GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

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

The life and health insuranceunderwritingresult increased.Against this backdrop, non-life personal insurance benefited from the decrease in the frequency of individual health claims during the lockdown period. However, life and health insurance recorded losses related to the liquidation of run-off portfolios (following the termination of distributionagreementswith TKK Bank in 2018) and an unfavourable foreign exchange effect on contracitns dollars. The recurring financial margin (net of profit sharing and tax) was down due to lower rates of return (Turkish key rates fell sharply in early 2020 before returning to slightly higher levels in the second half of the year). The net income of the Turkish subsidiaries totalled +€5 million at 31 December 2020 compared with +€10 million at 31 December 2019. This result includes non-recurring financial income, which was down sharply from the previous period. Greece (c) GroupamaPhoenix’spremiumincomedecreased1.7%compared with the previous period to €148 million at 31 December 2020. Different segments fared differently. Property and casualty insurance activity fell 7.4% to €83 million in a context marked by strong competitive pressure, during health crisis, particularlyin the passengervehicle segment (nearly 70% of property and casualty insurance premiums), which fell 10.6% in line with the portfolio’s decline in number (the subsidiary did not engage in the pricing war to maintain its margins). Life and health insurance premium income was up 6.7% at €65 million, driven by the good performance of individual health (+10.9%due to the developmentof the portfolio),group retirement (+9.5% due to the developmentof large policies),and group health (+27.8%). Individual UL savings/pensions premiums were down -20.5%, affected by the economic consequences of the health crisis. Economic operating income representeda profit of +€6 million at 31 December 2020 versus +€7 million at 31 December 2019. The combinedratio in propertyand casualty insurancewas 86.3%, a decrease of 2.4 points from the previous period. The lockdown period due to the health crisis had a favourable impact on the current loss experience, particularly in the motor insurance segment, with a significant decrease in the frequency of claims, which offset the decrease in liquidation surpluses. The operating cost ratio increased by 1.6 points to 45.0% due to the decline in earned premiums. Life and health insurance underwriting income was down compared with the previous period due in particular to the less favourable discount rate in life insurance. The recurring financial margin (net of profit sharing and tax) shows lower income. Net income totalled €7 million, down €1 million from 2019.

In life and health insurance, the underwriting income improved significantly mainly due to the decrease in the loss experience during the lockdown periods. In life insurance, the underwriting margin improved in individual protection insurance (2019 was marked by significant serious claims) as well as in individual savings. In non-life insurance, the individual insurance and health insurance segments improved as a result of the decrease in loss experience. The recurring financial margin (net of profit sharing) decreaseddue to the decrease in rates. Net income totalled -€26 million compared with -€136 million at 31 December 2019. This result includes the non-recurringfinancial margin (realisedgains, allocation to provisions for impairment,and change in fair value of financial instruments), which includes, in particular, the impairment of investment assets. Turkey (b) Premium income for the Turkish subsidiaries Groupama Sigorta and Groupama Emeklilik increased 18.0% to €176 million at 31 December 2020. In a country that continues to be affected by significant inflation of 14.6%, property and casualty insurance premium income (€142 million) increased 19.5%. Passenger vehicle insurance (+15.9%) benefited from marketingcampaigns that were good for both the damage segment (+16.2%) and the liability segment (+15.2%). The good performance posted by the business protection segment (+25.6%) should also be noted. The life and health insurance business (€34 million) increased 12.1%, mainly due to the growth of the health insurancesegment (individual and group: +12.5%). In the individual savings/pensions sector (+3.2%), marketing campaigns made it possible to offset the effects of the pandemic. Economic operatingincome for the TurkishsubsidiariesGroupama Sigorta and Groupama Hayat was €6 million (€4 million at 31 December 2019). The combined ratio of property and casualty insurance was 112.9% compared with 117.3% at 31 December 2019, a decrease of 4.4 points.Current claims improvedby 11.3 pointsto 77.5% in connectionwith the decrease in the frequency of motor claims during the lockdown period. However, this improvement was mitigated by deficits on prior fiscal years associated with serious claims for business damages in particular. The gross loss experience was 75.9%, down 6.2 points. The reinsurance ratio was up by +2.9 points. The operating costs ratio decreased by 1 points to 29.1%.

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES