GROUPAMA / 2018 Registration document

7 FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

The reconciliationwith the theoretical statutorytax is as follows:

31.12.2018

31.12.2017

Consolidated income (losses) before tax

Consolidated income (losses) before tax

Theoretical tax rate

Theoretical tax rate

(in millions of euros)

current tax: 34.43%

France

423

deferred tax: 32.02%

31

34.43%

Bulgaria

1

10.00%

1

10.00%

China

4

25.00%

6

25.00%

Greece

15

28.00%

13

29.00%

Hungary

25

9.00%

17

9.00%

Italy

(54)

30.82%

52

30.82%

Portugal

(2)

22.50%

Romania

2

16.00%

10

16.00%

United Kingdom

19.00%

13

19.25%

Tunisia

1

30.00%

1

30.00%

Turkey

21

22.00%

(47)

20.00%

TOTAL

438

94

The theoreticaltax rate applicable in France remains at 34.43%on gradual decline in the projected corporate tax rate to 25.82% by current tax and stands at 32.02% on deferred tax. On the France 2022. scope, deferred taxes were determinedby taking into account the The theoreticaltax ratesremained stable over theperiod.

RELATED PARTIES NOTE 44

General presentation 1 Groupama Assurances Mutuelles and its subsidiaries maintain close, long-lasting economic relationships with the regional mutuals.These relationshipsfocus mainly onthe reinsuranceof the regional mutuals by Groupama Assurances Mutuelles, and, to a lesser degree, on business relationships amongst the subsidiaries of Groupama Assurances Mutuelles and the regional mutuals in the areasof insurance,banking, andservices. Premium income earned by Groupama AssurancesMutuelles and its consolidated subsidiaries through the network of regional mutuals comes mainly from Groupama AssurancesMutuelles and Groupama Gan Vie. Based on these two entities, the contribution of the network of regional mutuals to consolidated premium income totalled €3,138 million, or 30% of total consolidated premium incomefor 2018. The resulting economic inter-dependence led the Group’s two major divisions to enter into agreements to protect the security of the entityas a whole. 1.1 Regional mutuals are required by law to obtain reinsurance exclusively from Groupama Assurances Mutuelles. Reinsurance

This requirementis laid down in the bylaws of the regional mutuals. This reinsuranceexclusivityengendersfinancial solidarity over time, resulting in a transfer of a substantial proportion of the non-life insurance business from the regional mutuals to Groupama AssurancesMutuelles. The reinsurance relationship is based on the principle of “shared future” between the regional mutuals as ceding companies and their reinsurerGroupamaAssurancesMutuelles.The principle aims to ensure that over the long term, there are neither winners nor losers between cedingcompaniesand their reinsurer. Implementing this principle means a major use of quota share reinsuranceand the reinsurer’sparticipationin the direct insurance managementdecisionswhich determine the financial return for the whole. Thus, Groupama Assurances Mutuelles either helps to draft the technical terms and conditions for direct insurance, particularly regarding rates, or else it drafts those conditions itself depending on the nature of therisks being reinsured. In addition,GroupamaAssurancesMutuellesmay participatein the handling of any claims file and jointly manages any claim with an estimated cost that exceeds certain thresholds. Also under the reinsuranceagreement,there is a certain number of mechanisms forquickly rectifying any imbalances.

274

REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES