Members Report: Nova Insurance Consultants Ltd AAA Conference | 24 May 2019 Beijing, China Members Report: Nova Insurance Consultants Ltd

AAA Members Report – Hong Kong Country: Hong Kong Name of Member: Nova Insurance Consultants Ltd Membership details (update) - Annual Premium Turnover: USD105M - Number of Staff: 65 in Hong Kong; 43 in China

AAA Members Report – Hong Kong Countries of Operation: Hong Kong, Macau, China - Location: Hong Kong with a branch in Macau Insert map with office/country locations if possible

AAA Members Report – Hong Kong % of income by top 5 – 10 industries 1) Construction 2) Property Developer 3) Property Manager 4) Hotels 5) Manufacturers/Traders

AAA Members Report – Hong Kong Professional Indemnity Details (update) - Limit of Indemnity: USD30M - Legislative Requirements: 2 times annual brokerage with maximum at HKD75M - Insurers: - AIG Insurance Hong Kong Ltd; and - Markel Syndicate at Lloyds

AAA Members Report – Hong Kong Who regulates Insurance Brokers in the country: (1) The Insurance Authority (from mid-Sept 2019); (2) The Hong Kong Confederation of Insurance Brokers; (3) Professional Insurance Brokers Association What Insurance Broker and Agent Education Programs exists: Insurance Intermediaries Quality Assurance Scheme; Continuing Professional Development (“CPD”) Programme How many Insurers operate in the country: 161 insurers in Hong Kong (as at 31 Dec 2018) How many Insurers are active Broker markets: Mostly (over 80%)

AAA Members Report – Hong Kong Market Conditions - Number of Insurers decreasing, increasing, stable: Increasing - Insurance capacity decreasing, increasing, stable: Stable - Premiums decreasing, increasing, stable: Premium remains stable except construction EC (Employees Compensation) increasing and some increment in Property too. - Commissions decreasing, increasing, stable: Stable - Amount of fee income as a percentage of total Broker income: Below 5% - Average Broker income percentage earned as commission: 15%

AAA Members Report – Hong Kong Number of Brokers decreasing, increasing, stable: Stable Percentage of business controlled by Brokers: Around 50% (no official statistics available) Percentage of business controlled by insurers (direct): Around 10% (no official statistics available) Percentage of business controlled by other intermediaries e.g. banks: Around 40% (no official statistics available)

AAA Members Report – Hong Kong Information Technology used by Brokers (including online platforms): Limited

AAA Members Report – Hong Kong Political issues at time of report: Stable Economy at time of report: Stable Member’s view of Insurance Broking over the next 3 years: Stable

AAA Members Report – Hong Kong Member’s principle activities/successes over last year: Insurance broking Risk management Any major issues/challenges: Shortage of talent High operating costs especially rent and salary Member’s planned activities over the next 3 years: Steady expansion

AAA Members Report – Hong Kong Any potential business/opportunities for AAA members to work together: Inward referrals : MNCs investment into Hong Kong, Macau & China.