GROUPAMA / 2019 Universal Registration Document

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

Romania (e) Premium income of the Romania subsidiary Groupama Asigurari rose +8.4%to €229 million as of 31 December 2019. The property and casualty insurance business (€212 million) increased +7.5%. The passenger vehicle insurance segment (nearly 70%of propertyand liability insurancepremiums)increased +3.3%, breaking down into +16.3% on the damages segment (thanks to the good performance of brokers) and -20% in civil liability insurance (in connection with the new rates applied). The good performance of the business damage insurance segment (+22.3%) and the agricultural business line segment (+52.9%) should also be noted. Life and health insurance premium income (€18 million) increased +19.8% over the period, driven by growth in group health (+35.2%),particularlydue to development of the portfolio. The Romaniansubsidiary’seconomicoperatingincomerepresents a loss of -€14 millionat 31 December2019 comparedwith a profit of +€9 millionat 31 December2018. The net combined ratio in property and casualty insurance increased +11 points to 107.7% at 31 December2019. The loss experience rate increased +15.9 pointsto 75.4% because of the increased average cost of claims due to inclement weather that affected the agricultural insurance segment and especially the motor vehicle liability segment. This segment was the subject of significant underwriting replenishments following an adverse change in average costs. The operating claims ratio was 32%, down -0.5 pointsfrom2018. Underwriting income in life and health insurance decreased as a result of the loss of a life insurance policy and despite the good performance of non-life insurance. The recurring financial margin (net of profit sharing and taxes) increased under the effect of reinvestment rates that were more favourable thanin 2018. Net income represented a loss of -€13 million at 31 December 2019 compared witha profit of +€2 millionat 31 December2018.

Bulgaria (f) In Bulgaria, premium income of the subsidiaries Groupama Zastrahovane, Groupama Jivotozastrahovane, and Express Life increased +9.4% to €19 million at 31 December 2019. Life and health insurance increased +29.4% to €9 million due to the entry of Express Life into the scope. Property and casualty insurance (€11 million) decreased -3.0% due to the drop in the passenger vehicle insurancesegment(-13.8%). The contribution of the Bulgarian subsidiaries to the Group’s net income was -€0.4 million as of 31 December 2019, due to non-recurring expenses related tothe acquisition of Express Life. Gan Outre-Mer (g) Gan Outre-Mer’spremium income rose +1.9% to €65 millionas of 31 December2019. The propertyand casualty insurancebusiness amounted to €56 million and benefited from growth in the home insurance (+3.4%) and passenger vehicle insurance (+1.7%) segments. Premium income in life and health insurance (mainly individual health)continuedto grow.It was up+5.3%at €9 million. Gan Outre-Mer’s economic operating income remained stable at €9 million in 2019. Net underwriting income in property and casualty insurance increased by +€3 million with a net combined ratio that improved -4.7 points to 72.8%. The operating cost rate was down-0.5 points at 27.8% in 2019. Gan Outre-Mer’s net income totalled €10 million in 2019 compared with €9 million in 2018. Tunisia (h) The equity-method income of the Tunisian subsidiary Star was +€3 millionas of 31 December 2019. China (i) The Chinese subsidiary’s contribution represented a loss of -€4 million at 31 December 2019 compared with a profit of +€4 million at 31 December 2018. In 2019, the subsidiary was marked by the impact of swine fever on the agricultural insurance segment.

Financial and banking businesses 6.1.4.5

31.12.2018

31.12.2019

2019-2018 change

(in millions ofeuros)

Net banking income,net of cost of risk and long-termfinancial instruments

153

152

-0.3%

Other operating income and expenses and non-underwritingcurrent income and expenses

(101)

(99)

2

2.0%

Other items

(18)

(16)

2

11.2%

Economicoperatingincome

34

38

4

10.4%

Other operationsnet of corporate income tax

(59)

(63)

(4)

-7.4%

Incomeexcludingrestructuring

(24)

(25)

(1)

-3.2%

Goodwill impairment

(81)

(81)

GROUPNET INCOME

(24)

(106)

(82)

<-100%

124

Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES