Disgraced Chinese insurance magnate Wu Xiaohui was sentenced to 18 years in prison on Thursday after being convicted of fraud and abuse of power connected with the meteoric rise of the company he founded, Anbang Insurance Group Co.

The penalties handed down by Shanghai No. 1 Intermediate People’s Court, which included a confiscation of 10.5 billion yuan ($1.65 billion) in assets, followed a one-day trial of Mr. Wu in late March. The 18-year jail term combines a 15 year sentence for fraud—including illegal fundraising—and 10...