GROUPAMA / 2018 Registration document

EARNINGS AND FINANCIAL POSITION MANAGEMENT REPORT OF THE BOARD OF DIRECTORS

Economic operating income (in millions of euros)

31.12.2017

31.12.2018

Change in value

Change %

Property and casualty insurance – France

59

59

0

NA

Life andhealth insurance – France

221

252

31

13.8%

TotalInsurance – France

280

310

30

>100%

Property and casualty insurance – International

43

13

(30)

-69.5%

Life andhealth insurance – International

41

30

(11)

-26.7%

TotalInsurance – International

84 32

43 34

(41)

-48.5%

Banking and financialbusinesses

3

9.2%

Holding activities

(46)

(89)

(43)

93.6%

Total– Groupama

349 102

298

(51)

-14.5%

Property and casualty insurance

72

(30)

NA

Life andhealth insurance

262

282

20

7.5%

The Group’s economic operating income totalled +€298 millionat 31 December 2018 compared with €349 million at 31 December 2017. Economic operating income from insurance was +€354 million in 2018, down -€10 millioncomparedwith 2017. Economic operating income from life and health insurance totalled +€282 millionin 2018 versus +€262 millionin 2017 (+€31 millionin France and -€11 million internationally). In France, this increase was mainly due to the improved technical margin with a net combinedratio of the health and personal injuryactivities improving by -0.8 pointsto 96.2%. In property and casualty insurance, economic operating income amounted to +€72 million compared with +€102 million at 31 December 2017 (stable in France and down -€30 million internationally).The net non-life combined ratio was thus 99.3% in 2018 versus 98.9% in 2017 (+0.4 points). This change is due to the following: attritional lossexperienceof 59.9% (+1.3 points); ❯ an increase in the cost of serious claims (+0.8 points): ❯ +1.2 points inFrance and -1.4 pointsinternationally; a decrease in the cost of weather claims (-2.3 points) after a ❯ 2017 affected by Hurricanes Irma and Maria in the Caribbean. Due to the nature of the claims (few very major weather claims), reinsuranceprotectionwas lower in 2018 than in 2017, resulting in a worsening netreinsurance cost;

the favourableeffect on other technicalreservesand changeson ❯ prior affairs, partly tied to a naturalchange in cases and partly to regulatorydevelopments(ANC, Gazette du Palais), the effect of whichwascontraryandslightlyfavourable; the favourable impact in the other technical reserves, in ❯ particularthe ANCreformon the actuarialreserves for annuities. Banking and financial businesses contributed +€34 million to the Group’s economic income in 2018. The Group’s holding activity posted economic operating income of -€89 million in 2018, comparedwith a loss of -€46 millionin 2017. The Group’s net income totalled +€450 million at 31 December 2018 compared with +€292 million at 31 December 2017. The 2018 result includes notably an increase in the non-recurring financial margin (+€78 million), benefiting mainly from the increase in capital gains realised due in particular to the sale of a property in La Défense. The 2018 income also includes: the result from divested activities of -€2 millionfollowing the sale ❯ of Portuguesesubsidiaries; tax expenses mainly related to the gradual reduction of the tax ❯ rate in France amounting to -€21 million; other non-recurring expenses related to various projects ❯ amounting to -€10 millionas well as the equity-methodresult of Orange Bank for -€59 million (versus -€35 millionin 2017).

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES