GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS

Statutory auditors’ report on the consolidated financial statements

JUSTIFICATION OF OUR ASSESSMENTS - KEY POINTS OF THE AUDIT

The global crisis due to the Covid-19pandemichas created special conditions for the preparationand audit of the accounts for this fiscal year. This crisis and the exceptionalmeasures taken in connectionwith this health emergencyhave multiple consequencesfor companies, particularly on their activity and financing, as well as increaseduncertaintyabout their future prospects.Some of these measures, such as travel restrictions and teleworking, havaelso had an impact on the internal organisation of companiaensd the way audits are conducted. It is in this complex and evolvingcontext that, pursuant to the provisionsof Articles L. 823-9and R. 823-7of the French CommercialCode relating to the justification of our assessments, we bring to your attention the key points of the audit relating to the risks of material misstatement that, in our professional judgement, were the most significant for the audit of the consolidated financial statements for the fiscal year, as well as our responses to these risks. These assessmentscontributedto the audit of the consolidatedfinancial statements,taken as a whole, and to the formationof our opinion expressed above. We do not express an opinion on items in these consolidated financial statements viewed in isolation.

Assessment of outstanding claims reserve – Non-life insurance policies (Please refer to Notes 3.12.2 and 25.1 of the Notes to the consolidated financial statements) Identified risk Reserves for claims, appearing on the balance sheet at 31 December 2020 for €9,199 million in the consolidatefdinancial statements, represent one of the greatest liabilities. They correspond to the estimate, net of claims receivableo,f the cost of all unpaid claims at the endof the fiscal year, both declared and undeclared, both in principal and incidentals (management fees). The estimate of technical reserves is valued on the basis of an actuarial approach, using ultimate cost valuations based on payment triangles or expenses (depending on the risk segments). This valuation also incorporates the valuation of delinquent claims. It requires theexercise of management’s judgement in selecting the assumptions to be applied, the calculation methods to be used, and the related management cost estimates. Given the relative weight of these provisions in the balance sheet, the importance of the judgement exercised by management and the variety and complexityof the actuarial methods used, we considered the valuation of these provisions as a key point of the audit.

Implemented procedures

In order to assess the reasonableness of the estimate of thaemount of the outstanding claims reserve, we implemented the following procedures, using our actuaries: gain an understanding of the design and test the effectiveness of ❯ the key controls for managing claims and determining these reserves, assess the relevance of the calculation methods used teostimate ❯ the reserves, assess the suitability of the actuarial assumptionussed to calculate ❯ reserves (depth of historytaken into account, number of years of stabilisation), assess the reliability of the statements produced by your company, ❯ tracing the historical data, and reconcilethem with the data used to estimate the reserves with the accounting records, analyse the settlement of the reserve of the previous fiscal year with ❯ the actual expenses of claims (settlement surplus/deficit), in a number of segments, carry out an independent ❯ counter-valuation or a joint review of the assumptions used to calculate the reserves and assess their reasonableness.

Valuation of unlisted instruments (classification in level 3 in IFRS) (Please refer to Notes 3.2.1 and 6.9 to the consolidated financial statements)

Identified risk

Implemented procedures

In order to assess the reasonablenessof the estimation of the applied values of unlisted investments, our audit approach was based on information provided to us by your company and included the following work: compare the applied value with the net asset value of the ❯ management company, the latest transactions observed in the market for the examined security, a comparable where possible, or valuations communicated by counterparties, where the security was valuedon the basis of an internal model: ❯ analysis of the relevance of the assumptions and parameters ■ used, critical review of the construction of themodel and inputs (data) ■ used for the valuation, an independent counter-valuation by sampling, using our own ■ models.

As part of its activity has an insurance group, Groupama holds financial instruments not listed on an active market classified as Level 3 in the fair value hierarchy according to IFRS 13. These financial instruments represent €2,743 million on the assets side of the Group’s consolidated balance sheet at 31 December 2020. These instruments are measured at fair value on the basis of internal valuation models where the parameters are not observable or cannot be corroborated by market data. The resulting valuations may be subject to additional value adjustments to take account of certain market, liquidity, or counterparty risks. The techniques used bymanagement to value these instruments include a significant amount of judgement in the choice of methodologies, assumptions, and data used. Due to the material nature of the outstanding amounts and the significant share of assessment on the part of Management in determining the market value, we believe that the valuation of financial instruments classified as Level 3 under IFRS 13 is a key point of the audit.

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES