GROUPAMA / 2018 Registration document

EARNINGS AND FINANCIAL POSITION MANAGEMENT REPORT OF THE BOARD OF DIRECTORS

Premium income for Gan Assurances remained stable at €1.280 billionat 31 December2018, the price increases offsetting the decrease in the number of policies in the portfolio. The good performance of the home insurance (+1.1%) and agricultural insurance (+2.3%) segments compensated for the decline in the fleet insurance segment (-4.1%). At 31 December2018, Amaline’s property and casualty insurance premium income grew +7.3% to €71 millionunder the effect of the portfolio’s growth in number (+13,700 policies). The passenger vehicle segmentbenefitedfrom the developmentof the partnership with Renault and posted an increase of +4.1%. The home insurance segment was up +14.6%. Groupama Assurance-Crédit et Caution posted premium income of €41 million at 31 December2018, up +3.0% from the previous period.

Mutuaide Assistance’s premium income at 31 December 2018 was up +19.1% at €171 million. This change was notably related to the development of new business (including the contribution of new policies by brokers in travel insurance), the increase in activity with a major partner, and the growth on assistancepolicies tied to bank cards. Société Française de Protection Juridique premium income grew by +0.9% to €117 million as of 31 December 2018 due to the development of partnerships (particularlyLa Banque Postale). Economic operating income in property and casualty insurance in France remained stable at €66 million in 2018. It is presented as follows:

Property and casualty insurance in France (in millions of euros)

31.12.2017

31.12.2018

2018-2017 change

Gross earned premiums

3,334

100.0% 3,377

100.0%

44

1.3%

Underwriting expenses (policyservicing) –  excluding claims management costs

(2,404)

-72.1% (2,072)

-61.4%

332

13.8%

Reinsurance balance

31

0.9%

(278)

-8.2%

(309)

<-100%

Technical margin net of reinsurance

961

28.8% 1,027

30.4%

66

6.9%

Net expenses from currentunderwriting operations

(967)

-29.0%

(975)

-28.9%

(8)

-0.8%

6

Underwriting incomenetof reinsurance

(6) 56

-0.2%

52 68

1.6%

59 12

>100%

Recurring financialmarginnetof tax

1.7%

2.0%

20.5%

Other items

(42)

-1.3%

(54)

-1.6%

(12)

-29.6%

Economicoperating income

8

0.3%

66 39

2.0%

58 15

>100%

Capital gains realisednet of corporate income tax

23

0.7%

1.1%

65.5%

Allocations to reserves for long-term impairment net of corporate income tax Gainsor losses on financialssetsrecognised at fair value netof corporate incometax

2

0.1%

(4)

-0.1%

(6)

<-100%

Other operations netof corporate income tax

(23)

-0.7%

(17)

-0.5%

6

24.6%

GROUP NET INCOME

11

0.3%

84

2.5%

73

>100%

In France, net underwriting income (gross premiums earned – gross underwritingexpenses– net expenses from current underwriting operations and reinsurance balance) was up +€59 millionover the period. This stemmed from the improvement of -1.7 points in the net combined ratio to 98.5% in 2018. Fiscal year 2018was marked by numerous serious claims, while, conversely, the cost of weather events was lower than in 2017 (affected by Hurricanes Irma and Maria in the Caribbean) but not covered as well by reinsurance.The favourablechange in reserves releases onprevious years partiallycompensatedfor these adverse trends. The net loss ratio in property and casualty insurance (69.6% in 2018) thus improved by -1.6 points. The operating cost ratio improved by -0.1 points to 28.9% in 2018.

The following keyitems should benoted at 31 December 2018: the combined ratio of Groupama Assurances Mutuelles, the ❯ Group’s internal reinsurer, worsened (+1.2 points to 97.9%). This was caused by the increase in the net loss experience (+0.3 points to75.7%) and operatingexpenses (+0.9 to 22.2%); underwriting income for Gan Assurances in property and ❯ casualty insurancewas up €87 millioncomparedwith 2017. The improvement of the net loss experience (-7.1 points to 72.6%) conceals a deterioration of the current loss experience due to the significant of the serious and weather claims (+3.3 points and +3.7 points respectively). Conversely, reserves releases on prior years made good progress, notably with surpluses in construction and motor liability insurance. The operating cost ratio was up +0.4 pointsat 30% in 2018, particularly due to the increase incommissions;

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES