GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

The breakdownof technical reserves for life and non-life insurance policies is presented in Note 25.1 to the annual financial statements. BREAKDOWN OF ACTUARIAL RESERVES BASED ON FIXED-RATE, VARIABLE-RATE OR NO RATE COMMITMENTS The breakdown of actuarial reserves based on fixed-rate, variable-rate ( i.e. tied to a market rate) or no rate commitmentswas as follows:

The calculationof technical reserves in life insurance is also based on the use of an interest rate known as the “underwriting interest rate”, the conditions of which are fixed in France by French Insurance Code. The Code determines a maximum level by reference to the average rate for government borrowings (the “TME”), which is used to set rates for policies and calculate the insurer’s commitmentsto policyholders.The terms and conditions vary based on the type of policy and the duration of the commitments. The standards for calculating reserves as well as the principles of measuringand controlling related reserve risks are specified in the Group underwriting and reserving policies.

31.12.2020

31.12.2019

France

International

Total

Total

(in millions of euros)

Commitments guaranteed at fixed rate

34,946

2,743

37,689

38,352

Commitments guaranteed at variable rate

7,763

18

7,781

7,622

Unit-linked and other products without rate commitment

11,161

990

12,151

11,730

TOTAL

53,870

3,751

57,621

57,703

The proportion of guaranteed-rate commitments continued to decrease slowly. The share of unit-linked and other products without rate commitment increased, representing 21.0% of total commitments (compared with 20.3% at the end of 2019). 2.2.4 Reinsurance is organised on two levels. Internal Reinsurance operated by GroupamaAssurancesMutuelles for all Group entities is designed to optimise retentions for each entity. External reinsurance defines the optimum reinsurance structure for the Group and the level of risk coverage on the bases of computer models. External reinsurance contracts are renegotiated and renewed each year by GroupamaAssurancesMutuelles on behalf of the entire Group. Moreover, selection rules defined in the Reinsurance SecuritiesCommittee,which is composedparticularly of the ReinsuranceDepartmentof GroupamaAssurancesMutuelles and the Group Risk Department,which are based on ratings from ratings agencies, are designed to Manager reinsurers’ risk of default. The list of reinsurers is reviewed in its entirety at least twice a year. During the year, continual monitoring is performed to adapt the internal ratings on reinsurersto any changes that might affect them and modify their solvency assessment. Approvedreinsurersmust have a rating compatiblewith the type of business reinsured, depending on whether they have a short or long accounting run-off. The reinsuranceprinciples and arrangementsare described in the Group reinsurance policy. Reinsurance

Terms and conditions of insurance policies having a material impact on the amount, maturities, and uncertainty of the insurer’s

2.3

future cash flows General description

2.3.1 The Group offers a broad range of non-life insurance products designed for individuals, local authorities and businesses. The motor, individual, professional and agricultural property damage policies offered by the Group are generally one-year contractswith tacit renewal, which include third-party liability coverage. The Group offers a full range of life insurance products, aimed at consumers individuallyas individual policies and at business in the form of Group policies. The main individual insurancepolicies in euros offered to our clients are savings policies, term life policies, mixed insurance policies, deferred annuity policies with mandatory withdrawal in annuities, and deferred capital contracts with return of premiums. The Group policies offered by the Group are essentially defined contribution pension plans and pension contracts by collective capitalisation in points with a point value. The Group also sells multi-vehiclepolicieswith a euro-denominated investments component and one or more unit-linked components.

250

Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES