GROUPAMA / 2018 Registration document

RISK FACTORS AND RISK MANAGEMENT RISK MANAGEMENT AND SENSITIVITY ANALYSES

Managing counterparty risk (c) Internal procedures stipulate that any over-the-countercontract is systematically covered by guarantee contracts with the banking counterparties in question. This systematic collateralisation of the hedging transactions significantly reduces the counterparty risk related to these over-the-countertransactions.

may be held directly or in OPCI or SCI form. Property assets can be split into: investment properties representing 1.26% of total financial ❯ investments; operating properties representing 0.47% of total financial ❯ investments. Group risk management (b) Property assets are managed by the Group within a framework of internal constraints with a limit setting the maximum permissible exposureto property risk. The limits are defined at the level of each insuranceentity and at the Group level. Any exceedingof the limits is handled according to whether it is part of an entity or the Group by the corresponding Risk Committees. Within the constraints system and concerning investment risk especially, the property commitment committee decides on the property budget as a whole and on acquisition, restructuring,and development works projects beyond predefined amounts. Summary of sensitivity to market 5.2.3.6 risks analyses The following table shows all the sensitivity to market risks analyses for fiscal years 2018 and 2017, broken down by group’s equity and income, excludingprofit sharing andtaxes.

Risk on property assets 5.2.3.5 Type ofand exposureto property risk (a)

Exposure to property markets makes it possible to capture the performance of these markets (investment property) and benefit from premises for its operating needs (operating properties), but it also exposes companies to three main types of risks: the investment risk generated by property restructuring ❯ operations; the accountingreservingrisk in case of a realisableamount (sale ❯ price net of disposal costs or value in use) that is lower than the net book value; the commercial risk brought about by the reserving risk insofar ❯ as policyholder compensation could be impacted by the aforementioned reserving. The weight of property assets out of total financial investments (including operating property) was 1.73% in market value. They

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31.12.2018

31.12.2017

Up fluctuation in sensitivity criteria

Down fluctuation in sensitivity criteria

Up fluctuation in sensitivity criteria

Down fluctuation in sensitivity criteria

Shareholders’ equity

Income (Loss)

Shareholders’ equity

Income (Loss)

Shareholders’ equity

Income (Loss)

Shareholders’ equity

Income (Loss)

(in millions of euros)

Interest rate risk

(550)

72 87

602

(77)

(560)

117

617

(131)

Underwriting liabilities

(93)

76

(91)

Financial investments

(550)

(15)

602

16

(560)

41

617

(40)

Financing debt Equitiesrisk

59 59 35 35

10 10

(59)

(10)

57 57 34 34

19 19

(57)

(19)

Financial investments

(59)

(10)

(57)

(19)

Foreignexchangerisk

(35)

(34)

Financial investments

(35)

(34)

As a reminder, the sensitivitycriteria appliedwere the following: up or down fluctuation of 100basis points, forinterest rate risk; ❯

up or down fluctuation of 10% in the stock market indices, for ❯ stock risk;and up or down fluctuationof 10% in all currenciesagainst the euro, ❯ for exchangerate risk.

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES