GROUPAMA / 2019 Universal Registration Document

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

The economic operating income of the Turkish subsidiaries GroupamaSigortaand GroupamaHayat stood at +€4 millionas of 31 December 2019, down more than half compared with 31 December 2018 following the end of the commercial agreement with theTKK bankingnetwork. The combined ratio of property and casualty insurance was 117.3% compared with 120.0% at 31 December 2019, a decrease of -2.7 points. The ratio at 31 December 2018 is presented pro forma, restatedfor technicalelementsrelated to the commercial agreement with the TKK banking network, an agreementthat endedon 31 December2018. The loss experience rate was up +0.6 points at 82.1% due to serious claims on the business insurance segment, partially offset by lower reserves releases on previous fiscal years in the home insurance segment. The reinsurancebalancechangedfavourablyfollowinga revisionof the cover scheme to make reinsurance more efficient. The operating claims ratio rose +3.5 points to 30.1% following the development of variousprojects(in particular IT projects). Life and health insurance underwriting income was down as of 31 December 2019 due to the loss of life insurance business following the exit of the TKK banking distribution network at the end of 2018 and the worseningof the loss experiencein individual health in non-life insurance. The recurring financial margin (net of profit sharing) remained stable. The net income of the Turkish subsidiariestotalled +€10 millionat 31 December 2019 compared with +€16 million at 31 December 2018. As a reminder, the 2018 result included a capital gain from the sale of the pension fund business for a net amount of €5 million. Greece (c) Groupama Phoenix’s premium income increased +8.7% compared with the previous period to €151 million at 31 December2019. The property and casualty insurance business was up +4.2% at €90 million.The passengervehicle insurancesegment(nearly 70% of property and casualty insurancepremiums)grew +3.6%due to price increases. Life and health insurance premium income increased +16.2% to €61 million. The successful launch of a new UL product explains the strong growth in the individual savings/pensions business (>100%). The good performanceof the group retirementsegment should also be noted (+13.9%, in connection with the development of majorpolicies). Economic operating income represents a profit of €7 million at 31 December 2019 compared with a profit of €10 million at 31 December2018. The combined ratio in property and casualty insurance ratio was 88.7%, up +2.7 pointscomparedwith the previous period, mainly due to lower liquidation surpluses on previous fiscal years. This change was driven mainly by the motor vehicle liability insurance segment,negativelyaffectedby its gross loss experience(increase

in serious claims) and the liquidationof underwritingreserves. The operatingclaims ratio decreased(-2.4 pointsto 43.4%) in keeping with theplan to streamlinestructural expenses. Life and health insurance underwriting income is down compared with the previous fiscal yeardue to a less favourableliquidationon previous fiscal years in life insurance (individual protection). The recurring financial margin (net of profit sharing and taxes) was slightlydown followingthe decrease in bond yields. Net income was a profit of +€8 million at 31 December 2019 versus +€10 million at 31 December 2018. Hungary (d) Premium income of the subsidiaryGroupamaBiztosito in Hungary increased+6.1% to €370 millionat 31 December2019. However, the changes were contrasted according to thesegments. Property and casualty insurance written premiums were up +14.8% at €188 million at 31 December2019. The development of the portfolio (particularlythanks to the network of brokers) and price increasesexplain the strong growth of the passengervehicle insurance segment (+28.5%). The business property damage insurance segment posted growth of +17.4%, mainly due to the launch of a new product and the development of new business. Premium incomeof the fleet insurance segment was +19.8%. In life and health insurance, premium income was €181 million, down -1.6%. The growth of the individual protection insurance segment (+18.2%) failed to offset the decline in the individual savings/pensionsbusiness(-5.4% in connectionwith the decrease in the number of unit-linked policies), adversely affected by the marketing of a government bond. However, the subsidiary’s Life/Savings premium income continued to consist of 86.0% UL policies. Economic operating income amounted to +€20 million at 31 December 2019 compared with +€26 million at 31 December 2018. The net combined ratio for property and casualty insurance improved slightly (decrease of -0.4 points to 96.9% at 31 December2019). This change resultedfrom the offset between a very favourable loss experience and the increase in general expenses. The loss experience (-1.5 points at 44.3%) benefited from the decrease in inclementweather and measuresto clean up the portfolio. The operating claims ratio increased +2.8 points to 50.5%due to the integrationstartingon 1 January2019 of the tax on non-life insurance premiums (GIT) on the motor vehicle liability insurance segment. Adjusted for the effect of this tax, the claims ratio would be 45.4%. Life and health insurance underwritingincome grew thanks to the development of individual savings. The recurring financial margin (net of profit sharing and taxes) decreased under the effect of the increase in the profit-sharing rate. The Hungarian subsidiary’s net income remained stable at +€23 million as of 31 December 2019.

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Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES