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 previously 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 insurance intermediaries and 226 licensed agencies will be phased out.

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” (sorting out 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 is a trend of industry development and market evolution.

Accelerating the Clear Out 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, will carry out the “Clear Out, Standardize, and Improve Quality” action in the insurance intermediary market. The goal is to classify, step-by-step, eliminate non-compliant and irregular insurance intermediaries according to laws and regulations, and to strictly investigate illegal activities. For entities severely disrupting market order, business licenses will be revoked. 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 and 226 licensed agencies will be phased out.

“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 campaign targets stubborn industry issues, 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 legal 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 that match the recorded fees, effectively closing the loophole of off-book rebates. The commission rates have been significantly reduced, causing profits for small and medium-sized intermediaries relying on high rebates to plummet or even lead to losses.

Additionally, Beijing Business Daily learned that some institutions have long been detached from regulatory oversight, with weak informatization and compliance capabilities, making it difficult to adapt to 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, 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 beyond traditional “policy selling.” 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. They will solidify insurance intermediary supervision, improve regulatory systems, continue to deepen the “Clear Out, Standardize, and Improve Quality” campaign, optimize market structure, and encourage insurance intermediaries to enhance professional skills and informatization. The reform of insurance agency licensing will be deepened, and efforts will be made to promote high-quality development of insurance intermediaries, helping to improve 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, strengthening professional capabilities, focusing on niche areas, providing customized risk solutions and claims services to enhance 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, building differentiated service barriers, and upgrading from a sales intermediary to a comprehensive risk management service provider.

Beijing Business Daily Reporter Li Xiumei

(Edited by: Qian Xiaorui)

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