GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

Significant events and post-balance sheet events 1

1.1

Significant events of fiscal year 2020 Covid

effects related to the lockdowns that disrupted the day-to-day managementof claims. Methods based on the analysis of past rates may lead to an underestimation or overestimation of technical reserves. The parameters of the models were thus adapted, and alternative methods that are less sensitive to the paces of occurrence or settlement of claims were used in addition in order to value the claims reserves. in terms of unpaid premiums, the health crisis led to particular ❯ vigilance on unpaid premiums (especially in Group insurance). These unpaid premiums were recognised as a decrease in earned premiumsnot written and totalled €39 million. In order to anticipate possible premium collection problems in the coming months, possibly leading to losses in the longer term if receivables cannot be collected, the parameters used to establish bad debt reserves were assessed on the basis of the collection observationsduring 2019 and adjustedby an estimate of the default deviations expected in the context of the crisis, with a more specific analysis for key accounts. This work led to the discovery of a slightly greater amount of unpaid payments than observed in previous years but without any significant deviation at this stage. on certain risks highly exposed to Covid (insurance for operating ❯ losses, event cancellation), the Group-level impact amounts to €38 million (net of reinsurance). In general, and more specifically on these risks, the Group also conducteda very careful reviewof its contractual clauses and implementeda policy of scrupulous compliance with its commitments. It should also be noted that financial investments were not significantly affected by the crisis and that the methods for establishing reserves for these assets remained unchanged. In summary, it is worth pointing out that the Group’s fundamentals are very resilient under these adverse health circumstances.This is reflected in particular in the Group’ssolvency level, which continues to be good. The going-concern assumption underlying the preparation of its financial statements therefore remains perfectly relevant. On 19 March 2020, Fitch Ratings revised Groupama’s rating outlook to “Stable” and maintained its “A” rating, to take into account both the significant uncertainty created by the global coronavirus pandemic, which led to high levels of volatility in financial markets, and “Negative” on the French life insurance sector. On 19 May 2020, then on 29 September 2020, the agency confirmed Groupama’s “A” rating and “Stable” outlook. The Fitch rating reflects Groupama’s ability to maintain strong capitalisation and leverage as well as its highly robust business profile in the French insurance sector. Financial strength 1.1.2 Financial rating (a)

1.1.1 The Covid pandemicbegan to wreak havoc on 2020 in March with major impacts on the economy, individuals and entities, and markets. For the insurance sector, the consequencesof this crisis were also significant, increasing the level of judgement required to assess certain balance sheet items. The Group-level impact of Covid has not been exactly the same in France (where the portfolio is highly diversified) as internationally, where business (mainly non-life) in most countries is relatively focused on motor insurance.In addition, the situation internationally is not comparablebetween some countries heavily affected by the pandemic, such as Italy, or other less-affected countries (Eastern European countries, Turkey, and China). In France, in reaction to the economiceffects of this pandemic, the Group supported its customers and members through several actions: premium-reduction measures, in particular for agricultural ❯ professions (two-month premium reduction on tractors), craftsmen,retailers,and serviceprofessionals(ACPS), and health professionals for €66 million overall; reduction of Group insurance premiums relating to partial ❯ unemployment measures for €12 million; contribution to government expenditure related to the ❯ management of the Covid pandemic for €43 million. This contribution correspondingto 2.6% of the health premiums for 2020 and 1.3% of the estimated health premiums for 2021 is requested from supplemental health organisations in return for the lower expenditure on the health segment that these organisations observed during the health crisis. It is booked in the outstanding claims reserve in accordance with the AMF accounting standards regulation of 22 December 2020; €15 million contributionto the solidarityfund set up by the central ❯ government to support VSE/SMEs (booked in non-current expenses in accordance with the ANC recommendation); civic measures for €0.2 million (grants to associations, medical ❯ institutions, etc.). The particular context also led the Group to strengthen the judgement elements for the assessment of a number of commitments: regarding the valuation of technical reserves, the Covid health ❯ crisis and the lockdownperiod changed the occurrenceand the usual development rate of claims, making the estimation of technical reserves more difficult this year. In addition to the effects on the current claim ratio (reduced frequency in some segmentssuch as motor or health during the lockdownperiodor cumulative loss experience on others), there are operational

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES