The insurance industry is undergoing a significant transformation driven by bank-insurance channel dynamics. Recent performance reports from listed insurers for 2025 reveal outstanding results, with executives frequently highlighting bank-insurance distribution as a key growth driver.
Major insurers demonstrated remarkable bank-insurance channel growth in 2025. Ping An Insurance achieved 715 billion yuan in bank-insurance premiums with new policy premiums surging 92.25%. The channel's contribution exceeded 60% of new premiums for some insurers. In contrast, over 20 small and medium-sized life insurers reported insurance business revenue growth below 5%, with some experiencing negative growth.
This industry reshuffle follows regulatory implementation of "filing-compliance alignment" that strictly standardizes sales channel costs. Large insurers have elevated bank-insurance channels to strategic importance, leveraging comprehensive advantages, while smaller companies face severe survival challenges after high commission rebates became ineffective.
The regulatory evolution continued with a March 2026 notice strengthening bank agency channel fee management, requiring detailed disclosure of commissions, employee incentives, and service fees. This represents an extension of August 2023 policies ensuring insurers' actual operations match filed documentation.
Previously, bank-insurance channels served as fertile ground for smaller insurers' rapid expansion through high commissions and short-term, high-yield products. However, post-regulation average commissions dropped 30% industry-wide, shifting competitive advantage to large insurers with nationwide networks and substantial agent teams.
A provincial branch manager from a mid-sized insurer revealed their bank-insurance ranking dropped from first to third in southwestern regions as major players intensified efforts. For smaller insurers dependent on new business cash flow, this scale reduction directly impacts liquidity.
Bank-insurance channels have transformed from previously neglected segments to battlegrounds for insurance giants. The May 2024 removal of commercial bank branch cooperation limits (previously capped at three insurers per branch annually) coincided with declining individual agent channels, prompting major insurers to reemphasize bank distribution.
As interest rates decline, maturing deposits seek reinvestment options, making insurance products on bank shelves attractive alternatives. Larger insurers with stronger brands and comprehensive services gain preferential customer selection.
Premium growth divergence intensified significantly. Industry data shows 75 life insurers' total new bank-insurance premiums reached 7568 billion yuan in 2024, with installment premiums declining 12% and single-premium products dropping 28%. Conversely, leading listed insurers reported new business value growth ranging from 62.7% to 516% in their bank-insurance channels.
The dominance continued through 2025, with seven major insurers collectively achieving nearly 8550 billion yuan in bank-insurance premiums. New premiums from this channel constituted 43.6% of total new premiums from both individual and bank channels. Despite high baseline growth, Ping An Insurance maintained 92.24% new premium growth in bank-insurance channels.
Network expansion highlights the scale advantage: one major insurer collaborates with over 100 banks, operating through 77,000 points of sale in 2025, while another partners with 56 banks, achieving over 20% workforce growth and 17% productivity improvement.
This represents a dimensional reduction competition against smaller insurers. The transition from simple distribution models to value competition emphasizing products and services favors large insurers, particularly amid declining premium rates. Larger companies' superior investment capabilities and asset management teams enable better dividend expectations for customers.
Market concentration intensifies, with seven listed life insurers capturing nearly 2.3 trillion yuan of the 4.36 trillion yuan total industry premiums in 2025. After excluding major bank-affiliated insurers, the remaining 50+ small and medium-sized insurers share less than 30% market share.
The profit gap appears more pronounced, with one major insurer's net profit exceeding 1500 billion yuan alone, while 57 non-listed insurers combined reported under 700 billion yuan in net profit.
Additional challenges emerge for smaller players: they cannot compete through high-yield products amid dynamic rate adjustments, face constraints in capital-intensive asset allocation, and carry high legacy policy costs from high-interest era expansion. Ongoing low government bond yields necessitate substantial reserve provisions, particularly straining smaller insurers' net assets and profitability.
Stricter solvency regulations effective in 2026, including a 35% cap on future policy surplus recognition, further pressure smaller insurers. Currently, 19 life insurers have delayed solvency report disclosures.
Historical parallels warrant caution. Japan's life insurance industry experienced bankruptcy waves during low-rate environments due to interest spread losses. Between 1997-2001, seven insurers collapsed, representing 10% of industry assets and one-third of domestic companies.
Domestically, several insurers have entered risk resolution processes in recent years, with participation shifting from insurance protection funds to major insurers and local state-owned capital.
Industry experts suggest that as more small and medium-sized insurers struggle to adapt, acquisition opportunities may emerge. Some professionals argue the market may not require numerous insurance companies, noting that mature markets like Europe and America evolved through consolidation waves toward highly concentrated structures.
Survival for smaller insurers may depend on developing specialized niches and distinctive competitive advantages in the evolving landscape.
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