GROUPAMA / 2018 Registration document

7 FINANCIAL STATEMENTS

ANNUAL FINANCIAL STATEMENTS AND NOTES

NOTE 10

SUBORDINATED LIABILITIES

“Subordinated liabilities”, which stood at €2,732.5 million at 31 December 2018, is detailedas follows: a perpetual subordinateddebt in euros issued in May 2014 at a ❯ fixed rate of 6.375% until the first call date for a Par value of €1,100 million, with the possibility for Groupama Assurances Mutuelles to apply anearly redemption from May 2024; TSR issued in October 2009at a fixed rate of 7.875%, revisable ❯ in October 2019,with a term of thirty years and a nominal value of €500 million;

TSR issued in January 2017for a nominal value of €650 million ❯ at a fixed rate of 6% over a period of ten years. The nominal difference remaining to be amortised at 31 December 2018 is €12.3 million; TSR issued in September 2018 for a nominal value of ❯ €500 millionat a fixed rate of 3.375% for a 10-year term and for which the issue premium is recorded as a deduction from the nominal value issued and amortisedon a straight-linebasis over the life of the bond.

NOTE 11

TECHNICAL RESERVES OF NON-LIFE INSURANCE

Breakdown of gross technical reserves

Note 11.1

31.12.2018

31.12.2017

Inward reinsurance from regional mutuals

Inward reinsurance from regional mutuals

Pool and CDA  (1)

Other inward reinsurance

Pool and CDA  (1)

Other inward reinsurance

Total

Total

(in thousands of euros)

Reserves forunearned premiums 10,214 190,110 142,920 343,244

10,166 180,101 141,347 331,614

Reserves forclaims

324,382 2,732,436 1,303,901 4,360,719 582,581 2,559,198 1,285,532 4,427,310

Reserves forprofit sharing

196

196

0

266

266

Equalisation reserves

2,750

68,817

51,894 123,461

2,946

69,903 124,877 197,726

Other technical reserves

89,693 935,995 103,649 1,129,337

96,428 948,997 122,058 1,167,483

TOTAL

427,039 3,927,358 1,602,560 5,956,958 692,120 3,758,199 1,674,080 6,124,400

Including technical reserves related to contracts written by the Antilles-Guyane regional mutual exempt from licensing. (1)

MEASUREMENT OF RESERVESFORNON-REPORTED ANDLATECLAIMS(IBNR) Outstanding claims reserves totalled €4,360 million at 31 December2018. These reserves are valued on the basis of an actuarial approach, defined in accordance with a group methodology. By means of valuations of final costs based on payment triangles or costs (by risk segment), this method permits a determination of the sufficient amount of outstanding claims reserve. This valuation incorporates the valuation of delinquent claims andexpected recoveries into its approach. The total amount of reserves relating to long-term care risk stood at €384.2 million at 31 December 2018 (including €272.5 million for the reserve for increasing risks). The actuarial reserves for annuities in service and outstanding claims reserve, covering outstanding claims, were determined based on experience data from the long-term care portfolio – law on long-term care – and a technical rate of 0.62% (75% TME). Reserves for increasing risks, LONG-TERMCARE

covering future claims (likely present value of the commitmentsof the insurer and the insured) were determined on the basis of experiencedata from the long-termcare portfolio– law on death of able-bodiedpeople, laws on impact differentiatedby product, and law on long-term care – and a technical rate of 0.90%, aiming to reflect the current financial environment. A sufficiency test of the long-term care reserves, including any anticipations of tariff revisions is conductedeach year. EQUALISATIONRESERVES Groupama Assurances Mutuelles recorded an allocation to equalisation reserves of €3.2 million as of 31 December 2018 as well as a stability fund reservewriteback of €77.4 million. “Equalisationreserves” includes stability funds on group insurance policies for a total of €36.6 million at 31 December 2018 versus €117.5 millionin 2017. This change is mainly due to the change in the quotashare agreement withGan Assurances.

312

REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES