The insurance sector is undergoing a significant contraction, with nearly 1,000 company branches shuttered in 2025 alone. Recent regulatory filings reveal that multiple insurers—including Everbright Yongming Life, Ping An Pension, Taikang Life, and PICC Property & Casualty—have shuttered offices across cities like Xianyang, Sanya, and Luoding. This trend reflects a broader industry retreat from physical locations, as digital channels reshape customer interactions.
Data from the Financial Regulatory Authority shows 946 branch closures this year, dwarfing the 163 new openings. The decline marks a continuation of a five-year downsizing trend, peaking in 2022 with 2,966 closures. While numbers dipped slightly in 2023–2024, 2025’s rapid pace suggests enduring structural change. Life insurers account for 80% of recent closures, with Taikang Life alone shuttering 178 outlets, citing “optimization” in lower-tier cities where market capacity has dwindled.
Digital Disruption and Cost Pressures Drive Consolidation
Industry analysts attribute the retreat to four factors: shrinking regional markets, rising operational costs, fierce competition, and the rise of digital platforms. Yang Fan of Beijing Paipai Network Insurance noted that inefficient branches are being pruned as insurers reallocate resources to bolster competitiveness. Foreign insurers like Starr Property & Casualty have also trimmed footprints, retaining only six provincial branches while partnering with local firms to leverage their networks.
The shift aligns with surging online adoption. A 2024 consumer report found 78% of policies are now purchased digitally, nearing parity with offline sales (79%). AI tools for personalized recommendations and claims processing have further reduced reliance on physical offices. “Just as mobile banking replaced branches, insurers are pivoting to digital-first models,” said Zhu Junsheng of Peking University’s Insurance Research Center.
Offline Outlets to Evolve, Not Disappear
Despite the downturn, experts argue physical branches retain unique value. “Complex products like life insurance still require face-to-face trust-building,” said Pangoal Institution’s Yu Fenghui. Offices are rebranding as service hubs, complementing online platforms rather than competing with them. Taikang’s statement echoed this, emphasizing “strategic focus on core customers” over blanket closures.
As insurers balance cost-cutting with customer needs, the sector’s future likely hinges on hybrid models. “The winners will integrate digital efficiency with human expertise,” Yu added. With regulators closely tracking the shakeout, the industry’s “slimming” phase may soon stabilize—but its physical footprint will never look the same.
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