GROUPAMA / 2018 Registration document

FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

The shared future arrangement introduced between the regional mutuals and Groupama Assurances Mutuelles also contributes to certain specific expenses in expanding insuranceportfolios (project financing,experimentation,joint ventures, etc.)once those projects become part of the Group’s strategy and have the potential to be replicated throughout the regional mutuals, as quota share reinsurance gives Groupama Assurances Mutuelles the means to contribute to thefuture resultsof the portfolios thus expanded. This reinsurancerelationship is designed to continue over the long term, and the duration of the reinsurance agreement between GroupamaAssurancesMutuellesand the regional mutuals is equal to that of Groupama Assurances Mutuelles itself, which, unless extended, will expire in 2086. Any modifications to the agreement must be made via a consensus-baseddecision-makingprocess, whereby final approval lies with the Groupama Assurances Mutuelles Board of Directors, after receiving the recommendation of the Audit andRisk ManagementCommittee. This reinsurance relationship has led to a powerful community of interests between the regional mutuals and GroupamaAssurances Mutuelles. On the one hand, the regional mutuals have a vital interest in preserving the economic and financial balance of their exclusive reinsurer. On the other hand, Groupama Assurances Mutuelles has a major interest not only in the economic and financial balance of the mutuals, but also in their growth, in which it participates in proportion to the non-life insurance business transferred. The reinsuranceagreementis described inmore detail at § 2.1. Groupama Assurances Mutuelles and the regional mutuals enjoy business relationships through various subsidiaries of Groupama Assurances Mutuelles. The role of these subsidiaries is either to offer products or services designed for membersand customers in the areas of insurance, banking or services, or to provide financial resources to theentities of the Group. These business relationships are governed by a principle of preference for the Group up to and including exclusivity, which is based on the interest of the regional mutuals in meeting their needs for products or services and in achieving a return on the investments made in the subsidiaries through Groupama AssurancesMutuelles. The preferential nature of these relationships is laid out in an agreement approved by the Groupama Assurances Mutuelles Board of Directorsin its meetingof 14 December 2005. Under that agreement, the respective commitmentsof Groupama AssurancesMutuellesand the regional mutuals are: Groupama Assurances Mutuelles shall ensure that the ❯ subsidiaries offer products or services that meet the needs of the market ( i.e., products or services designed for members or customers) or the needs of the entities of the Group ( i.e., Business relationships between the subsidiaries of Groupama Assurances Mutuelles and the regional mutuals in the areas ofinsurance and services 1.2

financial services designed for the Group entities) and that are competitive compared to the products offered by competing companies in terms ofprice andquality of service; the regionalmutuals agree to thefollowing: ❯ concerning the subsidiaries offering products or services ■ designed formembers andcustomers: not to distribute, under any circumstances, competing - third-party products orservices, to distribute the products or services of the life insurance - and employee savings subsidiaries, to distribute the services of the non-life insurance - subsidiaries or those of the insurance-related services subsidiaries if they themselves do not offer those services and decide to outsourcethem, concerningsubsidiariesoffering financial services designedfor ■ the Group entities: to give preference to those subsidiaries in terms of equal - price andquality of service. The creation and growth of subsidiariesoffering insurance services or related services to members and customersof the Group are in response to the need for the regional mutuals, whose main business is limited by law to non-life insurance,to have a full range of financial services to offer while sharing amongst themselves through Groupama AssurancesMutuelles the investment required to create andrun a profitable subsidiary. Such is the case for the life insurance products of GroupamaGan Vie, the services offered by Groupama Épargne Salariale and a number ofservice subsidiaries (Mutuaide, CapsAuto, FMB, etc.). It is in the interests of Groupama Assurances Mutuelles to make these investments, for three reasons: owing to their intrinsic return going forward; ❯ owing to the communityof interests between it and the regional ❯ mutuals because of reinsurance, Groupama Assurances Mutuelleseither benefits or suffers from any progressor setback in the position of the regional mutuals in the non-life insurance market. It is therefore in its direct interest for the regional mutuals to have a competitive offering in other sectors of the market (life insurance, financial services, etc.)so it can be on an equal footing with the other general insurance companiesactive in the market or withbancassurance companies; the investments made in those subsidiaries enable the ❯ subsidiaries of Groupama AssurancesMutuelles distributing the Gan brand to have a services offering as well; such is the case of retail banking, employee savings, insurance-related services, etc. It should be noted that until October 2016,GroupamaAssurances Mutuelles held 100% of the capital of Groupama Banque, whose retail banking offer was marketed by the regional mutuals. Since October 2016,GroupamaAssurancesMutuelles holds only a 35% stake in Groupama Banque, now Orange Bank. The regional mutuals continue to distribute the retail banking offering of this Groupama Assurances Mutuelles investment.

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES