UNIVERSAL REGISTRATION DOCUMENT 2023

7 FINANCIAL STATEMENTS Combined financial statements and notes

financial income and insurance financial expenses. It includes changes in the carrying amount of insurance obligations due to the time value of money and financial risk. TRANSITION The transition to IFRS 17 involved defining the methods for valuation of insurance contracts in force as at the transition date, i.e. , 1 January 2022, corresponding to the beginning of the period of the fiscal year immediately preceding the date of first ‑ time adoption. As part of this transition, Groupama made judgements and estimates. The transition from IFRS 4 to IFRS 17 requires the full retrospective application of the new standard in theory, as if it had been applied from the outset of the insurance contracts in force. However, if a full retrospective application (“FRA”) is impracticable, two options are then allowed: either the modified retrospective approach (“MRA”) with simplified terms using reasonable and supportable information available without undue cost or effort; ❯ or the fair value approach (“FVA”), which consists in repricing contracts on the basis of actuarial and financial inputs observed at the transition date by calculating the contractual service margin as being the excess between the fair value of contracts established under IFRS 13 – Fair Value Measurement (corresponding to the price that an external acquirer would have required to accept the contracts) and the fulfilment cash flows of insurance contracts. ❯

In practice, Groupama has applied the FRA only to the liabilities for remaining coverage period of contracts measured using the PAA model and to the liabilities for incurred claims of these contracts for occurrences after 2015. For occurrences prior to this date, the FVA method has been applied. Lastly, for the other groups of insurance contracts (measured according to the BBA and VFA models), various factors (for example, the impossibility of modelling since the date of inception of contracts or the absence of historical data), making the full retrospective application of IFRS 17 impracticable, the MRA method or the FVA method has been applied. The option of setting the amount of other comprehensive income to zero has been retained where the FVA method has been applied. The liabilities under the FVA method were thus discounted with the transition yield curve instead of a historical accident year yield curve. In the context of the application of this option, an estimate of OCI for financial assets relating to these liabilities is presented in Note 15.6. Contracts in force at the transition and eligible for the EU exemption from not applying the annual cohort requirement required by IFRS 17 have all been valued at the transition with the MRA or the FVA. After the transition, the adoption of this exemption by Groupama (which mainly concerns contracts applying the variable fee assessment model (“VFA”)) leads to the inclusion of contracts in force at the transition and those resulting from new business acquired since 2022 within a single group of contracts.

The yield curves used (including liquidity premium) to discount future cash flows at 1 January 2022 (transition date) by country were as follows:

01.01.2022

Entity

Currency

1 year

5 years

10 years

20 years

30 years

France Life

EUR

-0.4%

0.1%

0.4%

0.7%

0.9%

France Non ‑ Life

EUR

-0.1%

0.4%

0.7%

0.9%

1.1%

Italy

EUR [-0.4%; -0.3%]

[0.1%; 0.2%]

[0.4%; 0.5%]

[0.6%; 0.7%]

[0.9%; 1%]

Greece

EUR [-0.6%; -0.4%]

[-0.1%; 0.1%]

[0.2%; 0.4%]

[0.5%; 0.6%]

[0.8%; 0.9%]

Hungary

HUF

[3.5%; 3.6%]

[4.3%; 4.4%]

[4.5%; 4.6%]

[4.6%; 4.7%]

[4.6%; 4.7%]

Bulgaria

BGN [-0.7%; -0.7%]

[-0.2%; -0.2%]

[0.1%; 0.1%]

[0.3%; 0.3%]

[0.8%; 0.9%]

Romania

RON

[4.2%; 4.2%]

[5%; 5%]

[5.3%; 5.4%]

[5%; 5%]

[4.6%; 4.6%]

The amount of the CSM at transition is €2,937 million, detailed by transition method in Note 19.4.1. The overall impact of the application of IFRS 17 on equity at 1 January 2022 was -€1.36 billion.

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Document d’Enregistrement Universel 2023 GROUPAMA ASSURANCES MUTUELLES