategy: "Previously, our life insurance only had agent channels, but now we have formed a multi-channel system including agents, bancassurance, and community finance." Performance data shows that the new business value (NBEV) proportion from non-agent channels has exceeded 36%, up 15 percentage points from last year, with "bancassurance channels and community grid channels both achieving over 160% growth."

**Reshaping the Insurance Industry Ecosystem**

Although the convenience of online channels is reshaping the insurance industry ecosystem, the significance of offline locations has not been completely negated.

Branch offices serve as important touchpoints for insurance companies to reach customers, undertaking key functions such as consultation and answers, claims assistance, and relationship maintenance. Insurance products often have complexity and personalized needs, especially long-term protection products like life insurance, where customers need face-to-face professional guidance and consultation services when purchasing.

Insurance companies of different scales are adopting differentiated strategies. Leading companies are promoting "large-scale" business areas, upgrading them to high-end experience centers; small and medium companies focus on asset-light operations, leveraging third-party channels or regional specialty businesses.

In the future, offline locations will increasingly transform into experience centers and service centers, complementing online channels to jointly build a comprehensive customer service network.