CHINA UNITED INSURANCE SERVICE, INC. – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

The following discussion of the results of operations and financial condition
should be read in conjunction with our unaudited condensed consolidated
financial statements and notes thereto included in Item 1 of this part. This
report, including the information incorporated by reference, contains
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. The use of any of the words "believe," "expect,"
"anticipate," "plan," "estimate," and similar expressions are intended to
identify such statements. Forward-looking statements include statements
concerning our possible or assumed future results. The actual results that we
achieve may differ materially from those discussed in such forward-looking
statements due to the risks and uncertainties described in the Risk Factors
section of this report, in Management's Discussion and Analysis of Financial
Condition and Results of Operations, and in other sections of this report, as
well as in our annual report on Form 10-K. We undertake no obligation to update
any forward-looking statements.

Overview

The Company primarily provides two broad categories of insurance products, life
insurance products and property and casualty insurance products, in Taiwan and
People's Republic of China ("PRC"). The Company also provides reinsurance
brokerage services and insurance consulting services in Hong Kong and Taiwan.
The percentage of reinsurance brokerage services and insurance consulting
services is less than 1% of our total revenue. The insurance products that the
Company's subsidiaries sell are underwritten by some of the leading insurance
companies in Taiwan and PRC, respectively.

(1) Life Insurance Products

Total revenue from Taiwan segment's sales of life insurance products were 89.2%
and 88.1% of total revenue for the three months ended March 31, 2022 and 2021,
respectively. Total revenue from PRC segment's sales of life insurance products
were 3.6% and 6.0% of total revenue for the three months ended March 31, 2022
and 2021, respectively.

In addition to the periodic premium payment schedules, most of the individual
life insurance products we distribute also allow the insured to choose to make a
single, lump-sum premium payment at the beginning of the policy term. If a
periodic payment schedule is adopted by the insured, a life insurance policy can
generate periodic payment of fixed premiums to the insurance company for a
specified period of time. This means that once the Company sells a life
insurance policy with a periodic premium payment schedule, they will be able to
derive commission and fee income from that policy for an extended period of
time, sometimes up to 25 years. Because of this feature and the expected
sustainable growth of life insurance sales in the PRC and Taiwan, we have
focused significant resources ever since the incorporation of Anhou and Law
Broker on developing our capability to distribute individual life insurance
products with periodic payment schedules. We expect that sales of life insurance
products will continuously be our primary source of revenue in the next several
years.

(2) Property and Casualty Insurance Products

Total revenue from Taiwan segment's sales of property and casualty insurance
products were 6.3% and 5.2% of total revenue for the three months ended March
31, 2022 and 2021, respectively. Total revenue from PRC segment's sales of
property and casualty insurance products were 0.7% and 0.4% of total revenue for
the three months ended March 31, 2022 and 2021, respectively.

As COVID-19 and its duration remain uncertain, we have been monitoring and will
continue to measure and modify our business to protect our customers, sales
professionals and employees. The extent of the COVID-19 impact to the Company
will depend on numerous factors and developments. Consequently, any potential
impacts of COVID-19 remain highly uncertain and cannot be predicted with
confidence.

Critical Accounting Policies and Estimates

A critical accounting policy is one that is both important to the portrayal of
our financial condition and results of operation and requires our management's
most difficult, subjective or complex judgments, often as a result of the need
to make estimates about the effect of matters that are inherently uncertain. We
have had no changes to our Critical Accounting Policies as described in our most
recent Form 10-K for the year ended December 31, 2021 and believe that of our
significant accounting and reporting policies, the more critical policies
include our accounting for revenue recognition and estimate of income taxes. Our
significant accounting policies are described

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in Note 1 of "Summary of Significant Accounting Policies" included within our
2021 Annual Report on Form 10-K filed with the Securities and Exchange
Commission.

Results of Operations- Three Months ended March 31, 2022 Compared to Three
Months ended March 31, 2021

The following table shows the results of operations for the three months ended
March 31, 2022 and 2021:

                                                              Three Months Ended March 31,
                                                    2022             2021
                                                 (Unaudited)      (Unaudited)       Change       Percent
Revenue                                         $  30,980,523    $  30,530,117    $   450,406          2 %
Cost of revenue                                    19,009,519       18,973,432         36,087          - %
Gross profit                                       11,971,004       11,556,685        414,319          4 %
Gross profit margin                                      38.6 %           37.9 %          0.7 %        2 %

Operating expenses:
Selling                                               684,150          579,777        104,373         18 %
General and administrative                          5,973,039        6,090,254      (117,215)        (2) %
Total operating expenses                            6,657,189        6,670,031       (12,842)          - %

Income from operations                              5,313,815        4,886,654        427,161          9 %

Other income (expenses):
Interest income                                       104,977           83,998         20,979         25 %
Interest expenses                                    (52,335)         (42,470)        (9,865)         23 %
Foreign currency exchange gains, net                  737,550          328,466        409,084        125 %
Other - net                                           162,048          178,940       (16,892)        (9) %
Total other income, net                               952,240          548,934        403,306         74 %

Income before income taxes                          6,266,055        5,435,588        830,467         15 %
Income tax expense                                (1,581,897)      (1,398,806)      (183,091)         13 %

Net income                                          4,684,158        4,036,782        647,376         16 %
Net income attributable to the
noncontrolling interests                          (1,739,281)      (1,626,396)      (112,885)          7 %
Net income attributable to China United's
shareholders                                    $   2,944,877    $   2,410,386    $   534,491         22 %


Revenue

As a distributor of insurance products, we derive our revenue primarily from
commissions and fees paid by insurance companies, typically calculated as a
percentage of premiums paid by our customers to the insurance companies in
Taiwan, PRC and Hong Kong. We generate revenue primarily through our sales
force, which consists of individual sales agents in our distribution and service
network. For the three months ended March 31, 2022 and 2021, the revenues
generated from Taiwan, PRC and Hong Kong were as follows:

Geographic Areas                      Three Months Ended March 31,
                             2022            2021          Change       Percent
Revenue
Taiwan segment           $ 29,549,885    $ 28,467,663    $ 1,082,222        3.8 %
Percentage of revenue            95.4 %          93.2 %
PRC segment                 1,347,816       1,951,469      (603,653)     (30.9) %
Percentage of revenue             4.3 %           6.4 %
Hong Kong segment              82,822         110,985       (28,163)     (25.4) %
Percentage of revenue             0.3 %           0.4 %

Total revenue            $ 30,980,523    $ 30,530,117    $   450,406       

1.5 %

Revenue from our Taiwan segment increased by $1.0 million from $28.5 million for
the three months ended March 31, 2021 to $29.5 million for the three months
ended March 31, 2022. Increase in revenue was mainly due to the high performance
of sales of investment-

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type insurance policies, our continued growth in the sales of insurance products
in the past years, and our continuance of receiving more persistency-rate-linked
bonuses for the three months ended March 31, 2022 as compared to the three
months ended March 31, 2021.

Revenue from our PRC segment decreased by $0.6 million from $1.9 million for the
three months ended March 31, 2021 to $1.3 million for the three months ended
March 31, 2022. The insurance premium of certain products were priced higher in
the first quarter of 2022 than those in the first quarter of 2021 and therefore,
customers in PRC were unwilling to buy the insurance products, which resulted in
the decrease of revenue. In addition, the persistency-rate-linked bonuses in the
PRC segment also decreased for the three months ended March 31, 2022 due to the
termination of certain sales agreement with some of the PRC insurance companies.

Revenue from the Hong Kong Segment was primarily derived from reinsurance
commission on sales of insurance products from other insurers to Taiwan Life
Insurance Co., Ltd. ("Taiwan Life") for risk management. Revenue from our Hong
Kong segment for the three months ended March 31, 2022 remained consistent with
that of the same period in 2021.

Cost of revenue and gross profit

The cost of revenue mainly consists of commissions paid to our sales
professionals. The cost of revenue for the three months ended March 31, 2022
remained consistent with that of the same period in 2021.

Consequently, the gross profit margin increased from 37.9% for the three months
ended March 31, 2021 to 38.6% for the three months ended March 31, 2022. Such
increase in the gross profit margin mainly resulted from receiving more
contingent commissions for subsequent years.

Selling expenses

Selling expenses were mainly incurred by Law Broker and Uniwill in connection
with online marketing and advertising. For the three months ended March 31,
2022, selling expenses were $0.7 million, reflecting an increase of $ 0.1
million, compared with $0.6 million of selling expenses for the three months
ended March 31, 2021. Increase in the selling expenses was caused by the
donation for charity foundations in Taiwan during the three months ended March
31, 2022.

General and administrative expenses

General and administrative ("G&A") expenses are principally comprised of
salaries and benefits for our administrative staff, office rental expenses,
travel expenses, depreciation and amortization, entertainment expenses, and
professional service fees. General and administrative expenses were $6.0 million
for the three months ended March 31, 2022, which was not significantly different
from those of the same period of 2021.

Other income (expense)

Other income mainly consisted of interest income, interest expenses, gain or
loss on valuation of financial assets, and foreign currency exchange gain or
loss. Other income were $1.0 million, reflecting an increase of $0.5 million,
compared with the other income of $0.5 million for the three months ended March
31, 2021. The increase in other income was mainly due to foreign currency
exchange gain recognized from foreign currency time deposits because of the
depreciation of the New Taiwan Dollar against the U.S. dollar and Chinese Yuan
during the first quarter of 2022.

Income tax expense

For the three months ended March 31, 2022, income tax expense was $1.6 million,
reflecting an increase of $0.2 million or 13%, compared with the income tax
expense of $1.4 million for the three months ended March 31, 2021. The increase
in tax expenses was mainly due to the increase in revenues generated in the
Taiwan segment during the first quarter of 2022.

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Liquidity and Capital Resources

The following table presents a comparison of the net cash provided by operating
activities, net cash provided by (used in) investing activities and net cash
provided by financing activities for the three-month periods ended March 31,
2022 and 2021:

                                                               Three Months Ended March 31,
                                                    2022            2021           Change         Percent
Net cash provided by operating activities       $   7,599,296    $ 6,445,228    $   1,154,068         17.9 %
Net cash (used in) provided by investing
activities                                        (5,331,480)        199,142      (5,530,622)    (2,777.2) %
Net cash provided by financing activities           1,054,769      2,171,143      (1,116,374)       (51.4) %


Operating activities

Net cash provided by operating activities during the three months ended March
31, 2022 was $7.6 million, reflecting an increase of $1.2 million or 17.9% in
comparison with that of $6.4 million during the three months ended March 31,
2021. The increase in cash inflows was mainly due to the higher net income and
collection from accounts receivable for the three months ended March 31, 2022
compared with that of the same period in 2021.

Investing activities

Net cash used in investing activities was $5.3 million during the three months
ended March 31, 2022 as compared with the net cash provided by investing
activities of $0.2 million for the three months ended March 31, 2021. Increases
in the cash used in the investing activities resulted from the increase of the
purchases of marketable securities and time deposits, and the decrease of
proceeds from maturities of time deposits during the first quarter of 2022.

Financing activities

Net cash provided by financing activities was $1.1 million during the three
months ended March 31, 2022, which decreased by $1.1 million from that of $2.2
million during the same period of 2021. The decrease was mainly due to the
decrease in the net proceeds from additional borrowings under the revolving
credit agreements and partially offset by the decrease of repayment of related
party borrowings during the first quarter of 2022.

Contractual Obligations

There have been no significant changes to the Company's contractual obligations
as disclosed in the Company's 2021 Annual Report filed on Form 10-K.

Off Balance Sheet Arrangements

The Company had no off-balance sheet arrangements as of March 31, 2022.