UNIVERSAL REGISTRATION DOCUMENT 2023

5 GROUP RISK FACTORS The Group’s main risks

5.1.1.5 Fluctuations in exchange rates Groupama publishes its combined financial statements in euros. Nevertheless, Groupama is exposed to currency risk. In the first place, through its business activities and international development in regions outside the eurozone. Although the Group does business primarily in eurozone countries, about 14% of its insurance premium income as at 31 December 2023 was derived from the business of its international subsidiaries (see Note 26 – Insurance revenue), and about 8% of premium income was denominated in currencies other than the euro, including the Romanian leu, Hungarian forint, Tunisian dinar, and Chinese yuan. In addition, holding investment assets in foreign currencies such as the US dollar, the Hungarian forint, and the pound sterling also exposes the Group to changes in the value of these currencies against the euro that have an impact on the Group’s net income and financial position. The currency risk is considered “low”. The cycles associated with the non ‑ life insurance business are of varying length. These cycles may involve the occurrence of catastrophic events at an unusual frequency or be impacted by economic conditions. The increasing number of climate events, on a global level, as well as other risks, such as acts of terrorism, explosions, the appearance, and development of pandemics, and the impact of global warming, may lead to major consequences, not only in terms of their immediate damage and impact, but also in respect of insurers’ current and future activities and income. The potential increase in compensation and claims, the emergence of new kinds of liability, growing uncertainty as to the volume and level of maximum losses may, for example, have a material impact on Groupama’s business activities, consolidated net income and liquidity. Through the diversification of its portfolio, the individual selection of risks accepted, the limitation of its exposure to risks (specifically in respect of natural disasters), the management of overlapping risks and reliance on reinsurance, Groupama significantly reduces the negative impacts of its exposure. However, the negotiation of reinsurance renewals for 2024 took place in a considerably tough market: price increases after several years of unsatisfactory results and in a context of rising rates; reduction in capacity supply; requirement of higher retentions (demand for a return period of at least 10 years); and refusal of cumulative covers. Insurance risks are managed in accordance with the principles and rules relating to underwriting and reserves. In particular, these principles and rules specify the cover limits and the exclusions fixed under reinsurance agreements, the monitoring of the appropriateness of the portfolio and the price level, preventive measures such as in the case of adverse climatic risks, the provision of information to insured municipalities and, where appropriate, to policyholders in order to anticipate and address such risks, the rules for managing claims, and the standards on reserves. 5.1.2 INSURANCE RISKS

5.1.1.2 Property risk The Group is exposed to property risk, which appears as an insufficient return on assets (lower income) or a decrease in unrealised capital gains due to the increase in capitalisation rates used for valuation. A decrease in returns could have a moderate impact on net income. A reduction in valuations could directly affect the Group’s solvency. A 20% decrease in the valuation of investment and operating property would have a 9 ‑ point impact on the Group’s solvency. As of 31 December 2023, the regulatory solvency ratio was 267%. The Group’s property assets are mainly held by subsidiaries in France. As of 31 December 2023, property assets represented 8.4% of the Group’s portfolio. The property risk is considered “significant” because of the interest rate environment. Credit risk The Group is sensitive to the significant and generalised widening of spreads across all private and sovereign issuers. The high ‑ inflation environment, particularly affecting energy prices, could weigh on the financial health of companies and therefore lead to a rise in the spreads of corporate bonds (more pronounced increases for lower ‑ rated issuers). The increase in rates in 2022 and 2023 led to a significant increase in financing costs for all players (private and sovereign), which is also a factor of vulnerability for the most indebted issuers and therefore a rise in spreads. Such developments could have a significant negative impact – estimated between 15 and 20 points – on the Group’s solvency. As of 31 December 2023, the regulatory solvency ratio was 267%. The vast majority of the Group’s bond portfolio consists of public and private eurozone issues, with ratings of A or higher predominating at 67.8%, BBB ratings at 26.8%, and ratings below BBB or not rated at 5.4% as at 31 December 2023. Despite the quality of these ratings, given the current context of financial markets and the global environment, the credit risk is considered “significant”. Equities risk The Group is exposed to the risk of losses on the market value of equities due to fluctuations in financial markets (individual position of assets or reflection of wider market movements). As of 31 December 2023, equities represented 9.3% of the Group’s assets in terms of economic exposure. As at 31 December 2023, a break ‑ even point was reached, with the effects on capital requirements offsetting changes in valuations. Thus a 25% drop or rise in the valuation of equities would have a moderate impact (+5 points and -3 points respectively) on solvency. As of 31 December 2023, the regulatory solvency ratio was 267%. The Equities risk is considered “moderate”. 5.1.1.3 5.1.1.4 Although simulations show small changes in solvency in the event of moderate interest rate increases or decreases at current levels, interest rate volatility is very high in the current economic environment. The risk is therefore generally considered “significant”.

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Document d’Enregistrement Universel 2023 GROUPAMA ASSURANCES MUTUELLES