GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

The reconciliation with the theoretical statutory tax is as follows:

31.12.2020

31.12.2019

Consolidated income (losses) before tax

Consolidated income (losses) before tax

Theoretical tax rate

Theoretical tax rate

(in millions of euros)

current taxes: 34.43%

current taxes: 32.02%

520

France

244

deferred tax: 28.41%

deferred tax: 32.02%

Bulgaria

2

10.00%

10.00%

China

(11)

25.00%

(4)

25.00%

Greece

9

24.00%

11

24.00%

Hungary

26

9.00%

26

9.00%

Italy

(158)

30.82%

(282)

30.82%

Romania

2

16.00%

(13)

16.00%

Tunisia

2

30.00%

3

30.00%

Turkey

7

22.00%

15

22.00%

TOTAL

123

276

The theoretical tax rate applicable in France remains 32.02% on determined including the reduction in corporation tax rates to current taxes and becomes 28.41% on deferred taxes. It is 25.82% by 2022. emphasised that within France, deferred taxation has been Theoretical tax rates remained unchanged over the period.

Related parties Note 45

General description 1 Groupama Assurances Mutuelles and its subsidiaries maintain close, long-lasting economic relationships with the regional mutuals. These relationshipsfocus mainly on the reinsuranceof the regional mutuals by Groupama Assurances Mutuelles, and, to a lesser degree, on business relationships amongst the subsidiaries of GroupamaAssurancesMutuellesand the regional mutuals in the areas of insurance, banking, and services. Premium income earned by Groupama AssurancesMutuelles and its consolidated subsidiaries through the network of regional mutuals comes mainly from Groupama AssurancesMutuelles and GroupamaGan Vie. Basedon these two entities, the contributionof the network of regional mutuals to 2020 consolidated earned premiums totalled €3,257 million,or 31.24% of total consolidated premium income for 2020. The resulting economic inter-dependence led the Group’s two major divisions to enter into agreements to protect the security of the entity as a whole. 1.1 Regional mutuals are required by law to obtain reinsurance exclusively from Groupama Assurances Mutuelles. This requirementis laid down in the bylaws of the regional mutuals. This reinsuranceexclusivityengenders financial solidarity over time, resulting in a transfer of a substantial proportion of the insurance business from the regional mutuals to Groupama Assurances Mutuelles. Reinsurance

The reinsurance relationship is based on the principle of “shared future” between the regional mutuals as ceding companies and their reinsurer GroupamaAssurancesMutuelles.The principle aims to ensure that over the long term, there are neither winners nor losers between ceding companies and their reinsurer. Implementing this principle means a major use of quota share reinsuranceand the reinsurer’sparticipationin the direct insurance management decisionswhich determine the financial return for the whole. Thus, Groupama Assurances Mutuelles either helps to draft the technical terms and conditions for direct insurance, particularly regarding rates, or else it drafts those conditions itself depending on the nature of the risks being reinsured. In addition,GroupamaAssurancesMutuellesmay participatein the handling of any claims file and jointly manages any claim with an estimated cost that exceeds certain thresholds. Also under the reinsuranceagreement,there is a certain number of mechanisms for quickly rectifying any imbalances. The shared future arrangement introduced between the regional mutuals and Groupama AssurancesMutuelles also contributes to certain specific expenses in expanding insuranceportfolios (project financing, experimentation,joint ventures, etc.) once those projects become part of the Group’s strategy and have the potential to be replicated throughout the regional mutuals, as quota share reinsurance gives Groupama Assurances Mutuelles the means to contribute to the future results of theportfolios thus expanded.

237

Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES