PRU.LSE▼2impact 4
China begins taxing offshore insurance policies, AIA shares plunge 9%, Hang Seng drops 1.7%
Chinese authorities in some cities have started levying taxes on insurance policies purchased overseas by mainland Chinese residents, triggering a sharp sell-off in insurance and banking stocks in the Hong Kong market. The Hang Seng Index fell 1.7% in morning trading. AIA Group shares tumbled as much as 9.2%, their biggest drop since April 2025, while Prudential declined up to 6.5%. HSBC and Standard Chartered both fell more than 2%. Reports indicate that since 2025, some policyholders in Beijing who declared dividend income from participating policies bought in Hong Kong have been taxed 20% on the actual gains. Goldman Sachs analysts said that if such measures are expanded, new policy sales to mainland Chinese customers could decline significantly.