Customer Value and Social Relationships

Cathay FHC has long believed in "putting customers first" and strives to provide friendlier products and services that better meet customer demands and integrate company services into the daily lives of every consumer. Cathay FHC values customers' suggestions and has established a range of robust reporting channels and units to handle customer complaints and formulate response measures for different cases. "Taking the initiative to respond to customer complaints and care for customers" serves as the highest governing principle and the company strives to contact customers and provide solutions as soon as possible.

Subsidiaries	Customer Support Channels & Units	Organizations/Operations	Key Actions in 2022
Cathay Life	The Customer Relationship Enhancement Department is responsible for handling complaints from customers and has formulated the "Cathay Life Insurance Consumer Dispute Resolution Procedures" and "Cathay Life Insurance Guidelines for Handling Customer Complaints" to protect consumer rights. Additionally, the company has introduced a customer support hotline at (02)2162-6205 to optimize the handling of customer complaints.	lGovernance: Established the Fair Customer Treatment Committee in compliance with the "Articles of Association for the Fair Customer Treatment Committee." The president and senior executive VP of the Customer Relationship Enhancement Department serve as the chairperson and vice chairperson, respectively. Board of Directors (BOD) Participation: To enforce corporate governance and enhance BOD efficacy, directors and supervisors have completed requisite training in compliance with the "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies." All directors, supervisors, and branch heads have also completed the annual internal training required by the company. To effectively strengthen BOD functions and enforce corporate governance, the company has exhibited its resolve to promote fair customer treatment with a top-down approach and shaped the DNA of Cathay Life. Additionally, the company has strengthened various fair customer treatment practices and established related systems in three areas: "Policy Formulation," "Execution & Oversight," and "Engagement."	Independent directors serve on the Fair Customer Treatment Committee and related seminars to instruct on the following areas: 1. Strengthen remote services. 2. Protect the rights of senior citizens and disabled persons to enforce protection measures for disadvantaged communities. 3. Showcase outcomes from different channels, operations, and service systems at the Fair Customer Treatment Conference. The president continues to actively strengthen a culture of fair customer treatment and enforce compliance by: 1. Integrating the principle of fair customer treatment into daily operations. 2. Enforcing compliance and seeking progress. 3. Performing internal control and oversight to take the initiative and actively prevent risks from materializing. Provide customers with accessible and consistent service quality. Cathay Life launched the "Omni-channel Strategy & Operations Plan" to integrate internal systems and provide a service platform delivering consistent information in a way that is easy to understand, giving customers access to consistent information and service quality through customer service or any other channels and providing experiences exceeding customer expectations. Offer diverse added-value services through online sections available on the company's official website and offline channels to deliver comprehensive and diverse service channels. Provide convenient and accessible services to senior citizens.
CUB	The Financial Service Department is responsible for handling customer complaints and has established a 24H customer service hotline at (02)2383-1000 and a toll-free hotline at 0800-818-001. Customers can also file complaints on CUB's official website.	Company-wide Enforcement of Fair Customer Treatment: The BOD seeks to cultivate a culture of ethical corporate management with an emphasis on financial consumer protection. Every six months, the BOD receives reports on the enforcement of fair customer treatment. Every quarter, the BOD receives reports on customer complaints and related progress on mitigating complaints. Senior executives comprise the "Consumer Dispute Review Committee" to effectively handle cases of customer disputes. "Service Quality Teams" Spearheaded by Directors & Senior Executives: Enforce a customer-centric culture at the FHC level and adopt digital technologies to enhance customer service quality. Continue to provide training to raise compliance awareness in employees and enforce fair customer treatment.	In addition to actively handling customer complaints, the company put itself in the customer's shoes to consider their rights, systematically managing customer feedback and suggestions from complaints and disputes to optimize service processes and provide customers with a great experience. Utilize the "Alpha" chatbot and map out smart speech services to offer customized services and, thus, enhance the efficiency of customer service. Continue to develop digital finance and map out digital over-the-counter services at branches to facilitate branch transformations such as assisting customers to utilize digital services for filling out forms and completing transactions, expanding the scope of video services, optimizing device binding function for the CUBE App, and promoting one-stop CUBE App services to meet customers' demands for financial services remotely and deliver secure, high-quality financial services. Assemble cross-unit teams to actively map out and roll out accessible financial services to provide a more robust experience to senior citizens and disadvantaged customers.
Cathay Century Insurance	The Contact Center is responsible for handling customer inquiries and consumer disputes and has formulated the "Cathay Century Insurance Consumer Dispute Settlement Procedures" to protect consumer rights. Customers can provide detailed accounts to Cathay Century Insurance through the customer service hotline at 0800-212-880.	Fair customer treatment is assessed during the compliance self-assessment conducted every six months to ensure that all principles are enforced. The " Treating Customer Fairly Working Group Meetings[Jolene1]" are convened quarterly and attended by independent directors, presidents, and Executive VPs[Jolene2] from different units to discuss policy enforcement and complaint mitigation for subsequent reporting to the BOD. The "Customer Experience Management (CEM) Meetings" are convened monthly to promptly react to and resolve customer pain points. Meetings are chaired by the Executive VP[Jolene3] responsible for the Contact Center and attended by senior VPs and managers from related departments to confirm practices and timelines for improving customer experiences.	Progress in Quarterly Treating Customer Fairly Working Group Meetings: [Jolene4]In Q1, completed roll-out plans and formulated KPIs for all principles, which were later tracked at meetings in Q2, Q3, and Q4 and then reported to the BOD for review and oversight. In 2022 meetings, Cathay Century Insurance will continue to track the enforcement of practices to support disabled customers and senior citizens listed in 2021 to ensure the delivery of accessible services. Continued to comply with the four major stages - Uncover, Optimize, Track, and Confirm - to explore, classify, and analyze root causes of common complaints each quarter for reporting at the TreatingCustomer Fairly Working Group Meetings to track progress in mitigating root causes. Progress is then reported to the BOD every six months. Introduced CEM Meetings in 2022 to highlight customers' voices from daily operations, identify service gaps/breakpoints and provide suggestions every month, and work with related units to formulate and roll out mitigation measures, thereby enhancing customer experiences. lTo foster a deeply rooted service culture of treating customers fairly, Cathay Century Insurance organized the internal "iCARE Service Award" to encourage employees to ideate from customers' perspectives. In 2022, Cathay Century Insurance evaluated the feasibility of the winning proposal in 2021 - "Accessible Product & Service Designs for Disabled Customers" - and implemented the proposal by launching a new program - "Empowering Disabled Customers: Accessible Products & Services," which Cathay Century continues to track during CEM Meetings.
Cathay Securities	In compliance with the "Guidelines for Handling Customer Complaints" and "Procedures for Handling Financial Consumer Disputes," the Digital Operations Center is the dedicated unit for handling customer complaints and organizing closed complaints. Customers and make inquiries through the customer service hotline at (02) 7732-6888 or on the company's official website.	Governance: Established the "Fair Customer Treatment Committee" in compliance with the "Scope of Responsibilities & Articles of Association for the Fair Customer Treatment Committee." The president and a division-level executive serve as the chairperson and vice chairperson, respectively. Operations: In compliance with previously listed guidelines and related regulations outlined in the "Principles & Strategies for Treating Customers Fairly," the Fair Customer Treatment Committee regularly gathers information on related programs and their outcomes, convenes quarterly and annual meetings, and compiles reports to the BOD on the enforcement of the "Principles & Strategies for Treating Customers Fairly."	In 2022, established the "Fair Customer Treatment Committee" to replace the existing "Fair Customer Treatment & Service Quality Team" and formulated the "Scope of Responsibilities & Articles of Association for the Fair Customer Treatment Committee" to define the decision-making hierarchy. The Fair Customer Treatment Committee is comprised of three units - Financial Products & Services, Consumer Disputes, and Training - to enhance service quality in multiple areas.The Fair Customer Treatment Committee reports their work and progress to the BOD each quarter and moves forward with subsequent plans according to instructions from the BOD.
Cathay SITE	The Customer Service Department is responsible for handling customer complaints. Customers can provide detailed accounts to Cathay SITE through the customer service hotline at (02)7713-3000, email, fax, or by visiting Cathay SITE.	Enforce requirements on annual training hours and regularly report training status and progress to the BOD. The head of Cathay SITE's Business Division is responsible for overseeing and promoting the "principles of treating customers fairly." In addition to developing robust service processes, Cathay SITE also aims to integrate fair customer treatment into its corporate culture and regularly reports related progress to the BOD. Cathay SITE's human resources unit organizes three or more hours of related awareness programs and training on "fair customer treatment policies" and strategies, internal compliance guidelines, and codes of conduct to strengthen fair customer treatment practices among employees.	Reported to the BOD in 2023 Q1 on progress with implementing the "principles of treating customers fairly" and updating guidelines in compliance with regulations and actual progress for sound financial consumer protection. All training and customer complaints in 2022 were handled in compliance with related programs.

Cathay FHC upholds "Integrity, Accountability, and Innovation" as core values, seeks to enter customer's daily lives through diverse channels and sound services, and fosters the company's service culture in all employees through robust training, investing in customer relations and protecting their interest to continue enhancing service quality. The Service Quality Committee at Cathay FHC formulates the group's service guidelines to uphold and protect customer rights and the principles of treating customers fairly. The committee regularly reviews service strategies and programs with subsidiaries and works with subsidiaries' Service Quality Teams to plan, promote, and track service improvement programs, exhibiting Cathay FHC's commitment to hearing customers' voices and providing them with outstanding service qualities. Subsidiaries have, based on the nature of their business, commissioned large, credible market research companies to conduct satisfaction surveys on topics including sales agents, telephone customer service, claims services, over-the-counter services, and online services to provide a basis for improving the service quality.

Subsidiaries	Satisfaction Levels
Cathay Life	Will continue to monitor and optimize customer experiences to maintain high levels of satisfaction.
CUB	The Customer Service Center meets satisfaction requirements and continues to maintain high levels of customer satisfaction. The company will focus on spotlighting every customer touchpoint and journey, identifying critical factors most important to customers and of significant impact on customer satisfaction, and spotlighting their improvement.
Cathay Century Insurance	Continue to review all customer service processes, strengthening and improving service quality and customer experiences to increase customer satisfaction.
Cathay Securities	Monitor all online/offline service points and optimize services upon understanding customer feedback and expectations to continue increasing customer satisfaction.
Cathay SITE	Collect customer feedback with surveys conducted by third-party agencies and continue to advance digital service functions to support customers' mobile device usage and deliver online/offline service experiences.

Subsidiaries	2020 Satisfaction（%）	2021 Satisfaction（%）	2022 Satisfaction（%）	2022 Satisfaction Goal（%）
Cathay Life	97.7	98.5	97.8	90
CUB	92.5	92.6	92.5	90
Cathay Century	97.3	97.8	96.7	90
Cathay Securities	86.0	89.8	91.7	90
Cathay SITE	89.25	90.94	89.46	88

In 2016, Cathay FHC introduced the Net Promoter Score (NPS) to assess customer service journeys, obtain real-time customer feedback at important touchpoints, and conduct qualitative analysis and cross-department communication/collaboration to continue improving customer service experiences.

Subsidiaries	NPS Framework Deployment	Major Breakthroughs in 2022
Cathay Life	Deployed 18 service points for online/offline customer journeys and used automatic monitoring dashboard and customer response management backends to assess NPS changes and regularly devise customer experience optimization strategies. Results produced by cross-unit collaboration are tracked at quarterly service quality meetings to enhance service quality.	In addition to continuing to develop the "customer experience management mechanism" to perfect and optimize customer experiences, the company continued to invest in the company's advantages (e.g., digitalization levels and strengthening interactions/relationships between customers and sales agents) in 2022 and bolstered critical journeys that impact customer satisfaction levels and NPS. NPS was 29.2 in 2022, which increased from 21.1 in 2021.
CUB	The Customer Service Center issues tNPS surveys to incoming callers every day and conducts correlation analysis on survey feedback, reasons for calling, and related products to explore gaps in customer experiences for monthly reporting to related units to actively develop service strategies that better meet customers' demands. The "digital platform NPS mechanism" uses NPS, customer interviews, and usability tests to help design platform experiences that better meet users' demands and expectations.	The Customer Service Center increased its tNPS by 0.4 points, from 62.4 in 2021 to 62.8 in 2022. Customers have consistently supported and recommended the center's services. In 2022, the CUBE APP increased its rNPS by 2 points from 2021 to 42 points. The percentage of critics dropped from 14.7% in 2021 to 12.3% in 2022, indicating that customers recognize and recommend optimizations deployed to the company's digital platform services. Cathay FHC customers also strongly recommend the CUBE APP, ranking it first over competing products in Taiwan.
Cathay Century Insurance	Deployed 30 online/offline service points to gain daily insight into customer voices through the NPS feedback management backend and visual reports and recreate customer experiences at every service point in regular meetings and cross-unit collaboration to uncover core problems and viable solutions to continue optimizing customer experiences.	In 2022, maintained consistent tNPS both online and offline and continued to optimize administrative and service processes at each service point based on customer feedback to strengthen customer support for Cathay Century Insurance's services.
Cathay Securities	Deployed 12 online/offline tNPS service points for testing by taking stock of customer service journeys and sending NPS surveys to customers the day after they received services from Cathay Securities. Customer service then calls customers to learn more about their experiences at every service point based on NPS survey feedback. Cathay Securities also communicates and collaborates across units to continue optimizing customer experiences.	In 2022, scores for online/offline tNPS service points increased from the previous year. Scores from offline tNPS service points increased significantly after training and mystery shopping (trading counter for accepting orders increased from 38.8 to 68.1 points, Customer Service Center increased from 65.5 to 78.7 points, and over-the-counter services increased from 61.7 to 73.2 points), indicating that Cathay Securities has been able to improve the quality of in-person services while developing digital services.
Cathay SITE	Cathay SITE integrates NPS survey activities with satisfaction to review various services such as brands and products to focus on key points and improve customer experience and satisfaction.	In 2022, Cathay SITE commissioned a third-party agency to survey customer satisfaction and confirmed it was still among the best, indicating that customers continue to be happy with Cathay SITE services. Cathay SITE will also continue to maintain great interactions and relationships to fulfill potential customer demands.

Cathay FHC attaches great importance to the privacy of customers and the security of personal data. In order to ensure the effectiveness of customer privacy protection and personal data security, Cathay FHC has formulated a "personal data file security maintenance plan and personal data processing methods after business termination". It is an important guideline for the protection and management of personal data. Cathay FHC and its subsidiaries have also established the most appropriate risk management mechanism for personal data protection, provided the resources required for privacy protection risk management, set up a dedicated personal data protection unit, was responsible for evaluating and planning the personal data protection management structure, and supervised relevant operating procedures In order to continuously improve the operation of the privacy protection management mechanism and fully protect the privacy and personal data security of customers.

Customer Privacy Policy

To thoroughly enforce personal information management, Cathay FHC has established the "Personal Information Management Committee." The president serves as the chairperson, while the Risk Management Division serves as the personal information management responsible for planning, overseeing, and enforcing committee decisions and reviewing and improving the group's personal information management. To actively safeguard customer rights in the face of rapidly evolving technologies and attacks, Cathay FHC's main subsidiaries - Cathay Life, CUB, and Cathay Century - have obtained accreditation from international standards, "BSI10012:2017 Personal Information Management." In addition to obtaining international accreditation to observe international privacy rights and protection trends, Cathay FHC also conducts third-party audits annually and utilizes the P-D-C-A method to strengthen personal information management and ensure effective protection thereof. Cathay FHC and subsidiaries also publish "privacy policies" on official websites to explain how the companies collect, apply, and protect the personal information provided by customers. Personal information is only provided to third-party products and service partners to provide related services with customer consent. To protect users' personal information and maintain online privacy, privacy policies are subject to changes to comply with regulatory changes and new technologies to ensure customer rights. Customers with questions about the company's privacy policies or how their personal information is being used can contact customer service through channels provided on the company's official websites.

Customer Personal Information Management Process

Cathay FHC and its subsidiaries comply with the "Personal Data Protection Act" and related regulations when collecting, processing, or using personal information. Before collecting personal information, Cathay FHC and its subsidiaries will expressly inform the purpose of collection, and with whom the information will be shared. The personal information will not be used in any way exceeding the necessary scope of specific purposes. The company requires third parties to comply with internal policies on personal information protection and has also defined user's rights to make an inquiry of and review; request a copy of; supplement or correct; demand the cessation of the collection, processing, or use of; and erase his/her personal data. In response to the EU's "General Data Protection Regulation" (GDPR), Cathay FHC has aligned personal information management processes with international standards. The company seeks to continue optimizing and enforcing management, control, and protection and introducing multiple layers of protection such as emergency response processes and drills to safeguard customer information and customer rights. In terms of retention periods for personal information, unless otherwise required by law or contractual obligations, Cathay FHC will erase or cease processing or using any retained personal information when the specific purpose of data collection no longer exists, or upon expiration of the relevant time period and retain related trails or evidence for at least five years. To reduce risks of data leaks from employees storing material personal information on their personal computers, CUB deployed a Personal Information Protection and Administration System (PIPAS) and, in 2020, Cathay Life created a "Personal File Administration Classified Section" by restricting authorized personnel and access time to strengthen protection against data leaks. In the event of violations against personal information protection, Cathay FHC complies with punishments outlined in the "Personal Data Protection Act" and has also defined disciplinary action in the "Personal Information Processing & Security Management Regulations." Cathay FHC employees in violation of personal information protection regulations impacting the rights and interests of the company and its customers will be handed over to human resource organizations for disciplinary action.

Cathay FHC and its subsidiaries conduct joint marketing activities, and customer data is used for secondary purposes. In accordance with regulations governing joint marketing and the Personal Data Protection Act, a total of 2.46 million customers (as of the end of 2022) have signed their consent allowing Cathay FHC and its subsidiaries to share data for mutual use. This accounts for 16% of all Cathay FHC customers, and each case is reviewed and approved independently when shared for mutual use. Please refer to the following link for a joint statement by Cathay FHC and its subsidiaries on privacy measures for the mutual use of customer data.

Complete Personal Information Protection Education and Training

Cathay FHC organizes annual campaigns, education, and training for raising all employees’ awareness towards personal information protection, so that they understand the regulatory requirements, the scope of their responsibilities, and the various mechanisms, procedures, and measures related to the protection of personal information. The completion rate of personal information training of Cathay FHC and its subsidiaries was 100% in 2020.

Note: The completion rate above excludes employees due to characteristics of their duties and leave plans (temporary dispatch, parental leave, maternity leave, etc.).

Violations & Response to Customer Privacy

Cathay FHC and its subsidiaries have established "Emergency Response Procedures for Personal Data Breaches," processes for regular drills, interdepartmental "Emergency Response Teams," and reporting and handling processes. Regular simulated training can strengthen the ability of employees to respond to personal data breaches, prevent impacts to the company, and reduce, as much as possible, damages to the affected individual. Cathay FHC also verifies the effectiveness of internal processes to identify deficiencies and perfect personal information protection measures. In 2022, the Financial Supervisory Commission (FSC) announced two sanctions uncovered from customer complaints to the FSC. In 2022, Cathay FHC experienced eight data breaches, 100% of which were related to personal information. A total of 120 customers were affected by the aforementioned violations and breaches. Upon further investigation, Cathay FHC identified the source as sales agents neglecting to inform customers of a third person and one case in which the logistics company lost but later recovered an insurance receipt (containing only the subject's name and insurance premium). None of the cases were material data breaches or infringed on customer privacy. Cathay FHC has been able to settle the cases with customers and has handled the situation accordingly. The company will continue to organize employee training and strengthen awareness programs to ensure related employees fully recognize the importance of personal information protection. In addition, the group will continue to strengthen and monitor the use of customers' personal information and improve related protection measures to reduce future data breaches.

Personal Information Security Implementation Results

	2020	2021	2022
Personal information protection training completion rate (%)	100	100	100
No. of information breaches (cases) (Note 1)	-	11	10
Personal information breaches as a percentage of total information breaches (%) (Note 1)	-	100	100
No. of customers affected by personal information breaches (customers) (Note 1)	-	6,520	120

Note 1: Cathay started to disclose relevant data in 2021. Data in "No. of information breaches," "Personal information breaches as a percentage of total information breaches" and "No. of customers affected by personal information breaches" include data for Cathay Life, CUB, Cathay Century, Cathay Securities and Cathay SITE.

Distribution of Personal Information Cases in 2022

Subsidiaries	Cases Reported by the Central Competent Authority	Investigation Initiated by Cathay
Cathay FHC	0	0
Cathay Life	0	8
CUB	2	0
Cathay Century	0	0
Cathay Securities	0	0
Cathay SITE	0	0
Total	2	8

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