A minor mistake by the China Insurance Regulatory Commission (
CIRC) caused the stock price of ZhongAn Online Property & Casualty Insurance to fall.
Last week, the CIRC’s Hainan bureau had posted an article on its website, which warned the public of risks in ZhongAn’s business model due to the online insurer allowing other insurance agencies to use its website to sell products, causing confusion between online and offline insurance business. The article was taken down within the day but it had already done its damage.
Investors in ZhongAn, which had just recently undertaken an IPO, were unnerved, causing the firm’s stock price to fall by up to 7%.
“The stock plunge today was mainly triggered by the regulatory notice from CIRC Hainan Bureau,” Louis Wong Wai Kit, director for Phillip Securities and Phillip Capital Management, told the
South China Morning Post.
The bureau immediately retracted the article, and an official explained that it was merely an opinion piece and not an official regulatory notice, as some people were led to believe due to the nature of its posting.
After the CIRC came out with its explanation for the issue, ZhongAn’s share prices began to show signs of recovery, gaining 2.9% on the Hong Kong Stock Exchange on Friday, reported
SCMP.
Related stories:
Chinese Goverment to have a say in insurance joint ventures
CIRC lifts ban on Anbang’s sales of high-yield products
CIRC blows whistle on erring insurance companies
