An average of 5.5 branches are closed per day, as the insurance industry undergoes a major "sales transformation" this year

The speed of the insurance industry shifting towards "high-quality sales" is accelerating.

According to media reports, in just the first half of July, the National Financial Regulatory Administration approved the cancellation applications of 61 insurance branches, including 45 marketing service departments, 15 branch offices, and 1 telemarketing center.

This involves 15 insurance institutions, including Dongfang Jiafu Life, Guofu Life, Dajia Property Insurance, Hezhong Life, Nongyin Life, Xingfu Life, and Sunshine Life.

As of July 15, more than 1,000 insurance branch adjustments and cancellations have been approved domestically this year. Meanwhile, major institutions are still strengthening their online sales efforts.

A transformation of sales channels across the entire insurance industry is underway.

Insurance Branches Undergoing Continuous Adjustment

Based on a conservative estimate of 1,000 branches and accounting for a total of 181 days in the first half of the year, mainland insurance branches are decreasing at an average rate of 5.52 per day, which has become a clear "footnote" to the industry's ongoing transformation in recent years.

In terms of numbers, leading insurance companies such as Taikang Life and China Life have made significant adjustments to their outlets, with Taikang Life canceling more than 200 branches this year; smaller insurance companies like Hezhong Life and Great Wall Life are also decisively adjusting their outlets.

Regionally, the canceled insurance branches are more related to third- and fourth-tier small cities and areas below the county level.

In terms of branch types, marketing service departments have become the main target of adjustments. The latter are institutions set up by insurance companies outside their headquarters to manage marketing personnel and provide services to customers.

In terms of the entities shrinking, life insurance companies are clearly making more significant adjustments to their branches. This may be related to the generally large broker teams that life insurance companies possess.

Overall, it is expected that by 2025, insurance institutions will make "significant" moves to cut branches.

Sales Model Transformation "Emerging"

So why are insurance companies making significant adjustments to their branch institutions?

Some insurance companies have responded that the urbanization process is driving a shift in consumption focus, coupled with limited capacity in lower-tier markets, making it necessary for insurance companies to adjust their branch layouts to improve efficiency.

At the same time, the rapid development of AI and the continuous increase in online insurance customers require insurance companies to continue investing in focused sales.

According to the "2024 China Internet Insurance Consumer Insight Report," the online insurance purchase rate has risen from 73% the previous year to 78% in 2024, while the offline purchase rate has dropped to 79%. The report predicts that within the next two years, the online insurance purchase rate is expected to surpass offline.

Some insurance analysts have also pointed out that with the online transformation of the insurance market and the concentration of eligible insurance buyers in first- and second-tier cities, it is becoming increasingly difficult for marketing service departments below the county level in non-coastal provinces to cover costs, facing pressure for mass adjustments.

"Breaking the Deadlock" is "In Progress"

In the face of challenges, insurance companies are seeking new sales models to better adapt to this changing era Some insurance companies have proposed a "refined cultivation" strategy: strengthening a number of key outlets by optimizing network layout, enhancing service radius, and adding functions beyond traditional sales and claims, while also adjusting the layout of some outlets.

In this process, many institutions have begun to add other displays at branch outlets. For example, China Ping An has set up over 90 "Ping An Housekeeper" elderly care exhibition halls. At the same time, more and more large insurance institutions are starting to get involved in elderly care projects, providing sales opportunities for the transformation of insurance outlets.

Additionally, the relaxation of channel restrictions on insurance sales by banks has provided new ideas for insurance companies. By collaborating with banks, insurance companies are attempting to achieve "efficient coverage" of third- and fourth-tier cities at a lower cost.

Of course, what remains more important is how insurance institutions can build a cost-effective, professionally adequate, and cross-selling capable outlet layout in the new sales era, targeting a younger customer base.

This is a topic that all insurance institutions need to respond to seriously.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk