China United Insurance Service Reports Revenue Increase of 29.6% and 2020 Financial Results

Quoted on OTCQB since March 22, 2021

China, Hong Kong and Taiwan, March 29, 2021 (GLOBE NEWSWIRE) — via NewMediaWire – China United Insurance Service, Inc. (“CUIS”) (OTCQB: CUII), a leading Asian insurance intermediary company with operations in the People’s Republic of China, Hong Kong, and Taiwan, reported consolidated results for the twelve months ended December 31, 2020, on March 25, 2021.

Mr. Yi-Hsiao Mao, Chairman and CEO of CUIS, commented, “China United had a good year in 2020, with a nearly 30% increase in revenue and a 21% increase in comprehensive income attributable to CUIS’ shareholders. We accomplished these results against the backdrop of the COVID-19 pandemic which especially impacted our results in China. Our operations in China now account for just over 5% of our revenue mix, down from 8.9% in 2019. Revenue in our primary market of Taiwan, accounting for nearly 95% of the 2020 sales mix, increased almost 35%. These results were driven by our increased focus on sales of life insurance products, especially those with periodic payment schedules that provide recurring revenue to the Company.

“Our increasingly productive sales force achieved the highest levels of their sales targets to produce these outstanding revenue increases during the pandemic-impacted year. The offset was increases in commissions, performance bonuses, stock-based compensation, and other incentives. And as the sales process moved increasingly online, we also added to our investment in online marketing and advertising, with these expenses rising by 19% during the year. These increased costs led to a gross margin of 29.4%, 250 basis points below the 2019 year. We believe that these results validate the focus and shifts in our business model and we look forward to another year of growth in 2021, supported by new commission growth as well as trailing commissions from our expanding book of periodic payment product sales. Additionally, we’re gratified that our return to full reporting status has enabled our common shares to be quoted on the OTCQB trading tier, effective just a few days ago,” concluded Mr. Yi-Hsiao Mao.

Total revenue for the year ended December 31, 2020 increased $28.3 million, or 29.6%, to $124.2 million compared to total revenue of $95.9 million for the year ended December 31, 2019. The increase was primarily due to the growth of life insurance sales in Taiwan, which accounted for 94.6% of total revenue. The cost of revenue increased $22.4 million, or 34.2%, to $87.7 million compared to $65.3 million for 2019. This increase was primarily due to increases in direct commission costs and increasing indirect commission costs due to the high sales target achievement rates. These increased costs resulted in a decrease in gross profit margin of 2.5 percentage points to 29.4% for 2020. Total operating expenses increased $7.3 million, or 31.7%, to $30.2 million compared to $22.9 million in 2019. The increase was primarily due to increases in stock-based compensation, performance bonuses and online marketing and advertising expenses. Net other income declined by $1.0 million, or 94.6%, due to foreign currency exchange losses from the continued appreciation of the New Taiwan Dollar against the U.S. dollar. After income tax expense, noncontrolling interests and other items, comprehensive income attributable to CUIS’ shareholders increased $0.8 million, or 21%, to $4.4 million for the 2020 year compared to $3.6 million for the 2019 year.

About China United Insurance Service, Inc.

China United Insurance Service, Inc. (“CUIS”) was founded in 2010 and has a traceable operating history in the insurance business since 1992. CUIS has a vision to become the top insurance intermediary enterprise in Asia by leveraging years of expertise of its Taiwan operations to capitalize on China’s rapidly growing insurance market. CUIS offers a broad range of products and services for individuals, families, and businesses, including brokerage services for various types of life, health, personal accident, property and casualty insurance; insurance application assistance; claims advocacy; claims accounting preparation services; disaster and loss prevention; risk assessment/risk management consulting services and the corresponding reinsurance brokerage services. CUIS currently markets and sells customer-oriented insurance products in China, Hong Kong, and Taiwan through its subsidiaries. In line with its vision, CUIS continuously seeks opportunities to expand into other territories in China and Southeast Asia. For more information on CUIS, please visit http://www.holdingscuis.com.

Forward-Looking Statement

Statements in this press release may be “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by terminology such as “will,” “expects,” “believes,” “anticipates,” “intends,” “estimates” and similar statements, and involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections of CUIS and the insurance industry. Potential risks and uncertainties include, but are not limited to, those relating to CUIS’ ability to attract and retain productive agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, and macroeconomic conditions in China and Taiwan and the potential impact on the sales of insurance products. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in the company’s filings with the Securities and Exchange Commission.

Contact:

Investor Relations

Kirin Smith, President

PCG Advisory, Inc.

ksmith@pcgadvisory.com (646) 823-8656

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