China tax move hits Hong Kong insurers as AIA drops 8.2%
What's new: A reported 20% tax on offshore policy returns raised fears mainland buyers will pull back from Hong Kong products.
Hong Kong-listed insurers fell sharply Thursday after a Caixin report said mainland Chinese tax authorities had begun collecting a 20% personal income tax on returns from offshore insurance policies. AIA shares sank 8.2%, Prudential lost more than 5% and FWD Group fell 4.5%, helping drag the Hang Seng Index down more than 2% in early trading. The reported tax applies in Beijing and Hangzhou to income from Hong Kong policies, including dividend payouts and interest on prepaid premiums. Investors fear the move will make offshore insurance less attractive to mainland buyers, a key customer base for Hong Kong insurers, banks and wealth managers already facing broader scrutiny of offshore assets.