GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

the regional mutuals agree to the following: ❯ concerning the subsidiaries offering products or services ■ designed for members and customers: not to distribute, under any circumstances, competing – third-party products or services, to distribute the products or services of the life insurance – and employee savings subsidiaries, to distribute the services of the non-life insurance – subsidiaries or those of the insurance-related services subsidiaries if they themselves do not offer those services and decide to outsource them; concerning subsidiariesoffering financial services designed for ■ the Group’s entities: to give preference to those subsidiaries in terms of equal – price and quality of service. The creation and growth of subsidiariesoffering insuranceservices or related services to members and customersof the Group are in response to the need for the regional mutuals, whose main business is limited by law to non-life insurance, to have a full range of financial services to offer while sharing amongst themselves through Groupama AssurancesMutuelles the investment required to create and run a profitable subsidiary. Such is the case for the life insurance products of GroupamaGan Vie, the services offered by Groupama Épargne Salariale and a number of service subsidiaries (Mutuaide, CapsAuto, FMB, etc.). It is in the interests of Groupama Assurances Mutuelles to make these investments, for three reasons: owing to their intrinsic profitability going forward; ❯ owing to the communityof interests between it and the regional ❯ mutuals because of reinsurance, Groupama Assurances Mutuelleseither benefits or suffers from any progressor setback in the position of the regional mutuals in the non-life insurance market. It is therefore in its direct interest for the regionalmutuals to have a competitiveoffering in other sectors of the market (life insurance, financial services, etc.) so it can be on an equal footing with the other general insurancecompaniesactive in the market or with bancassurance companies; the investments made in those subsidiaries enable the ❯ subsidiaries of Groupama AssurancesMutuelles distributing the Gan brand to have a servicesofferingas well; such is the case of retail banking, employee savings, insurance-related services, etc. It should be noted that until October 2016,GroupamaAssurances Mutuelles held 100% of the capital of Groupama Banque, whose retail banking offer was marketed by the regional mutuals. Since October 2016, Groupama Assurances Mutuelles holds only a minority stake in Groupama Banque, now Orange Bank. The regional mutuals continue to distribute the retail banking offering of this Groupama Assurances Mutuelles investment.

This reinsurance relationship is designed to continue over the long term, and the duration of the reinsurance agreement between Groupama AssurancesMutuellesand the regional mutuals is equal to that of Groupama Assurances Mutuelles itself, which, unless extended, will expire in 2086. Any modifications to the agreement must be made via a consensus-baseddecision-makingprocess, whereby final approval lies with the Groupama Assurances MutuellesBoardof Directors,after receivingthe recommendationof the Audit and Risk Management Committee. This reinsurance relationship has led to a powerful community of interests between the regional mutuals and GroupamaAssurances Mutuelles. On the one hand, the regional mutuals have a vital interest in preserving the economic and financial balance of their exclusive reinsurer. On the other hand, Groupama Assurances Mutuelles has a major interest not only in the economic and financial balanceof the mutuals, but also in their growth, in which it participates in proportion to the insurancbeusiness transferred. The reinsurance agreement is described in more detail at § 2.1. Business relationships between the subsidiaries of Groupama Assurances Mutuelles and the regional mutuals in the areas of insurance and services 1.2 Groupama Assurances Mutuelles and the regional mutuals enjoy business relationships through various subsidiaries of Groupama Assurances Mutuelles. The role of these subsidiaries is either to offer productsor services designed for membersand customers in the areas of insurance, banking or services, or to provide financial resources to the entities of the Group. These business relationships are governed by a principle of preference for the Group up to and including exclusivity, which is based on the interest of the regionalmutuals in meeting their needs for products or services and in achieving a return on the investments made in the subsidiaries through Groupama Assurances Mutuelles. The preferential nature of these relationships is laid out in an agreement approved by the Groupama Assurances Mutuelles Board of Directors in its meeting of 14 December 2005. Under that agreement, the respective commitmentsof Groupama Assurances Mutuelles and the regional mutuals are: Groupama Assurances Mutuelles shall ensure that the ❯ subsidiariesoffer productsor services that meet the needs of the market ( i.e. , products or services designed for members or customers) or the needs of the Group’s entities ( i.e. , financial servicesdesignedfor the Groupentities) and that are competitive comparedwith the productsoffered by competingcompaniesin terms of price and quality of service;

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES