GROUPAMA / 2019 Universal Registration Document

6 EARNINGS AND FINANCIAL POSITION Management report of the Board of Directors

mainly by the growth of health insurance(individualand collective: +2.8%) and municipal staff insurance (+11.0%). International life and health insurancepremiumincomewas down -0.4%due to the decline in individual savings/pensions(-2.9%), although the good performance of the health insurance segment (individual and group: +13.7%)dampened this trend.

Insurance premium income in France represented 76.3% of the Group’s overall business over the period, whereas international insurance premium income amounted to 22.1% of total premium income. The Group’s other businesses (financial businesses) represented 1.6% of total premium income. Net banking income from these businessesamounted to €152 millionat 31 December 2019.

Economic operatingincome (in millions ofeuros)

31.12.2018

31.12.2019 Change in value

Change%

Propertyand casualty insurance –France

66

197

131

>100%

128

186

58

45.3%

Life and health insurance –France

Total Insurance –France

194

383

189

97.4%

Propertyand casualty insurance –International

13

(110)

(123)

<-100%

Life and health insurance –International

30

14

(16)

-53.3%

Total Insurance –International

43

(96)

(139)

<-100%

Bankingand financialbusinesses

34

38

4

11.8%

Holding activities

(89)

(91)

(2)

-2.2%

Total –Groupama

182

234

52

28.6%

Propertyand casualty insurance

79

87

8

10.1%

Life and health insurance

158

200

42

26.6%

The Group’s economic operating income totalled €234 million at 31 December 2019 compared with €182 million at 31 December 2018. Insurance economic operating income amounted to +€287 million in 2018,up €50 million compared with 2018. Economic operating income from life and health insurance totalled +€200 million in 2019, an increase of €42 million over the period (+€58 million in France and -€16 million internationally).In France, this increase was mainly due to the improved underwritingmargin with a net combinedratio of the health and personal injury activities improving by-1.9 points to 98.8%. In property and casualty insurance, economic operating income amounted to +€87 million compared with +€79 million at 31 December 2018 (+€131 million in France and -€123 million internationally).The net non-life combined ratio was thus 98.5% in 2019 versus 100.1% in 2018 (-1.6 points).This differenceis related to a change in the estimation in the IFRS financial statements correspondingto the expansion of the discount of non-life annuity reserves on the basis of a prudently estimated rate of return on assets. In addition, 2019 was marked by an increase in the cost of weather claims both in France, affected by crops, storms, and

natural disasters, and internationally. Conversely, there was a decrease in the expenseof seriousclaims. Banking and financial businesses contributed +€38 million to the Group’s economic income in 2019. The Group’s holding activity posted economic operating income of -€91 million in 2019, compared with a loss of -€89 million in 2018. The Group’s net income totalled +€104 million at 31 December 2018 compared with +€319 million. The non-recurring financial margin decreased by -€61 million. It includes capital gains of €297 million from the sale of a property in Paris, while 2018 was marked by the sale of a property in La Défense, ultimatelyresulting in an equivalentlevel of capital gains. The 2019 income also includes: other non-recurring expenses related to various operations ● amountingto -€20 millionas well as the equity-methodresult of Orange Bank for-€63 million ( versus -€59 million in 2018); impairmentof goodwillof the Italian subsidiary(-€102 million)and ● Orange Bank (-€81 million); the result of discontinued businesses of -€4 million ● corresponding toLa BanquePostale’sresult.

115 Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES