AUB Group Limited Annual Report 2023

DIRECTORS’ REPORT YEAR ENDED 30 JUNE 2023

KEY BUSINESS RISKS (CONTINUED)

Partnering and Outsourcing AUB failing to identify, develop and manage Broker partnerships and third party relationships to best deliver the long term strategy Risk Description Inability to identify, onboard and effectively manage insurers and third parties by AUB may result in missed opportunities, financial losses, inability to deliver the strategy, reputation damage and increased concentration risk.

2023 Commentary

Management and Mitigation

An important part of AUB’s business model and its growth strategy is to acquire and hold equity in insurance broking, underwriting agency or risk services businesses. These relationships are a significant contributor to AUB Group success. Failure to manage these relationships effectively could lead to reduced revenues, increased costs and an inability for AUB Group to deliver its strategy. Third Party Risk AUB utilises third party suppliers to bring external expertise and support to the business. Insufficient or uncommercial contractual arrangements may impact the Group’s ability to maintain efficiency and ensure third parties meet their obligations. The risks associated with engaging third parties include reputational damage, operational disruption, and risks to AUB’s compliance with laws and regulations.

Specific mitigation actions include: – Contract development and review approach;

– Third party Service Level Agreements (SLAs)/Key Performance Indicators (KPIs) embedded in contracts and monitored; – Partner Development Manager Roles; and – Delegations of authority are in place, outlining who can bind AUB into agreements.

People AUB relies on the recruitment, retention and engagement of skilled personnel.

Risk Description Ineffective recruitment, retention and engagement of skilled/key personnel, or failure to appropriately manage work health and safety, may result in AUB being unable to operate efficiently and effectively, leading to potential financial and reputational impacts and inability to successfully execute its strategy.

2023 Commentary

Management and Mitigation

A loss of key personnel by AUB may lead to material business interruption and loss of key customer or partner relationships. AUB also relies on the need to be able to attract staff with the right experience and expertise to assist AUB with successful execution of its strategic priorities and growth plans. Particularly given the presently competitive labour market, there can be no certainty that AUB will be able to attract the people it desires. Skilled/key personnel may include key persons noted on Binder Authorities, Responsible Managers as noted on AFSL’s, incumbents in key roles or individuals who hold business critical knowledge.

Specific mitigation plans include – Succession plans and review approach; – KPI setting and performance reviews; – Regular monitoring of staff hours and skills gaps to identify recruitment needs; – Workforce planning including recruitment and employee development plans to assist achieve the organisation’s future goals and keep talent engaged; and – Use of employee engagement surveys and anonymous feedback to be pro-active in employee satisfaction, work-life balance, and mental health.

AUB GROUP ANNUAL REPORT 2023

24