GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

it must represent for most of the regional mutuals a financial ❯ expense that would disincentivise them from financing the programme alone; it must have the potential to be replicatedacross all the regional ❯ mutuals. The financing is discontinued once it ceases to be necessary. This system has demonstrated its effectiveness in the past few years. Two major programmes have achieved significant results, namely the developmentand launch of a new offering in individual supplementaryhealth insurance, funded by GroupamaAssurances Mutuelles from 1999 to 2007, as well as the development and deployment within the regional mutuals of the SIGMA non-life insurance management system. The programme supporting the deployment of the retail banking business in the regional mutuals has been in progress since 2004. This business requires a major effort on the part of the regional mutuals, especially in terms of sales force training and management. The subsidies related to achieving sales objectives are designed to end when the retail banking business reaches its financial breakevenpoint. Since fiscal year 2017, it was considered that although the banking business is now carried out by a Groupama Assurances Mutuelles holding and no longer a subsidiary, it was necessary to maintain a subsidy mechanism between Groupama Assurances Mutuelles and the regional mutuals, aimed at supporting the revival and development of this business and offsetting the distribution costs of the mutuals, as long as the portfolio of banking products was not sufficiently developed to self-fund through commissions. For the 2020 fiscal year, the amount of financial support devoted to deploying the banking businessthus came to a total of €3 millionnet of corporate tax. For the first time in 2015, GroupamaAssurancesMutuellescovered the costs resulting from the issue of mutual certificates for the regional mutuals. In 2020, GroupamaAssurancesMutuellespaid a subsidy amounting to €12.6 millionnet of corporate tax for mutual certificates issued in 2020 by 10 regional mutuals. In 2019, for the first time, GroupamaAssurancesMutuellescovered the costs resulting from the Amaline Assurances conversion project. In 2020, GroupamaAssurancesMutuellespaid the regional mutuals a subsidy amounting to €3.7 million net of corporattaexes. Lastly, Groupama Assurances Mutuelles helped fund donations made by the regional mutuals to help combat the Covid-19 pandemic to hospitals or research institutes or organisationssuch as the Institut Pasteur. Groupama Assurances Mutuelles paid the regional mutuals in mainly France a subsidy amounting to €0.2 million net of corporate taxes. Overall, the final amount of the 2020 expenses of Groupama Assurances Mutuelles for the financial support of the regional mutuals was €19.5 million net of corporate taxes. With regard to operations subject to the regulated agreements regime, funding of major national programmesis subject to review by the Audit and Risk Management Committee before being authorised by the Groupama Assurances Mutuelles Board of Directors.

Other agreements 2.5 The amount of premium income generated by the other agreements entered into between the subsidiaries of Groupama Assurances Mutuelles and the regional mutuals in the areas of assistance, legal protection, employee savings and asset management proved immaterial for Groupama Assurances Mutuelles. Financing of large programmes 3 Groupama Assurances Mutuelles participates in the financing of major communityprogrammesby paying subsidies to the regional mutuals designed as incentives for them to implement an overall policy in the general interest. This system results from the Group’s decentralised structure and from the role played in it by Groupama Assurances Mutuelles, which manages the Group and reinsures the regional mutuals. organisation In a decentralised organisation, the central body arises from the regional level; its role is to embody the collectivewill and steer the resulting policies, but from a legal standpoint, it does not have the power to impose those policies at regional level. Financing is one lever used to facilitate the implementation of thGeroup policies. Moreover, the programmes stemming from these policies usually generate high costs in the beginning with regard to the financial coverage of the regional mutual, with no immediate counterparty, and involve a business risk making the return on investment random. At the level of a regional mutual, implementing such programmes using its own resources seems contrary to its interests, at least in the short term. Pooling the financingby GroupamaAssurancesMutuellesmakes it possible to remove this obstacle and to re-establish within the combination consisting of the regional mutuals the national dimension that would exist were this combinationnot legally divided into regional mutuals. As indicated above (see section 1.1), the reinsurance relationship betweenGroupamaAssurancesMutuellesand the regionalmutuals creates a powerful community of interests amongst them. GroupamaAssurancesMutuelles itself has a major interest not only in the economic and financial balance of the mutuals but also in their growth, in which it participates in proportion to the non-life insurance business transferred. Hence it is directly in the interests of Groupama Assurances Mutuelles to participate in some expenses incurred in expanding the regional mutuals. 3.3 To qualify for financing by Groupama Assurances Mutuelles, a programme must meet several conditions: it must be part of the strategy defined by the Group; ❯ Operational structure of a decentralised 3.1 Interest of the central reinsurer in expanding the business lines of the regional mutuals 3.2 A rational, efficient system

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES