Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 34

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 34
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 for insurance products in the market, the availability and pricing of comparable products offered by other insurance companies,
and the end consumers themselves. In addition, premium rates for certain auto eInsurance products that each automobile owner in the PRC
is legally required to purchase, are tightly regulated by the CBIRC. As a result, we may experience downward pressure on our commissions
from time to time.

On the other hand, we engage
external referral sources in different geographical areas to promote insurance products, and pay referral fees to them for referring end
consumers to us. We may adjust the rates of referral fees at our discretion, depending on the competitive landscape and market conditions
in the respective geographical markets. Accordingly, any increase in such rates would reduce our profit margin.

Because we do not determine,
and cannot predict, the timing or extent of premium or commission rate changes, we cannot predict the effect any of these changes may
have on our operations. Any decrease in premiums or commission rates we receive, and/or any increase in the rates of referral fees we
pay to our external referral sources, could significantly affect our profitability. In addition, our capital expenditures and other expenditures
may be disrupted by unexpected decreases in revenue caused by decreases in premiums or commission rates, thereby adversely affecting our
operations and business plans.

The insurance business is historically cyclical
in nature, and there may be periods with excess underwriting capacity and unfavorable premium rates, which may negatively affect SunCar’s
overall revenues. SunCar also plans to further develop new insurance products narrowly tailored to the new trend in the car industry,
but there is no guarantee that such innovation will receive positive feedback from the market or bring more revenues to SunCar.

The insurance business is
historically cyclical in nature. Such fluctuations in our operating results could be due to a number of other factors, many of which may
be outside of our control, including the severe control from CBIRC, competition between insurance companies, frequency, and severity of
catastrophic events, levels of capacity, adverse litigation trends, regulatory constraints, general economic conditions, and other factors.
The supply of insurance is related to prevailing prices, the level of insured losses, and the level of capital available to the industry
that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance industry. As a result,
the auto insurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive
underwriting capacity, as well as periods when