The identification of material topics serves as an important foundation for SKL's stakeholder engagement, sustainability reporting, and sustainability strategy development. In accordance with the material topic identification process set out in GRI 3: Material Topics 2021, the Company conducted a questionnaire-based assessment to evaluate the potential positive and negative impacts of sustainability topics across the economic, environmental, people, and social aspects. The results were used to determine the Company's material topics and were subsequently reported to the Corporate Sustainability Committee and the board of directors. For each material topic, the Company has established short-, medium-, and long-term objectives, management approaches, and implementation achievements, and has disclosed them in accordance with the GRI Standards to help stakeholders better understand the Company's overall sustainability performance.

Material Topics Analysis and Ranking

	Collect sustainability issues With reference to international sustainable development trends, material topics in the domestic and foreign financial and insurance industries, as well as in line with the latest regulations, standards, disclosure regulations, and the strategic development direction of the parent company SKFH, we compiled a total of 20 sustainability issues, including 4 environmental, 8 social, and 8 governance issues.
	Identify stakeholders Following the five major principles of the "AA1000 Stakeholder Engagement Standard" including dependency, responsibility, tension/concern, influence, and diverse perspectives, we distributed questionnaires within the Company to collect individuals or groups that have benefited or may be affected by the Company's economic activities. Based on the survey results and the overall assessment of financial peers, SKL identified seven stakeholder groups based on materiality: employees, customers, shareholders/investors, partners, suppliers, government agencies, and the general public.
	Assess Stakeholder Levels of Concern Sustainability issues of concern to stakeholders are one of the important principles for determining material topics. We distributed questionnaires on "level of concern of stakeholders" to seven stakeholder groups to investigate level of concern of each stakeholder to sustainability issues. A total of 374 questionnaires were collected.
	Assess the degree of impact on operations (Financial materiality) To identify the degree of impact of sustainability issues on corporate operations, we distributed questionnaires on "degree of impact on operations" to department heads and employees of each task force of the Corporate Sustainability Committee, and investigated the internal impact of sustainability issues on the Company's revenue, costs, and risks. A total of 362 questionnaires were collected.
	Assess the degree of impact on sustainable development (Impact materiality) To understand the degree of external impacts caused by corporate operations, SKL referenced the economic, environmental, and social impact assessment methodology developed by institutions such as the Value Balancing Alliance (VBA) and Harvard Business School's "Impact-Weighted Accounts", and defined 18 positive and negative impacts. We distributed questionnaires on "degree of impact on sustainable development" to the members of each task force of the Corporate Sustainability Committee to investigate the possibility of positive and negative impacts of the Company's operations on the economy, environment, and people (including human rights) and the stage of the value chain in which the impacts occur. A total of 14 questionnaires were collected and 10 significant impacts were identified.
	Analyze and Rank Material Topics Based on survey outcomes across three dimensions, Stakeholder Level of Concern, Operational Impact, and Sustainability Impact, the Company identified 11 material topics. These topics were subsequently evaluated and prioritized in alignment with our short- and long-term strategic focuses and their respective materiality levels.
	Confirm Material Topics The executive secretary submitted the analysis process and results to the Corporate Sustainability Committee and the Board of Directors. The completeness of material topics was confirmed by the directors, President and senior executives. For each confirmed material topic, SKL has established corresponding long-term objectives, which have been approved by both the Corporate Sustainability Committee and the board of directors. Through clearly defined action strategies, SKL responds to stakeholder expectations and advances its commitment to sustainable development.

Material Topics Matrix

The 11 material topics were mapped out in a matrix based on the three dimensions of "level of concern of stakeholders", "degree of impact on operations", and "degree of impact on sustainable development" to highlight the impact and level of concern of each material topic.

Environmental Topics

Social Topics

Governance Topics

• Note: The size of the bubble indicates the level of concern of stakeholders.

Material Topics Impact Boundaries and Management Approaches

Material Topics	Implications for and Impact on SKL
Business performance	SKL values the rights and interests of shareholders and stakeholders and develops meticulous operational strategies and directions to achieve long-term stability and profitability, bringing positive impacts to stakeholders and the financial market.
Corporate governance and ethical management	SKL places great emphasis on corporate governance and integrity, implementing comprehensive education and training programs and standards. We have established robust corporate governance and risk management mechanisms to gain public trust towards the Company. These efforts have a positive impact on the operations and business activities from an economic perspective.
Legal compliance	We have built a comprehensive legal compliance management and oversight framework and reviewed the compliance level of each department. We conduct regular training and education to enhance the legal compliance awareness of all employees, reducing operational risks and the risk of penalties to achieve positive impact on the economy.
Risk management	For the main risks faced in insurance industry, major global political and economic issues, environmental issues, and emerging risks, we have assessed the degree of impact of each risk and established relevant risk management regulations and guidelines. Through the implementation of Business Continuity Management Systems (BCMS), we have strengthened our ability to respond to and recover from major events, safeguarding the interests of customers and all stakeholders, which has a positive impact on the economy and society.
Customer relations and service quality	SKL practices ethical management and promotes a financial-friendly environment, ensuring that all customer services comply with laws and regulations in order to reduce operational and penalty risks. Through satisfaction, NPS surveys, and communication channels of all parties, we understand customer pain points and continuously improve the efficiency of customer relationship management. These efforts have a positive impact on the economy and society.
Innovation and digital finance	SKL adopts a user-centric design approach. We continuously enhance our offerings in response to policyholder needs, societal changes, advancements in underwriting technology, and product development. We strive to provide a wide range of insurance services and digital technologies that cater to these factors. Moreover, we collaborate with government agencies, academic institutions, and social enterprises to deliver diverse digital services to the public, thereby making a positive impact on society and the economy.
Information security and privacy	We commit to providing customers with a sense of security and continuously promote a culture of information security, mitigating the risks of improper data usage and privacy violations, to achieve positive impact on business operations and human right.
Talent recruitment and retention	SKL values talent recruitment to infuse new energy and vitality into the organization. We help employees develop clear career directions and achieve optimal utilization of human resources, ensuring a talent development strategy for the sustainable development of the organization. This has a positive impact on employees and social aspects, including human rights.
Sustainable finance	We enhance sustainable finance policies and regulations, and promote inclusive and sustainable economic growth. We assist in industry transformation towards sustainable development. By strengthening engagement with our investees, we exert a positive influence on environmental, social, and human rights aspects.
Financial inclusion	We leverage on our professional competencies, expand financial coverage, and provide diverse friendly financial products and services to ensure that all groups enjoy basic, equal, and reasonably convenient financial services, thereby exerting a positive impact on the economy and society.
Actions for climate change	While climate change may cause an impact on corporate revenue, it also presents opportunities for industry transformation. We have implemented the TCFD framework, set carbon reduction targets and implemented measures to reduce our operational carbon footprint. Furthermore, we utilize our financial resources to facilitate low-carbon transformation of the industry. These efforts allow us to leverage our financial influence and contribute positively to both the environment and the economy.