GROUPAMA / 2018 Registration document

EARNINGS AND FINANCIAL POSITION MANAGEMENT REPORT OF THE BOARD OF DIRECTORS

Activity in life and health insurance (€59 million) increased +7.1%, mainly due to the growth of the individual health segment (+16.2% due to price increasesrelated to inflation). The decline of the group protection insurance segment (-4.8%) was the result of the termination of the distribution agreement with the TKK agricultural cooperatives network. It was mitigated by the increase in the individual savings/pensionsactivity as a result of the launch of a new product. Economicoperating income for the Turkish subsidiariesGroupama Sigorta and Groupama Emeklilik represented a profit of +€10 million at 31 December 2018 compared with +€7 million at 31 December 2017. The combined ratio of the property and casualty insurance business increased by +0.8 points to 112.2% as of 31 December 2018 with a loss experience up 2.2 points at 53.1%. This change was due in particular to a worsening of the average cost of motor vehicle damage claims resulting especially from inflation and an unfavourableexchange rate (increase in costs of spare parts). The operating cost ratio worsened (+0.2 points to 21.8%) due to the decrease in earnedpremiums. The underwriting result in life and health insurance was down due to the reinforcement of reserves in the protection insurance segment (borrower credit). The recurring financial margin benefited from higher rates of return. The net income of the Turkish subsidiaries totalled +€16 million at 31 December 2018 compared with +€8 million at 31 December 2017. This result includes the capital gain from the sale of the pension fund activityfor a net amountof €5 million. Greece (c) Groupama Phoenix’s premium income increased +5.3% comparedwith the previousperiod to €139 millionat 31 December 2018. However, the changes were contrasted according to the segments. The property and casualty insurance business was up +9.4% at €86 million. The passenger vehicle industry (almost 70% of property and casualty insurance premiums) grew +12.7% due to the expansionof the portfolio in number of policies, in particular as a result ofnew agreements withbrokers. Life and health insurance premium income decreased -0.9% to €52 million. The growth posted by the group retirement segment (+16.5%, in connection with the development of major policies) was offset by the decline in individual savings/pensions (-53.7% due to the decrease in UL premium income), which continued to be affected thecapital controls inforce inGreece. Economic operating income representeda profit of +€10 millionat 31 December 2018(versus +€9 millionat 31 December 2017). The combined ratio in property and casualty insurance amounted to 86.0%, up +0.7 pointscomparedwith 31 December2017. This change is explained by the increase in current loss experience in motor liability claims, while the fire insurance segment saw a

decrease in the frequency of serious claims. The operating cost ratio decreased -0.5 points to 45.7% as of 31 December 2018, reflecting the streamlining of structural costs incurred by the subsidiary. The technical result in life and health insurance decreased slightly, particularly inlife insurance(individualprotection insurance). The recurring financial margin net of profit sharing was slightly higher. Net income was a profit of +€10 million at 31 December 2018 versus +€11 millionat 31 December2017. This result includes the impact of the decrease in the tax rate (expense of -€2 million on a tax receivable) and a capital gain on the sale of real estate (+€2 million). Hungary (d) Premium income of the subsidiary GroupamaBiztosito in Hungary increased +4.7% to €355 million at 31 December2018. Property and casualty insurancewritten premiumswere up +7.4% at €167 million at 31 December 2018. The development of the portfolio (particularly thanks to the network of brokers) and price increases explain the growth of the passenger vehicle segment (+15.9%). The business property damage segment posted growth of +15.5%, mainly due to the launch of a new product and price adjustments.The fleets segment increased +11.2%. However, the decline in the agricultural segment (-23.0% in connection with the cleaningof the portfolio)hampered these good performance levels. In life and health insurance, premium income amounted to €188 million, an increase of +2.4%, driven by the growth in the individual protection segment (+10.8%). Individual savings/pension business increased +0.9%. The subsidiary’sLife/Savingspremium income continued to consistof 87.8%UL policies. Economic operating income amounted to +€26 million at 31 December 2018 compared with +€11 million at 31 December 2017. The net combined ratio for property and casualty insurance decreased by -6.5 points to 97.3% at 31 December 2018. The gross loss experience decreased (-9.4 points to 45.8% at 31 December 2018) due to an overall exceptional loss (attritional, serious, and weather). The operating cost ratio decreased by -0.3 points to 47.7%, confirming the subsidiary’s control of expenses. The technical result in life and health insurance remained stable at +€8 million as of31 December 2018. The recurring financial margin net of profit sharing washigher. The Hungarian subsidiary’s net income amounted to +€23 million at 31 December 2018 compared with +€15 million at 31 December2017. The non-recurringfinancial margin decreased due to the adverse effect of the change in fair value of investments passing throughprofit or loss.

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES

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