Cancel 60 licenses: Insurance intermediaries' "water content" squeezed out

Under the backdrop of ongoing strengthened regulation and high-quality development becoming the main theme, China’s insurance intermediary market is undergoing a systematic and profound ecological restructuring. The once wild and chaotic industry landscape is being completely reshaped. Recently, the Financial Regulatory Authority announced that from 2024 to 2025, a total of 3 insurance intermediary groups will be revoked or canceled, and 57 professional insurance intermediary legal entities will be deregistered; 3,730 branch offices of professional insurance intermediaries will be phased out, and 226 insurance agency licensees will be eliminated.

This marks an important milestone since the launch of the “Clear Out, Standardize, and Improve Quality” campaign in the insurance intermediary market in 2024. Amid the market’s “big wave of淘沙” (refining the wheat from the chaff), the transformation of small and medium-sized insurance intermediaries has become urgent. Industry insiders believe that as the campaign deepens, the exit and淘汰 of unqualified institutions are inevitable trends in industry development and market evolution.

Accelerating the Cleanup and Quality Improvement

In the past, the insurance intermediary industry long suffered from issues of “many, scattered, and chaotic” entities—many organizations had no actual business, no dedicated staff, and no fixed premises, relying solely on licensing to earn channel fees. Some even profited through false insurance applications, premium interception, off-book rebates, and other illegal means, severely disrupting market order.

Recently, the Financial Regulatory Authority stated that it will uphold strict regulation and supervision, and since 2024, has launched the campaign to clear out, standardize, and improve the quality of the insurance intermediary market. The authority will classify, step by step, and lawfully eliminate non-compliant and irregular insurance intermediaries, strictly investigate illegal activities, and revoke licenses of those severely disrupting market order. From 2024 to 2025, a total of 3 insurance intermediary groups will be revoked or canceled, 57 professional insurance intermediary legal entities will be deregistered; 3,730 branch offices of professional insurance intermediaries will be phased out, and 226 insurance agency licensees will be eliminated.

“This large-scale cleanup is the result of both regulatory rectification and market淘汰,” said Fu Yifu, a special researcher at the Shanghai Commercial Bank. He pointed out that the regulatory effort directly targets stubborn industry problems, focusing on clearing out “shell” organizations with no real operations and entities involved in false business, illegal sales, financial fraud, and fund misappropriation. By canceling corporate licenses and closing branches, the market ecology is being purified from the source. Meanwhile, the “reporting and operation integration” policy has been fully implemented, requiring insurance companies to pay commissions to intermediaries consistent with recorded fees, effectively closing the loophole of off-book rebates. The commission rates have been significantly reduced, causing small and medium-sized intermediaries relying on high rebates to see profits sharply decline or even incur losses.

Additionally, Beijing Business Daily learned that some institutions have long been detached from regulatory oversight, with weak informatization and compliance capabilities, unable to meet the demands of strict regulation and digital transformation. Ultimately, they are phased out due to operational difficulties or violations of compliance red lines.

New Value Positioning

While many small and medium-sized institutions are exiting the market, leading insurance brokers and agencies are expanding against the trend.

“Industry concentration is rapidly increasing, and the ‘Matthew Effect’ is becoming more evident,” said industry insiders. Leading organizations leverage capital strength, compliance systems, digital capabilities, and deep integration with insurance companies to achieve scaled profitability even in an era of low commissions. For example, some large brokers have transformed into “comprehensive risk management service providers,” offering one-stop solutions from risk identification and product customization to claims coordination for corporate clients, far surpassing traditional “policy-selling” roles. Conversely, small and medium-sized institutions lacking professional skills, informatization, and compliance awareness struggle to survive under regulatory pressure and market squeeze.

In response to these industry changes, the Financial Regulatory Authority has clarified that the next steps will focus on risk prevention, strengthened regulation, and promoting high-quality development. It will solidify insurance intermediary supervision, improve regulatory systems, continue to deepen the cleanup and quality enhancement efforts, optimize market structure, and encourage insurance intermediaries to strengthen professional skills and informatization. The reform of insurance agency兼业 (multi-licensed) operations will be deepened, supporting high-quality development of insurance intermediaries and improving the quality and efficiency of financial services.

After the reshuffle, how will the survivors truly “become kings”? Fu Yifu stated that building core competitiveness involves: first, establishing a solid compliance bottom line and a full-process risk control system to ensure lawful operations and business development; second, enhancing professional capabilities, focusing on niche areas, providing customized risk solutions and claims services to build customer trust; third, accelerating digital transformation by using technology to optimize customer acquisition, underwriting, and claims processes, reducing costs and increasing efficiency; fourth, deepening cooperation with insurance companies, integrating product and channel resources, and building differentiated service barriers to upgrade from mere sales intermediaries to comprehensive risk management service providers.

Beijing Business Daily Reporter Li Xiumei

(Edited by: Qian Xiaorui)

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