GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

Risk factors and sensitivity analyses Note 48

Risks are identified according to the Group classificationsdefined by risk area – operational, life insurance, non-life insurance, and financial – common to all the Group’s entities and incorporatingthe Solvency 2 risk classification.Each major (Group and entity) risk is assigned a risk “owner” responsible for monitoring and controlling the risk consistent with the standards defined by the Group. Risk owners set up risk control plans implementedwithin the Group’s entities. At Group level, risks related to insurance business lines are in particular monitored by the Groupama Assurances Mutuelles and Groupama Gan Vie Business Departmentsspecialising in the area in question; and by the Reinsurance Department. The Finance Department is responsiblefor managing the risks related to assets and Asset/LiabilityManagement.Operationalrisks are monitoredby the business departments,support departments,or subsidiariesof Groupama Assurances Mutuelles specialising in the area in question. Operationally,the internal control systemof the entities and the EIG Groupama Supports & Services is organised around three complementary systems: risk management and permanent control/compliance of each ❯ entity; internal or operational auditing of each entity; ❯ Group risk management and permanent control/complianceas ❯ well as the Group General Audit Department, reporting to the Executive Management of Groupama Assurances Mutuelles, which direct and coordinate the Auditing and Risk & Control functions within the Group. Several bodies are responsible for Group-level risk monitoring governance: the Group Risk Committee: composed of the members of the ❯ Group Executive Committee and the Manager of the key Risk Management function; its role is to approvethe risk management policy, by setting the limits of risks and approving the measures used to manage risks, and to supervise the management of major Group risks; the Risk Committees by risk family (insurance, financial and ❯ operational) organised by the Group Risk Management and Permanent Control/ComplianceDepartments and made up of major risk owners, and dependingon the areas concernedof the representatives from the Groupama Assurances Mutuelles Business and Support Departments (Group Actuarial Department, Group Financial Control Department, Investments, etc.), French Subsidiaries/InternationalSubsidiariesDepartment, and Asset Management subsidiaries; the Capital Management Committee consisting of the Deputy ❯ CEO, the Chief Financial Officer, the Director of Risk Management, Control, and Compliance,the InvestmentDirector, the Finance Director, the Solvency 2 Director, and the representative of the International Department in charge of monitoring international subsidiaries.

As a multi-line insurer, Groupama is subject to various types of insurance risks with variable time horizons. The Group is also exposed to market risks because of its financial investment activities, particularly credit risks and the risks related to interest rates, equity markets, foreign exchangeand property. Liquidity and reinsurer insolvency risks are also specifically monitored by the Group. In addition, the Group is subject to operational, regulatory, legal and tax risks as are all companies in other business sectors. Organisation of risk management within the Group Implementationof a consistent risk managementsystemwithin the Group is ensured by: definition of standards and a structuring framework for analysis ❯ and control of risks; support from the entities in implementation of this risk ❯ management system; downstream checks of compliance with the Group standards ❯ and the effectiveness of the risk management system implemented within the entities. The general principles, the objectives, and the organisation of internal control are defined in the Group’s internal control policy. An internal audit policy, a component of internal control, supplements the provisions of the internal control policy and specifies its own operating rules and its areas of involvement. A general risk management policy and policies dedicated to covering all the risks to which the Group is exposed as well as a compliance policy, defining the overall framework for implementingand operating the compliance process within the Group, complete the system. All these policies are approved by the Groupama Assurances Mutuelles Board of Directors. The Group risk management policy is the basis for risk management at both the Group level and the entity level. It defines all the structuringprinciples of the risk managementsystem within Groupama in terms of risk identification, measurement, and management methods and in organisational terms. The Group’s entities formalise their risk management policy and various risk policies in line with the Group’s policies and on the basis of their risk profile, organisation and operating country. The service (or resource), distribution, and financial subsidiaries implement a risk managementsystem in accordancewith the rules applicable to their activities, consistent with the framework established by the Group. Since 2014, the risk management system has also relied on the ORSA (Own Risk and Solvency Assessment) process, which is reflected in the drafting of an annual report. This exercise, which aims to assess risks and solvency, is carriedout at the level of each Group entity and at the consolidated level, and each report is validated by the Board of Directors of the entity in question and communicated to the regulator. 1

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES