GROUPAMA / 2019 Universal Registration Document

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

on the professional insurance market, more selective approach to certain risks (non-resident owner, construction, etc.)). GroupamaAssurance-Crédit& Cautionposted premium income of €45 million at 31 December 2019, up +10.6% from the previous period, boostedin particular bythe development of new business. MutuaideAssistance’spremium income at 31 December2019 was up +16.3%at €199 million.This change was notably related to the development of new business (including the contribution of new

policies by brokers in travel insurance)and the increase in business with a majorpartner. Société Française de ProtectionJuridique’spremium income grew by +6.0% to €124 million at 31 December 2019 due to the development of partnerships. Economic operating income in property and casualty insurance in France totalled €197 million in 2019 compared with €66 million at 31 December 2018. It is presentedas follows:

Property and casualty insurance in France (in millionsof euros)

31.12.2018

31.12.2019

2019-2018 change

Gross earned premiums

3,377

100.0% 3,467

100.0%

90

2.7%

Underwritingexpenses(policy servicing) –excluding claimsmanagementcosts

(2,072)

-61.4% (2,043)

-58.9%

29

1.4%

Reinsurancebalance

(278)

-8.2% (133)

-3.8%

145

52.1%

Underwritingmarginnet of reinsurance

1,027

30.4% 1,290

37.2% 263

25.6%

Net expensesfrom current underwritingoperations

(975)

-28.9% (1,005)

-29.0%

(31)

-3.1%

Underwritingincomenet of reinsurance

52

1.6% 285

8.2% 233

>100%

Recurringfinancialmargin net of tax

68

2.0%

43

1.2%

(25)

-36.6%

Other items

(54)

-1.6% (131)

-3.8%

(77)

<-100%

Economicoperatingincome

66

2.0% 197

5.7% 131

>100%

Capital gains realisednet of corporate income tax

39

1.1%

33

1.0%

(6)

-14.5%

Allocationsto reservesfor long-term impairment net of corporate income tax Gains or losses on financialassets recognised at fair value net of corporate income tax

0.0%

0.0%

(1)

<-100%

(4)

-0.1%

(3)

-0.1%

1

36.1%

Other operationsnet of corporate income tax

(17)

-0.5%

(76)

-2.2%

(58)

<-100%

Incomeexcludingrestructuring

84

2.5% 151

4.4%

67

80.5%

Net income from discontinuedbusinessactivities

0.0%

(3)

-0.1%

(3)

GROUPNET INCOME

84

2.5% 148

4.3%

64

76.7%

In France,net underwritingincome(gross premiumsearned –gross underwriting expenses – net expenses from current underwriting operationsand reinsurancebalance)was up +€233 millionover the period. The improvementin the net combinedratio of 6.6 pointsto 91.8% in 2019 is the reason for this growth (slightly more than half of which is tied to the expandeduse of the prudentlyestimatedrate for discountingannuityreserves).Fiscal year 2019was markedby a lower impact of serious claims (especially in motor vehicle liability), while, conversely, the proportion of weather claims (drought, agriculturaland non-agriculturalrisks, storms,and natural disasters) increased. The net loss experience ratio was down -6.8 points at 62.8% in 2019.

The followingkey items shouldbe notedat 31 December 2019: the combined ratio of Groupama Assurances Mutuelles, the ● Group’s internal reinsurer, improved by 5.9 points to 92% in 2019. This improvementstemmed from the decrease in the net loss experience.The operatingclaims ratio was stable at 22.2% at 31 December 2019; underwriting income for Gan Assurances in property and ● casualty insurancewas up €70 millioncomparedwith 2018. The improvement in the net loss experience (-7 points to 65.6%) is reflected especially in an improved current loss experience due to fewer serious and weather claims (-1.4 points and 1.0 points respectively) as well as favourable liquidations on previous fiscal years, particularly in construction. The operating claims ratio increased +1.5 points to 31.5% in 2019 (personnel expenses in monitoringand managementfunctionsand IT costs related tothe Company’s transformation project).

117 Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES