Multiple Onlookers but No Bidders Yet! Three Insurance Broker Equities to Be Auctioned: Some Targets Have Abnormal Operations and Long-Term Business Suspension

Why Are Insurance Intermediary Equity Auctions Falling Out of Favor?

By Yuan Yuan, Daily Economic News Reporter | Edited by Wei Wenyu

On March 18, the Daily Economic News reporter (hereinafter “the reporter”) learned from Alibaba Asset Platform that recently, the equity of three insurance intermediaries will be judicially auctioned: Shenzhen Sheng’an Insurance Brokerage Co., Ltd. (“Sheng’an Insurance Brokerage”), Baocheng Insurance Sales Co., Ltd. (“Baocheng Insurance Sales”), and Guizhou Zhongyang Insurance Agency Co., Ltd. (“Zhongyang Insurance Agency”).

From the current listing situation, there are many onlookers, but no bidders yet. The reporter noted that compared to the highly capitalized scene of a few years ago, the past two years have seen frequent failed auctions of insurance intermediary equity, indicating a cooling market interest in these assets.

Industry insiders analyze that the profitability model of the insurance intermediary industry is currently facing challenges. The “integrated licensing” policy has squeezed fee margins, auto insurance reforms have further lowered commission rates, and traditional “channel-based” intermediaries’ profit margins have significantly narrowed. Simply holding licenses no longer guarantees liquidity, and licenses lacking actual business operations and digital capabilities are gradually becoming “negative assets.”

Three Insurance Intermediary Equity Auctions with Abnormal or Long-Idle Operations

Public information shows that the equity stakes to be auctioned differ among the three companies. Sheng’an Insurance Brokerage’s auction involves 10% of its equity with a starting price of 3.0336 million yuan; Baocheng Insurance Sales’s auction involves 100% of its equity with a starting price of 6.3777 million yuan; Zhongyang Insurance Agency’s auction involves 90% of its equity with a starting price of 3.072 million yuan.

Source: Alibaba Asset Platform

These three auctions are scheduled for March 19, March 28, and March 30, respectively. Since insurance intermediary licenses are a type of financial license, the auction announcement reminds bidders to confirm they meet relevant qualification requirements before participating. It is recommended to consult local administrative authorities for specific policies beforehand. If the transaction cannot be completed due to the buyer’s lack of qualification, legal consequences such as auction regret will be borne accordingly.

Source: Alibaba Asset Platform

The asset descriptions reveal that some insurance intermediary equity stakes have certain flaws. For example, Zhongyang Insurance Agency has been listed as operating abnormally; its insurance intermediary license was issued on June 28, 2022, but due to long-term inactivity, the license’s validity and usability cannot be guaranteed. Sheng’an Insurance Brokerage requires bidders to pay a prepayment equal to the full auction price upon registration to qualify. If the final price exceeds the prepayment, the excess must be paid into a court-designated account within the specified time.

Source: Alibaba Asset Platform

The reporter noted that as of 7 p.m. on March 18, the viewership of the auction pages for these three insurance intermediary stakes exceeded 100 people each, but no one has registered yet. In fact, since 2021, multiple insurance intermediary equity auctions on Alibaba Asset Platform have failed to attract bidders. For example, in 2023, 70% of Rongchao Insurance Brokerage’s equity was auctioned with measures like second auctions and price reductions, but still drew no interest; in 2024, the 100% stake in Guangzhou Huixin Insurance Agency held by Meichen Insurance Brokerage also failed to sell.

Why has the once highly capitalized insurance intermediary license market cooled down?

“The core reason for the cooling of capital enthusiasm is that the industry’s development logic has shifted from ‘land grabbing’ to ‘quality improvement and efficiency enhancement,’” said Yuan Shuai, Deputy Director of Investment at the China Urban Development Research Institute. On one hand, regulatory policy changes have reshaped market expectations. The new “National Ten Rules” for the insurance industry strengthen regulatory guidance, promoting a shift from scale expansion to high-quality development, significantly raising thresholds for equity transactions and compliance costs, and entering a period of industry valuation restructuring. On the other hand, the scarcity of licenses is decreasing. With the proliferation of internet insurance, the advantages of small and medium intermediaries in attracting traffic and providing services are gradually weakening. Coupled with poor operational performance of some institutions and the fact that many shareholders’ equity is pledged or frozen, investor concerns about potential operational risks are increasing.

The Insurance Intermediary Market Will Move Toward “Specialization, Digitalization, and Compliance”

As a vital part of China’s insurance market, insurance intermediaries play a key role in insurance transactions. However, in recent years, under the background of “integrated licensing” and regulatory efforts to “clarify and improve,” the industry has entered a painful development phase.

Gao Chengyuan, President of the Vision Impact Research Institute, believes that the current market shows an intensified “Matthew Effect,” with polarization. Leading insurance companies leverage scale, technological investment, and ecosystem resources to accelerate integration, while small and medium intermediaries face survival difficulties. The industry’s pain points include severe homogenization—most small and medium agencies still rely on traditional commission models and lack differentiated services. Under the dual pressures of regulatory “clarify and improve” and market competition, “shell” agencies are being rapidly phased out. In terms of cross-industry agencies, banks, car dealers, and other channels hold traffic advantages but also face revenue declines due to rate reforms. Overall, the market is transitioning from “quantity expansion” to “quality differentiation.”

From the demand side, the insurance intermediary market still has growth potential. Zhi Yuanpei, Vice President of the Professional Investment Committee of the China Investment Association’s listed company investment branch, states that the long-term driving forces are twofold: first, the increase in insurance density and penetration rate. As residents’ wealth grows and risk awareness increases, demand for pension and health insurance products continues to rise, along with a growing need for professional consulting and customized services; second, the increasing complexity of insurance products generates demand for professional services. Products like annuities and increasing benefit whole life insurance have more complex clauses, leading consumers to seek intermediary expertise in interpretation and claims assistance.

“Long-term, the insurance intermediary market will develop toward ‘specialization, digitalization, and compliance,’” Yuan Shuai said. Under ongoing strict regulatory policies, non-compliant small and medium agencies will gradually be eliminated, with market share concentrating among compliant, service-oriented institutions. Core competitiveness will shift from “customer acquisition” to “service,” with professional risk management and customized product design becoming fundamental. Digital transformation will accelerate, leveraging big data, AI, and other technologies to improve service efficiency, reduce operational costs, and enable precise customer acquisition and personalized services. Additionally, cross-sector integration will continue, with future emergence of comprehensive intermediary platforms combining health management, elder care, wealth management, and other fields—breaking traditional insurance sales boundaries and providing clients with full lifecycle financial services.

Wen Xi, Vice Chairman of the China Enterprise Capital Alliance, pointed out that the insurance intermediary industry is undergoing a painful transition from “rough expansion” to “quality and efficiency improvement,” and capital’s attitude toward licenses is shifting from “speculative pursuit” back to “rational allocation.” This is both a natural result of strengthened regulation and a sign of the industry’s maturing process.

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Daily Economic News