Groupama // 2021 Universal Registration Document

7 FINANCIAL STATEMENTS Combined financial statements and notes

The accounting methods for financial contracts with discretionary profit sharing are identical to the methods for insurance policies described above. Financial contracts without discretionary profit sharing are treated using the valuation procedures described in paragraph 3.12.3.

For construction risks, in addition to the outstanding claims reserves (declared or not yet declared), separate claims reserves that have not yet appeared are also funded for the ten-year civil liability coverage and the ten-year coverage against structural damage. Reserves are assessed on the basis of the type of specific risks covered, particularly agricultural and climate risks and risks that are highly seasonal in nature. Other underwriting reserves ACTUARIAL RESERVES FOR ANNUITIES The actuarial reserves for annuities represent the present value of the Company’s payables for annuities and annuity expenses. RESERVE FOR INCREASING RISKS This reserve is set aside for periodic premium health and disability insurance policies, for which the risk grows with the age of the policyholders. DEFERRED ACQUISITION COSTS In non-life insurance, acquisition costs related to unearned premiums are deferred and recorded in assets on the balance sheet. Life insurance policies and financial contracts with (b) discretionary profit sharing PREMIUMS Written premiums represent the gross premiums, before reinsurance and tax, net of cancellations, reductions, rebates, of the change in premiums still to be written and of the change in premiums to be cancelled. INSURANCE POLICY SERVICING EXPENSES Servicing expenses for life insurance policies and financial contracts with discretionary profit sharing means: all claims once they have been paid to the beneficiary; ❯ underwriting interest and profit sharing that may be included in ❯ those insured benefits; all costs incurred by the insurance company for the management ❯ and payment of claims. They also include the profit sharing and the change in life insurance reserves and other underwriting reserves. UNDERWRITING LIABILITIES RELATING TO LIFE INSURANCE POLICIES AND FINANCIAL CONTRACTS WITH DISCRETIONARY PROFIT SHARING Actuarial reserves Actuarial reserves represent the difference between the present values of the commitments made by the insurer and the policyholders respectively, taking into account the probability that these commitments will be realised. Actuarial reserves are recognised as liabilities on the balance sheet at their gross underwriting value, before reinsurance and deferred acquisition costs.

Insurance policies under IFRS 4 3.12.2 Non-life insurance policies (a)

PREMIUMS Written premiums represent the gross premiums, before reinsurance and tax, net of cancellations, reductions, rebates, of the change in premiums still to be written and of the change in premiums to be cancelled. Premiums written and adjusted for the change in reserves for unearned premiums (which are defined below) constitute earned premiums. INSURANCE POLICY SERVICING EXPENSES Non-life insurance policy servicing expenses mainly include benefits and expenses paid and the change in reserves for claims and other underwriting reserves. Benefits and expenses paid relate to the claims settled net of claims receivable collected for the fiscal year and the periodic payment of annuities. They also include the fees and commissions for the management of claims and payment for services. UNDERWRITING LIABILITIES RELATING TO NON-LIFE INSURANCE POLICIES Underwriting liabilities relating to non-life insurance policies are generally not discounted with the exception of liabilities relating to long-term care risk as well as those relating to current annuities or annuities in the course of establishing incapacity and disability risks. Reserves for unearned premiums The underwriting reserves for unearned premiums represent the portion of premiums for the period between the inventory date and the next contract payment date. They are calculated on a pro rata basis. Reserves for unexpired risks The reserves for unexpired risks are intended to cover the portion of the cost of claims and the related management fees that exceeds the fraction of deferred premiums net of deferred acquisition costs. Outstanding claims reserves The outstanding claims reserves represent the estimate, net of claims receivable, of the cost of all unpaid claims at the end of the fiscal year, both declared and undeclared. They include a charge for management fees that is determined on the basis of actual expense rates.

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Universal Registration Document 2021 - GROUPAMA ASSURANCES MUTUELLES