GROUPAMA / 2019 Universal Registration Document

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

Technical liabilities related to insurance policies Note 26

Technical liabilities related to insurance policies – by operating segment 26.1

31.12.2019

31.12.2018

France International

Total

France International

Total

(in millions ofeuros)

Gross technicalreinsurancereserves Life insurancereserves

31,925

737

32,662

31,787

759

32,546

Outstandingclaims reserves

647

50

696

622

67

690

Reservesfor profit-sharing

649

2

651

552

3

555

Other underwritingreserves

9

10

19

3

18

21

Total Life insurance

33,229

798

34,028

32,965

847

33,812

Reservesfor unearnedpremiums

707

639

1,347

723

676

1,399

Outstandingclaims reserves

6,713

2,202

8,915

6,517

2,079

8,596

Other underwritingreserves

2,767

42

2,809

2,883

35

2,918

Total Non-lifeinsurance

10,187

2,883

13,070

10,122

2,790

12,913

Life insurancereservesfor unit-linkedpolicies

9,862

1,082

10,943

8,480

999

9,479

TOTAL

53,278

4,763

58,041

51,567

4,636

56,203

VALUATION OF NON-LIFE UNDERWRITING RESERVES Non-life underwriting reserves relating to annuities in service or to capital constitutingannuitiesare discountedin accordancewith the provisionsin the texts. Until 31 December2018, a significantpart of these annuities was discounted on the basis of 60% or 75% (dependingon the segments concerned)of the average of the last 24 months of the TME in France. Against the backdrop of a low-interest rate environment, this reference leads to excessivecaution incorporatedinto the Group’s accounts. Referring to the provisions of the IFRS 4 accounting texts, which are based on the provisions of French law CRC 2000-05,the Group decided to extend the use of a discount rate correspondingto a prudentlyestimatedrate of return on assets for discounting non-life annuity reserves (annuities in service and deferred annuities). The effect of these provisionsrepresentsa positive gross impact of €195 million. The growth in the amount of non-life claim reserves between 2018 and 2019 is mainly related to the increase in the level of caution of certain reserves in France and internationally.

The adequacy tests carried out on liabilities as at 31 December 2019 were found to be satisfactory and did not result in the recognition of any additional technical expense.

EVALUATION OF RESERVES FOR UNKNOWN AND LATE CLAIMS (IBNR)

The outstanding claims reserve totalled €8,915 million as at 31 December2019. These reserves are valued on the basis of an actuarial approach, defined in accordance with a Group methodology. By means of valuations of final costs based on paymenttrianglesor costs (by risk segment),this methodpermits a determination of the sufficient amount of outstanding claims reserve. This valuation incorporates the valuation of delinquent claims and expected recoveries into its approach. LONG-TERM CARE The long-term care reserves totalled €371 million at 31 December 2019. This amount is defined on the basis of reserves valued according to an economic approach (BE) at the discount rate of 1.20% incorporating a prudence factor for the Long-Term Care Insuranceand Avenir Autonomieportfolios.The best-estimateview reserve is valued under the same forward-lookingmodel as that used to justify the sufficiency of the social reserves. The biometric and economic assumptions other than the discount rate are also the same.

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Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES