GROUPAMA / 2019 Universal Registration Document

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

Net income frominternationalinsurance amounted to -€98 million at 31 December 2019 compared with +€22 million at31 December2018. The breakdownof net income, byentity, isas follows:

Net income (in millions ofeuros) (1)

31.12.2018

31.12.2019

Italy

(43)

(136)

Greece

10

8

Turkey

16

10

Hungary

23

23

Romania

2

(13)

Bulgaria

1

0

Gan Outre-Mer

9

10

Equity-methodentities

5

(1)

Tunisia (Star)

1

3

China (GroupamaAVIC)

4

(4)

TOTAL

22

(98)

Excluding income from theholding business. (1)

Italy (a) Premium income for the Italian subsidiaryGroupamaAssicurazioni fell -9.9% to€1,334 millionat 31 December 2019. Property and casualty insurance premium insurance decreased -12.0% to €916 million.The drastic measures taken to straighten out the subsidiary’smotor liability insurance segment (closures of unprofitable branches, termination of loss-making business, high severity in underwriting) resulted in a decline in the portfolio in terms of number, which explains the decline in the passenger vehicle insurance business (-16.8%, or more than 65% of written premiums in property and casualty insurance). Life and health insurancebusiness(€417 million)decreased-5.0% compared with the previous period. Individual savings/pension businessdecreased-3.9%. IndividualUL savings fell by -20.8% in connectionwith the decreasein new production.Individualsavings in euros were up +3.2% thanks to an action taken by the bancassurance channel. Premium income from group life and health insurancewas also down (-17.8%)due to the decline in the group retirement segment (-21.9%) and the group protection segment (-31.2% due to the end of a majoragreement). Economic operating income amounted to -€121 million at 31 December 2019 compared with -€26 million at 31 December 2018. The combined ratio in property and casualty insurance amounted to 119.5%at 31 December2019, up +13.1 pointscomparedwith the previous fiscal year. The gross loss ratio increased by +13.4 pointsto 89.9%as of 31 December2019. This deterioration

was mainly due to the motor insurance segment, where the subsidiary recognised significant deficits over previous years and carriedout underwritingreplenishments.The operatingclaims ratio was 31.4%, up +0.9 pointscomparedwith the previousfiscal year due to the decrease in earnedpremiums. In life and health insurance, the underwriting income was lower due in particular to the increase in the attritional loss experience and thedecrease in grouphealth and insurance premiums. The recurring financial margin (net of profit sharing) increased 10.3%. Net income totalled -€136 millionat 31 December2019 compared with -€43 millionat 31 December 2018. Turkey (b) Premium income for the Turkish subsidiaries Groupama Sigorta and Groupama Hayat increased +24.5% to €188 million as of 31 December2019. Property and casualty insurance premium income (€150 million) increased +24.0%. Passenger vehicle insurance increased +31.0% and benefited from development of the portfolio and an increase in the average premium. The life and health insurance business (€38 million) increased +26.4%, mainly due to the growth of the individual health insurance segment (+23.8% in connection with the development of the portfolio). The individual savings/pensions business benefitedfrom the successof sales campaigns.

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Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES