GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

5 GROUP RISK FACTORS The Group’s main risks

Climate risk on crops 5.1.2.1 As one of the leading agricultural risk insurers on the French market, the Group is exposed to the risk of occurrence of major cumulative climate events affecting the insured crops (mainly hailstorms, floods, or droughts). The Group, whose main expertise is agricultural insurance, insures all types of crops throughout France through its regional mutuals and also offers its expertiseinternationally(Romania,and China). As of 31 December 2020, the areas covered by multi-risk climate insurance in France were divided among the following crops: large crops (wheat, maize, rapeseed, etc.): 93.3%; ❯ If this risk were to materialise, a technical loss may have a direct impact on the Group’s net income. However, it is mitigatedby risk management measures and the effectiveness of reinsurance covers. The adopted external reinsurance scheme is based on stop-loss retention cover, supplemented by a quota share agreement. The climatic risk on crops is considered “moderate”. Storm risk 5.1.2.2 The Group is exposed to the risk of storms causing direct or indirect damage to insured property over a very short period. If this risk were to materialise, it may have a moderate impact on the Group’s net income. The Group’s reinsuranceprogrammeenables it to reduce its exposure to this natural risk. For example, in 2017, the exceptional climate-relatedclaim associated with storms Irma and Maria in the Caribbean had a limited impact on the Group’s income: while the gross impact of these events totalled €330 million,the actual impact on the Group after reinsurancewas €38 million in the financial statements at the end of December 2017. The storm risk is considered “moderate”. Risk of insufficient reserves 5.1.2.3 The Group is exposed to the risk of insufficient outstandingclaims reserves and other technical reserves related to the non-life insurance and non-life health insurance business. The materialisation and magnitude of the risk may be influenced by internal and external factors. The Group establishes reserves in accordancewith the applicable accounting and regulatory requirements.However, these reserves do not represent a valuation of the corresponding liabilities, but rather an estimateof the amountsof claims, on a given date, using viticulture: 4.1%; ❯ vegetables: 1.8%; ❯ grassland: 0.8%; ❯ arboriculture: 0.1%. ❯

actuarial projection techniques. Claims reserves may therefore be subject to changes due to the number of variables that affect the ultimate cost of claims. These variablesmay be varied, such as the intrinsic change in claims, regulatory changes, trends in case law, and variations in the interest rates used to update annuity reserves. These items are not always predictable,as actual losses may differ significantly from the gross reserves initially established. Any upwardor downwardrevaluationsmay thereforehave an impact on net income. Although the likelihood of materialisation of the risk is greatly reducedat the Group level due to better diversificationbetweenthe business lines and the entities, the risk of insufficient technical reserves is considered “moderate”. Longevity 5.1.2.4 The Group is exposed to the risk of an increase in the duration of payment of annuities, due to an increase in the life expectancy of annuitants or future annuitants, and therefore to an increase in the actuarial reserves to be established,which has a direct impact on the underwritingincome from annuity insuranceproducts.Changes to the regulatory table used also have a moderate impact on the increase in annuity reserves. The life expectancy risk is considered “moderate”. Pandemic 5.1.2.5 With all its consequences, the pandemic risk is considered “significant” and, being a confirmedrisk, is specificallyaddressedin § 5.1.4. 5.1.3.1 The steady increasein the numberof security incidents(attemptsto hack informationsystems) demonstratesthe potentialmagnitudeof this emergingrisk. While these attemptshave not yet succeededin compromising the systems used by the Group, cyber-risk is a pervasive risk that can result in data theft or a denial of service (saturation of systems) leading to a significant interruption of operations. In the course of its business activities, the Group has access to its customers’ personal data (bank data, health data, etc.), which are protected in its systems, and the growing digitisationof its operations increases the Group’s sensitivity to an attack on its information systems, which could have a significant impact on the Group’s business activity and reputation. The cyber risk is considered “significant”. OPERATIONAL RISKS 5.1.3 Cyber-risk

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES