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
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 89.4%
and 88.6% of total revenue for the three months ended June 30, 2022 and 2021,
respectively. Total revenue from PRC segment's sales of life insurance products
were 3.0% and 3.7% of total revenue for the three months ended June 30, 2022 and
2021, respectively.

Total revenue from Taiwan segment's sales of life insurance products were 89.3%
and 88.3% of total revenue for the six months ended June 30, 2022 and 2021,
respectively. Total revenue from PRC segment's sales of life insurance products
were 3.3% and 4.8% of total revenue for the six months ended June 30, 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, it 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
invested 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 continue being 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 7.1% and 7.5% of total revenue for the three months ended June 30,
2022 and 2021, respectively. Total revenue from PRC segment's sales of property
and casualty insurance products were 0.4% and 0.2% of total revenue for the
three months ended June 30, 2022 and 2021, respectively.

Total revenue from Taiwan segment's sales of property and casualty insurance
products were 6.7% and 6.4% of total revenue for the six months ended June 30,
2022 and 2021, respectively. Total revenue from PRC segment's sales of property
and casualty insurance products were 0.6% and 0.3% of total revenue for the six
months ended June 30, 2022 and 2021, respectively.

As the impacts of COVID-19 and its duration remain uncertain, we have been
monitoring and will continue to measure and modify our business attempting to
keep our customers, sales professionals and employees healthy and safe. 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.

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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 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 June 30, 2022 Compared to Three Months
ended June 30, 2021

The following table shows the results of operations for the three months ended
June 30, 2022 and 2021:

                                                             Three Months Ended June 30,
                                                 2022             2021
                                              (Unaudited)      (Unaudited)        Change         Percent
Revenue                                      $  31,655,708    $  32,973,680    $ (1,317,972)        (4.0) %
Cost of revenue                                 21,329,935       23,536,213      (2,206,278)        (9.4) %
Gross profit                                    10,325,773        9,437,467          888,306          9.4 %
Gross profit margin                                   32.6 %           28.6 %            4.0 %       14.0 %

Operating expenses:
Selling                                            433,681           96,297          337,384        350.4 %

General and administrative                       6,770,309        6,189,833          580,476          9.4 %
Total operating expenses                         7,203,990        6,286,130

         917,860         14.6 %

Income from operations                           3,121,783        3,151,337         (29,554)        (0.9) %

Other income (expenses):
Interest income                                    161,075          129,779           31,296         24.1 %
Interest expenses                                 (69,804)         (46,636)         (23,168)         49.7 %
Foreign currency exchange gain (loss),
net                                                704,463        (427,652)        1,132,115      (264.7) %
Dividend income                                    212,369          251,328         (38,959)       (15.5) %
Other - net                                       (38,767)           80,669        (119,436)      (148.1) %

Total other income (expenses), net                 969,336         (12,512)

981,848 (7,847.3) %

Income before income taxes                       4,091,119        3,138,825

         952,294         30.3 %
Income tax expense                             (1,117,372)      (1,001,598)        (115,774)         11.6 %

Net income                                       2,973,747        2,137,227          836,520         39.1 %
Net income attributable to noncontrolling
interests                                      (1,355,537)        (946,344)        (409,193)         43.2 %
Net income attributable to China United's
shareholders                                     1,618,210        1,190,883

427,327 35.9 %

Other comprehensive items, net of tax: (3,551,754) 1,698,987

(5,250,741) (309.1) %

Comprehensive income (loss)                      (578,007)        3,836,214      (4,414,221)      (115.1) %
Comprehensive loss attributable to
noncontrolling interests                         (177,697)      (1,495,321)        1,317,624       (88.1) %
Comprehensive income (loss) attributable
to China United's shareholders               $   (755,704)    $   2,340,893

   $ (3,096,597)      (132.3) %


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.

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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 June 30, 2022 and 2021, the revenues generated from Taiwan, PRC and
Hong Kong were as follows:

Geographic Areas                       Three Months Ended June 30,
                             2022            2021           Change        Percent
Revenue
Taiwan segment           $ 30,570,467    $ 31,680,144    $ (1,109,677)      (3.5) %
Percentage of revenue            96.6 %          96.1 %
PRC segment                 1,085,112       1,265,100        (179,988)     (14.2) %
Percentage of revenue             3.4 %           3.8 %
Hong Kong segment                 129          28,436         (28,307)     (99.5) %
Percentage of revenue               - %           0.1 %
Total revenue            $ 31,655,708    $ 32,973,680    $ (1,317,972)      (4.0) %


Revenue from our Taiwan segment decreased by $1.1 million from $31.7 million for
the three months ended June 30, 2021 to $30.6 million for the three months ended
June 30, 2022. The revenue in local currency was increased due to the
performance and operation bonus resulting from the sales of insurance products
increase from Uniwill but partially offset by the decrease in commission revenue
from Lawbroker. Another reason is the substantial depreciation of the New Taiwan
Dollar against the U.S. dollar has offset the above increase and further caused
the decrease in the revenue.

Revenue from our PRC segment decreased by $0.2 million from $1.3 million for the
three months ended June 30, 2021 to $1.1 million for the three months ended June
30, 2022. The overall insurance industry environment was declining during 2022
in PRC and customers in PRC were less willing to buy those insurance products in
2022, which resulted in the decrease of revenue in the PRC segment.

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 decrease from
our Hong Kong segment for the three months ended June 30, 2022 continued
compared to that of the three months ended June 30, 2021 due to the termination
of certain of our reinsurance agreements and the discontinuation of travel
insurance.

Cost of revenue and gross profit

The cost of revenue mainly consists of commissions paid to our sales
professionals. The cost of revenue decreased by $2.2 million from $23.5 million
for the three months ended June 30, 2021 to $21.3 million for the three months
ended June 30, 2022. The decrease in the cost of revenue was mainly resulted
from the revenue decrease of Lawbroker and therefore decreased the commissions
paid to the agents accordingly, and also influenced by the foreign exchange
fluctuation from the substantial depreciation of the New Taiwan Dollar against
the U.S. dollar.

In addition, the Company received the additional bonuses provided by the
insurance companies which did not incur cost of commissions paid to sales
agents. Consequently, the gross profit margin increased from 28.6% for the three
months ended June 30, 2021 to 32.6% for the three months ended June 30, 2022.

Selling expenses

Selling expenses were mainly incurred by Law Broker and Uniwill in connection
with online marketing and advertising. For the three months ended June 30, 2022,
selling expenses were $0.4 million, reflecting an increase of $ 0.3 million,
compared with $0.1 million of selling expenses for the three months ended June
30, 2021. The increase in the selling expenses was caused by the marketing
activities during the three months ended June 30, 2022. For the same period in
2021, the adverse impact from the outbreak of COVID-19 in Taiwan had
substantially restricted our marketing activities in Taiwan, leading to less
selling expenses in such period.

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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. For the three months ended June 30, 2022, G&A
expenses were $6.8 million, reflecting an increase of $0.6 million, compared
with $6.2 million of G&A expenses for the three months ended June 30, 2021. The
increase in G&A expenses was mainly due to the recognition of severance pay
arising from the disposal of subsidiary Jiangsu Law in the three months ended
June 30, 2022.

Other income (expenses)

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 $1.0 million,
compared with the other income (expenses) of $0.0 million for the three months
ended June 30, 2021. The increase in other income was mainly due to foreign
currency exchange gain recognized from foreign currency time deposits assets and
intercompany receivable and payable because of the substantial depreciation of
the New Taiwan Dollar against the U.S. dollar and Chinese Yuan during the second
quarter of 2022.

Income tax expense

For the three months ended June 30, 2022, income tax expense was $1.1 million,
reflecting an increase of $0.1 million or 11.6%, compared with the income tax
expense of $1.0 million for the three months ended June 30, 2021. The increase
in tax expenses was mainly due to the increase in revenues generated in the
Taiwan segment. In addition, the recognition of estimated tax expenses for the
disposal of a subsidiary also contributed to the increase in income tax
expenses.

Other comprehensive items

Other comprehensive items mainly consisted of foreign currency translation gain
or loss. The foreign currency translation loss was $3.6 million, reflecting a
decrease of $5.3 million, compared with foreign currency translation gain of
$1.7 million for the three months ended June 30, 2021. The decrease was mainly
due to a larger foreign currency translation loss resulted from the substantial
depreciation of the New Taiwan Dollar against the U.S. dollar for the three

months ended June 30, 2022.

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Results of Operations- Six Months ended June 30, 2022 Compared to Six Months
ended June 30, 2021

The following table shows the results of operations for the six months ended
June 30, 2022 and 2021:

                                                              Six Months Ended June 30,
                                                 2022             2021
                                              (Unaudited)      (Unaudited)        Change         Percent
Revenue                                      $  62,636,231    $  63,503,797    $   (867,566)        (1.4) %
Cost of revenue                                 40,339,454       42,509,645      (2,170,191)        (5.1) %
Gross profit                                    22,296,777       20,994,152        1,302,625          6.2 %
Gross profit margin                                   35.6 %           33.1 %            2.5 %        7.6 %

Operating expenses:
Selling                                          1,117,831          676,074          441,757         65.3 %

General and administrative                      12,743,348       12,280,087          463,261          3.8 %
Total operating expenses                        13,861,179       12,956,161

         905,018          7.0 %

Income from operations                           8,435,598        8,037,991          397,607          4.9 %

Other income (expenses):
Interest income                                    266,052          213,777           52,275         24.5 %
Interest expenses                                (122,139)         (89,106)         (33,033)         37.1 %
Foreign currency exchange gain (loss),
net                                              1,442,013         (99,186)        1,541,199    (1,553.8) %
Dividend income                                    212,369          251,328         (38,959)       (15.5) %
Other - net                                        123,281          259,609        (136,328)       (52.5) %

Total other income, net                          1,921,576          536,422

1,385,154 258.2 %

Income before income taxes                      10,357,174        8,574,413

       1,782,761         20.8 %
Income tax expense                             (2,699,269)      (2,400,404)        (298,865)         12.5 %

Net income                                       7,657,905        6,174,009        1,483,896         24.0 %
Net income attributable to noncontrolling
interests                                      (3,094,818)      (2,572,740)        (522,078)         20.3 %
Net income attributable to China United's
shareholders                                     4,563,087        3,601,269

961,818 26.7 %

Other comprehensive items, net of tax: (6,665,249) 508,052

(7,173,301) (1,412.0) %

Comprehensive income                               992,656        6,682,061      (5,689,405)       (85.1) %
Comprehensive loss attributable to
noncontrolling interests                         (875,142)      (2,758,642)        1,883,500       (68.3) %
Comprehensive income attributable to
China United's shareholders                  $     117,514    $   3,923,419

   $ (3,805,905)       (97.0) %


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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 six months ended June 30, 2022 and 2021, the revenues generated
from Taiwan, PRC and Hong Kong were as follows:

Geographic Areas                       Six Months Ended June 30,
                              2022            2021          Change      Percent
Revenue
Taiwan segment           $ 60,120,352    $ 60,147,807    $  (27,455)          - %
Percentage of revenue            96.0 %          94.7 %
PRC segment                 2,432,928       3,216,569      (783,641)     (24.4) %
Percentage of revenue             3.9 %           5.1 %
Hong Kong segment              82,951         139,421       (56,470)     (40.5) %
Percentage of revenue             0.1 %           0.2 %
Total revenue            $ 62,636,231    $ 63,503,797    $ (867,566)      (1.4) %

Revenue from our Taiwan segment for the six months ended June 30, 2022 remained
consistent with that of the same period in 2021.

Revenue from our PRC segment decreased by $0.8 million from $3.2 million for the
six months ended June 30, 2021 to $2.4 million for the six months ended June 30,
2022. The overall insurance industry environment in PRC was declining during
2022 and customers in PRC were less willing to buy those insurance products in
2022, which resulted in the decrease of revenue in the PRC segment.

Revenue from the Hong Kong Segment was primarily derived from reinsurance
commission on sales of insurance products from other insurers to Taiwan Life for
risk management. Decrease in revenue from our Hong Kong segment for the six
months ended June 30, 2022 continued compared to that of the six months ended
June 30, 2021 due to the termination of certain reinsurance agreements and the
discontinuation of travel insurance.

Cost of revenue and gross profit

The cost of revenue mainly consists of commissions paid to our sales
professionals. The cost of revenue decreased by $2.2 million from $42.5 million
for the six months ended June 30, 2021 to that of $40.3 million for the six
months ended June 30, 2022. The decrease in the cost of revenue was mainly
resulted from the revenue decrease of Lawbroker and therefore decreased the
commissions paid to the agents accordingly, and also influenced by the foreign
exchange fluctuation from the substantial depreciation of the New Taiwan Dollar
against the U.S. dollar.

In addition, the Company received the additional bonuses provided by the
insurance companies which did not incur cost of commissions paid to sales
agents. Consequently, the gross profit margin increased from 33.1% for the six
months ended June 30, 2021 to 35.6% for the six months ended June 30, 2022.

Selling expenses

Selling expenses were mainly incurred by Law Broker and Uniwill in connection
with online marketing and advertising. For the six months ended June 30, 2022,
selling expenses were $1.1 million, reflecting an increase of $ 0.4 million,
compared with that of $0.7 million of selling expenses for the six months ended
June 30, 2021. The increase in the selling expenses was caused by the increase
of marketing activities during the six months ended June 30, 2022. For the same
period in 2021, the adverse impact from the outbreak of COVID-19 in Taiwan had
substantially restricted our marketing activities in Taiwan, resulting in less
selling expenses during the six months ended June 30, 2021.

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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. For the six months ended June 30, 2022, the G&A
expenses were $12.7 million, reflecting an increase of $0.45 million, compared
with that of $12.32 million for the six months ended June 30, 2021. The increase
in G&A expenses was mainly due to the recognition of severance pay arising from
the disposal of subsidiary Jiangsu Law during the six months ended June 30,
2022.

Other income (expenses)

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 during the six months ended June 30, 2022 was $1.9 million,
reflecting an increase of $1.4 million, compared with that of $0.5 million for
the six months ended June 30, 2021. The increase in other income was mainly due
to foreign currency exchange gain recognized from foreign currency time deposit
assets because of the substantial depreciation of the New Taiwan Dollar against
the U.S. dollar and Chinese Yuan during the first six months of 2022.

Income tax expense

For the six months ended June 30, 2022, income tax expense was $2.7 million,
reflecting an increase of $0.3 million or 12.5%, compared with that of $2.4
million for the six months ended June 30, 2021. The increase in income tax
expenses was mainly due to the increase in revenues generated in the Taiwan
segment during the first six months of 2022 and the estimated tax expenses
recognized for the disposal gain of the subsidiary in Jiangsu Law.

Other comprehensive items

Other comprehensive items mainly consisted of foreign currency translation gain
or loss. Foreign currency translation loss were $6.7 million, reflecting a
decrease of $7.2 million, compared with foreign currency translation gain of
$0.5 million for the six months ended June 30, 2021. The decrease was mainly due
to a larger foreign currency translation loss resulted from the substantial
depreciation of the New Taiwan Dollar against the U.S. dollar for the six months
ended June 30, 2022.

Liquidity and Capital Resources

The following table presents a comparison of the net cash provided by operating
activities, net cash used in investing activities and net cash provided by
financing activities for the six-month periods ended June 30, 2022 and 2021:

                                                                 Six Months Ended June 30,
                                                     2022             2021            Change        Percent
Net cash provided by operating activities        $  11,523,729    $  10,180,299    $   1,343,430       13.2 %
Net cash used in investing activities              (8,819,676)      (4,622,533)      (4,197,143)       90.8 %
Net cash provided by financing activities            2,334,192        3,734,048      (1,399,856)     (37.5) %


Operating activities

Net cash provided by operating activities during the six months ended June 30,
2022 was $11.5 million, reflecting an increase of $1.3 million or 13.2% in
comparison with that of $10.2 million during the six months ended June 30, 2021.
The increase in cash inflows was mainly due to the higher net income and
collection from accounts receivable for the six months ended June 30, 2022
compared with that of the same period in 2021.

Investing activities

Net cash used in investing activities during the six months ended June 30, 2022
was $8.8 million, reflecting an increase of $4.2 million or 90.8% in comparison
with that of $4.6 million for the six months ended June 30, 2021. Increases in
the cash used in the investing activities mainly resulted from the increase of
the purchases of marketable securities and time deposits, and the decrease of
proceeds from maturities of time deposits during six months ended June 30, 2022.
However, the cash outflow was partially offset by proceeds from receipts in
advance of disposal of a subsidiary.

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Financing activities

Net cash provided by financing activities was $2.3 million during the six months
ended June 30, 2022, which decreased by $1.4 million from that of $3.7 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 six months ended June 30, 2022.

Contractual Obligations

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

Off Balance Sheet Arrangements

The Company had no off-balance sheet arrangements as of June 30, 2022.