Core Insights - The insurance industry in China is accelerating the closure of branch offices, with 2,436 branches having exited the market in 2023 alone, compared to 2,012 in 2024, indicating a significant trend towards downsizing [1][2][6] Summary by Sections Branch Closures - Major insurance companies are focusing on reducing their branch networks, particularly in lower-tier cities and rural areas, as part of a strategy to enhance efficiency and reduce costs [2][3] - China Life Insurance has closed 582 branches this year, with 569 being marketing service departments, reflecting an increased pace of downsizing compared to previous years [2][4] - China Pacific Insurance and China Property & Casualty Insurance have also made significant cuts, with 89 and 298 branch closures respectively [4][5] New Branch Openings - Despite the closures, insurance companies have opened a total of 268 new branches this year, with China Ping An leading with 32 new branches [5][6] - The new branches primarily consist of marketing service departments, indicating a shift in focus rather than a complete withdrawal from the market [5] Long-term Trends - Since 2021, the insurance sector has seen over 10,000 branch closures, with the peak occurring in 2022, likely influenced by regulatory requirements and the need for operational efficiency [6][7] - The shift towards digitalization has led to an increase in online insurance purchases, with online purchase rates rising from 73% in 2023 to 78% in 2024, further reducing reliance on physical branches [6][7] Strategic Adjustments - Companies are adjusting their branch strategies to focus on core customer groups and optimize their networks, particularly in response to declining consumer spending in lower-tier cities [3][6] - The role of physical branches is evolving, with a potential shift towards providing comprehensive services such as wealth management and elder care, rather than just sales [7][8]

Core Insights - The core value of offline insurance branches is being restructured as companies adapt to changing market dynamics and regulatory requirements [1][4] Group 1: Branch Network Restructuring - As of June 3, 2023, a total of 1,037 insurance branches were closed nationwide, marking a year-on-year increase of over 20%, with personal insurance companies accounting for 80% of the closures [1] - The trend of branch closures began in 2020, peaking in 2022 with 3,020 closures, followed by 2,065 in 2023 and 2,012 in 2024, totaling over 10,000 closures in five years [2] - The closures are primarily concentrated in county-level areas and some third and fourth-tier cities, focusing on branch offices and marketing service departments [2] Group 2: Digital Transformation and Consumer Behavior - The online insurance purchase rate is projected to rise from 73% in 2023 to 78% in 2024, while offline purchases are expected to decline from 85% to 79% [3] - The number of personal insurance agents has decreased from a peak of 9 million in 2019 to less than 3 million in 2024, leading to a diminished role for branches that primarily served agents [3] Group 3: Regulatory and Strategic Factors - The closure of branches aligns with regulatory demands for cleaning up inefficient institutions, as outlined in the 2021 guidelines from the former China Banking and Insurance Regulatory Commission [4] - Policies such as the comprehensive reform of auto insurance and the implementation of "reporting and operation integration" have pressured insurance companies to prioritize efficiency and adjust their branch layouts [4] Group 4: Evolving Role of Offline Branches - Despite the trend of closures, some insurance companies are still opening new branches, with 161 new branches established in the first five months of the year [7] - The role of offline branches is shifting towards providing comprehensive services such as wealth management, health management, and community financial services, rather than just sales [8]