GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

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

Hungary (d) Premiumincome of the subsidiaryGroupamaBiztosito in Hungary increased 6.5% to €364 million at 31 December 2020. Written premiums in property and casualty insurance were up 10.1% at €192 millionat 31 December2020. The developmentof the portfolio (particularlythanks to the networkof brokers) but also the effect of the growth in the averagepremiumexplain the growth of the passenger vehicle segment (+9.5%). The business property damage insurance segment posted growth of 16.9%, mainly due to the launch of a new product and the development of new business. Premium income of the fleet insurance segment was 19.6%. In life and health insurance, premium income was up 2.7%, reaching €173 million, driven by growth in individual protection (+5.3%) and individual savings/pensions(+2.1%). The contraction in unit-linkedpremiumswas offset by growth in traditional savings. However, the subsidiary’s life/savings premium income continued to consist of 83.1% UL policies. Economic operating income amounted to €26 million at 31 December 2020 compared with €20 million in 2019. The net combined ratio for property and casualty insurance decreased by 1.5 points to 95.4% at 31 December 2020. This improvement was due to higher premium income in motor insurance and a lower frequency of claims during the lockdown period. In addition, weather conditions were generally favourable. The subsidiary also continued its portfolio selection policy. The operating cost ratio decreased by 2.1 points to 48.4% under the effect of the increase in earned premiums. The underwritingresult in life and health insurancewas up slightly. The health crisis favoured traditional savings products in life insurance, compensating for losses in non-life insurance (in particular, individual protection claims due to unemployment). The recurring financial margin (net of profit sharing and tax) was higher. The Hungarian subsidiary’s net income appeared to be relatively stable at €24 million. This result incorporates the non-recurring financial margin, which decreased as a result of unrealised gains on market-value investments through profit or loss.

Romania (e) Premium income of the Romania subsidiary Groupama Asigurari declined by 2.4% to €220 millionat 31 December2020. Different segments fared differently. The property and casualty insurance business (€198 million) decreased -4.8%. The passenger vehicle segment (more than 60% of premiums in property and liability insurance) decreased 10.8%, breaking down into -0.6% on the damages segment and -37.4% in liability. In this segment, the volume of business was deliberately limited in a market context where a few players engaged in a very aggressivepricing war. The good performance of the business damage insurance (+9.3%) and agricultural business line (+18.5%) segments mitigated these changes. Life and health insurance premium income (€22 million) increased 27.5% over the period, driven by growth in group health (+25.5%), particularlydue to new policiesand significantpolicy renewals.The growth in the individual protection segment (+31.8%) should also be noted. The Romaniansubsidiary’seconomicoperatingincome represents a loss of €6 millionat 31 December2020 comparedwith a loss of €14 million at 31 December 2019. The net combined ratio in property and casualty insurance decreased 4.8 points to 102.9% at 31 December 2020. This change resultedboth from the decrease in the frequencyof motor claims segmentduring the lockdownperiod and from the return to structural profitability of motor damage following the recovery measures put in place. On the other hand, severe weather (exceptional drought and hail) negatively affected the agricultural business and home insurance segments. The operating cost ratio increasedby 1.8 points (to 33.7%) due to the decrease in earned premiums and inflation. Life and health insuranceunderwritingincome was down due to a poor loss experience on life insurance policies in the group and individual segments. The recurring financial margin (net of profit sharing and tax) was down due to an unfavourable foreign exchange effect compared with last year. Net income totalled€2 millioncomparedwith a loss of -€13 million at 31 December 2019. This result includes a profit of €7 million with respect to the writebackof a reserve establishedin 2018 and no longer needed.

130

Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES