Cancel 60 licenses! Draining the "water" from insurance intermediaries, how will the "survivors" become kings

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 deep ecological restructuring. The industry landscape, once characterized by wild growth and chaos, is being thoroughly reshaped. On February 27, the China Banking and Insurance Regulatory Commission announced that from 2024 to 2025, a total of 3 insurance intermediary groups have been revoked or canceled, and 57 professional insurance intermediary legal entities have been disciplined; 3,730 branches of insurance professional intermediaries and 226 insurance agency licensees have been phased out.

This marks an important milestone since the launch of the “Clear, Standardize, and Improve Quality” campaign in the insurance intermediary market in 2024. Amid the market’s “big wave of淘沙” (refining the good from the bad), the transformation of small and medium-sized insurance intermediaries is 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, Standardize, and Improve Quality” campaign

In the past, the insurance intermediary industry long suffered from issues of “many, scattered, chaotic” — numerous institutions with 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.

On February 27, the China Banking and Insurance Regulatory Commission issued a statement that it will uphold strict regulation and supervision, and starting in 2024, will carry out the “Clear, Standardize, and Improve Quality” action in the insurance intermediary market. The agency will classify, step-by-step, eliminate insurance intermediaries that do not meet regulatory requirements or operate abnormally, strictly investigate illegal activities, and revoke licenses of institutions that severely disrupt market order. From 2024 to 2025, a total of 3 insurance intermediary groups have been revoked or canceled, 57 professional insurance intermediary legal entities have been disciplined; 3,730 branches of insurance professional intermediaries and 226 insurance agency licensees have been phased out.

“This large-scale cleanup is a dual result of regulatory rectification and market淘汰,” said Fu Yifu, a special researcher at the Shanghai Commercial Bank. He pointed out that the regulatory effort directly targets industry stubborn problems, 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 regulation, with weak information systems and compliance capabilities, unable to meet the demands of strict regulation and digital transformation, ultimately being 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 institutions 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 for enterprise clients, from risk identification and product customization to claims coordination, far beyond traditional “policy selling” roles. Conversely, small and medium-sized institutions lacking professional skills, information technology, and compliance awareness struggle to survive under regulatory pressure and market squeeze.

In response to these industry changes, the China Banking and Insurance Regulatory Commission has clarified its next steps, focusing on risk prevention, strengthened regulation, and promoting high-quality development. It will solidify insurance intermediary supervision, improve regulatory systems, continue to promote the “Clear, Standardize, and Improve Quality” campaign, optimize market structure, enhance the professional and informational capabilities of insurance intermediaries, deepen reforms in insurance agency licensing, and promote high-quality development of insurance intermediaries to improve financial service quality and efficiency.

After the reshuffle, how can survivors truly “be king”? 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 build 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, and building differentiated service barriers to upgrade from sales intermediaries to comprehensive risk management service providers.

Beijing Business Daily reporter Li Xiumei

(Edited by: Wen Jing)

Keywords: Insurance