Fanhua Inc.

Climate Impact & Sustainability Data (2020, 2021, 2022)

Competition for sales personnel and claims adjustors from insurance companies and other insurance intermediaries.
Unsuccessful digitalization initiatives.
Failure to attract and retain productive agents, especially entrepreneurial agents, and qualified claims adjustors.
Changes in regulatory environment.
Health epidemics (COVID-19).
Potential liability, loss of customers and damage to reputation for failure to protect confidential customer information.
Insurance company partner concentration risks.
Inability to respond to rapid technological change.
PRC government's view on the structure for operating part of the China business not complying with applicable PRC laws and regulations.
PRC regulation of loans and direct investment by offshore holding companies to PRC entities.
Adverse economic, political and legal developments in China.

Restructuring of the company to obtain direct controlling or significant equity ownership in each of its insurance intermediary companies and online platforms.
Digitalization initiative to utilize digital technologies such as artificial intelligence and big data.
Active recruitment of entrepreneurial agents.
Adapting services to regulatory changes in China.
Resuming normal business activities after COVID-19 outbreak.
Proactive measures to protect against cybersecurity risks.
Diversification of insurance company partners.
Investing in digital capabilities and developing online insurance platforms.

Launched online mutual aid platform eHuzhu, assisting 8,829 families to raise over RMB1.1 billion funds.

Supply chain disruptions due to COVID-19 outbreak and related government restrictions.
Regulatory changes in the online insurance distribution sector.
Intense competition in the insurance intermediary industry.
Risks related to the VIE structure and potential non-compliance with PRC laws and regulations.
Potential conflicts of interest with the individual shareholder of Xinbao Investment.
Risks related to PCAOB inspections and potential delisting from Nasdaq.

Restructuring to re-establish the VIE structure for online insurance business.
Adapting services to regulatory changes.
Investing in digital capabilities and developing online platforms.
Implementing internal policies and procedures to deter salesperson or employee misconduct.
Seeking to professionalize sales force and recruit more productive agents.

Launched eHuzhu, an online mutual aid platform, assisting 11,862 families to raise over RMB1.3 billion funds.

Impact of COVID-19 pandemic on sales activities and consumer confidence.
Intense competition for productive sales agents.
Rapid technological change in the insurance intermediary industry.
Evolving regulatory environment in China.
Uncertainties in the PRC legal system and enforcement of laws and regulations.
Risks related to our VIE structure and contractual arrangements with Xinbao Investment and Fanhua RONS Technologies.
Potential conflicts of interest between shareholders and officers.
Scrutiny by PRC tax authorities on contractual arrangements with VIEs.
Restrictions on foreign exchange and transfer of cash.
Potential for securities class action litigation.

Established a comprehensive internal control and risk management structure.
Implemented a compliance accountability policy.
Developed digital toolkits to enhance agent and customer engagement (Lan Zhanggui, RONS DOP, Fanhua RONS Guanjia).
Restructured online operations to comply with regulations.
Entered into contractual arrangements to control and receive economic benefits from VIEs.
Obtained legal opinions confirming compliance with PRC laws and regulations.
Actively recruiting and retaining productive sales agents, especially entrepreneurial agents.