Insurance companies’ “downsizing” to improve quality is steadily progressing; in the first half of the year, net exits of branch institutions totaled 2,311.

By Leng Cuihua, a reporter

The structural “slimming” quality-up improvement work for insurance company branches has been continuously advancing. According to statistics compiled by a Securities Daily reporter based on publicly disclosed data from the National Financial Regulatory Administration (hereinafter referred to as the “Financial Regulatory Administration”) regarding financial licenses, in the first half of 2026, a total of 2,332 insurance-entity companies’ branch organizations exited the market, while only 21 newly approved branches were established in the same period. The net number of exits reached 2,311, and the intensity of streamlining has remained at a high level.

In the view of interviewees, the core reasons for insurance companies to shrink the number and scale of offline outlets are the growing need to reduce costs and improve efficiency in the insurance industry, the rapid acceleration of digital transformation, and the continued iteration of channel structures. Different from the past extensive, scale-driven expansion, insurance companies’ current adjustments have shifted to a more refined development model of “reducing quantity to enhance quality and optimizing layout.” It is expected that the trend of structural adjustments such as branch撤销 (revocation), merger, and optimization will continue going forward.

Offline outlet dependency keeps falling

Establishing and撤销 branches dynamically based on operating conditions is a standard move for the insurance industry to optimize its outlet layout. From the perspective of long-term industry trends, since 2021, domestic insurance-entity companies’ branches have shown a net exit trend for several consecutive years.

In the first half of 2026, 2,332 insurance company branches exited the market, reflecting the industry accelerating its departure from the traditional development path of “a large workforce and widespread outlets.”

Zhou Jin, a partner at Tianzhi International Financial Industry Consulting, told a Securities Daily reporter that the industry’s digital transformation has been fully rolled out. Combined with the continued improvement in penetration rates in bancassurance channels, insurance companies’ reliance on offline physical branches continues to decline. On the one hand, digital services such as online underwriting, intelligent underwriting review, online claims, and remote customer service are becoming increasingly mature, enabling insurance companies to efficiently reach customers via online channels. On the other hand, mid-sized and small insurance companies generally face constraints on solvency capacity and issues such as market competition saturation in certain regions. The regulators’ guidance to “reduce quantity to enhance quality and operate compliantly” also makes insurance companies more cautious about establishing new branches. With multiple factors compounding, net exits of insurance company branches have become the norm.

In terms of the branch tiers exiting the market in the first half of the year, grassroots end-of-line outlets have been the main force clearing out. For example, there were 1,414 marketing service departments that exited the market, accounting for more than 60% of the total exits. A relevant person in charge of a life insurance company said that marketing service departments are grassroots outlets, with core functions concentrated in areas such as agent management, collecting offline documents, and providing basic customer services. In recent years, the insurance industry’s agent team has continued to undergo structural contraction, with the scale of grassroots development teams in county and township areas significantly reduced, leading to a persistent decline in the essential demand for grassroots outlets. By overall accounting for outlet operating costs versus business output and proactively shutting down inefficient, hollowed-out grassroots marketing service departments, insurance companies have taken an important step to reduce costs and improve efficiency and optimize resource allocation.

Exit structure diverges

By institution type, among the branches that exited in the first half of the year, there were 968 life insurance company branches and 1,454 property and casualty (P&C) insurance company branches. Superficially, the number of P&C institutions exiting is higher than that of life insurance. However, after excluding special factors, life insurance companies remain the core mainstream force behind the industry’s conventional institutional exits.

Specifically, among the 1,454 P&C insurance company branches that exited in the first half of the year, 1,253 belonged to the former Tianan Property Insurance. Public information shows that in 2024, the Financial Regulatory Administration approved Shen Neng Insurance to take over Tianan Property Insurance’s insurance business, and Tianan Property Insurance fully terminated its insurance business operations. In the first half of 2026, Tianan Property Insurance’s existing branches exited the market in a concentrated manner, which is a special case and not an industry-wide contraction. After excluding this factor, the number of P&C insurance company branches exiting in the first half was 201.

In contrast, exits of institutions from life insurance companies are more broadly representative and common across the industry. Zhou Jin believes that channel-structure iteration is an important reason. Traditional individual agent channels rely heavily on offline outlets for support, and this channel has continued to shrink in recent years. Meanwhile, bancassurance channels with lower outlet dependence have been increasing their share continuously and have become a core incremental channel for life insurance companies. Changes in channel structure have pushed life insurance companies to continue compressing inefficient offline outlets, focusing on core regions and high-quality scenarios, thereby continuously reducing costs and improving efficiency.

Don’t withdraw services when withdrawing outlets

Interviewees generally believe that the “slimming” of the number of insurance-industry branches is a structural upgrade in the development model. It is expected that the trend of outlet reductions, optimization, and upgrades will continue in the future.

Zhou Jin said that as high-quality development in the financial industry is further advanced, the insurance industry has gradually moved away from the extensive development model of “opening outlets broadly and stacking manpower.” Digitalization, intelligent operations, and intensive/centralized management have become the industry’s mainstream trends. With the widespread adoption of financial technology, insurance companies’ costs for digital operations have been greatly reduced, while the intelligent level of areas such as customer service, risk review, and business operations continues to improve. Therefore, it is expected that the trend of simplifying insurance company branches will persist.

Longge, deputy director of the Innovation and Risk Management Research Center at University of International Business and Economics, believes that in the future insurance companies will continue to promote structural optimization and make precise trade-offs: continuously撤并 (merge and dissolve) inefficient and hollowed-out outlets, while retaining and upgrading comprehensive service centers in core cities and industrial concentrated areas to focus on high-value customers and complex business scenarios.

Some interviewees said that when insurance companies撤销 branches, they should achieve “withdraw outlets without withdrawing services, and slim down without reducing quality and efficiency.” Currently, standardized insurance business has been fully realized through online processing, and basic services such as applying for insurance and small-amount claims can be efficiently completed via online procedures. For offline essential scenarios such as in-person signature for large-value long-term policies, on-site inspections for agricultural insurance, and age-appropriate services for elderly groups, insurance companies still need to retain offline service capabilities. Under regulatory requirements, when insurance companies撤销 branches, they must strictly comply with the《Measures for Market Access Administration of Insurance Company Branches》. If a branch is撤销ed, it shall issue an announcement and notify relevant policyholders, insured persons, or beneficiaries to make proper arrangements regarding matters such as paying insurance premiums and receiving insurance benefits.

(Editor: Qian Xiaorui)

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