UNIVERSAL REGISTRATION DOCUMENT 2023

7 FINANCIAL STATEMENTS Combined financial statements and notes

3.11.3 Derecognition Financing debt is derecognised when the obligation specified in the contract is discharged, cancelled, or expires.

3.10.1

Personnel benefits

3.11 Financing debt Financing debt includes subordinated liabilities, financing debt represented by securities, and financing debt owed to banking institutions. Initial recognition Financing debt is recognised when the Group becomes party to the contractual provisions of this debt. The amount of the debt is then equal to the fair value, adjusted if necessary for the transaction costs directly chargeable to the acquisition or issue of such debt. Valuation rules Financing debt is subsequently valued at amortised cost using the effective interest rate method. 3.11.1 3.11.2 (a) Pension commitments The Group’s companies have different retirement schemes. The schemes are generally financed by contributions paid to insurance companies or other funds, which are administered and valued on the basis of periodic actuarial calculations. The Group has defined ‑ benefit schemes and defined ‑ contribution schemes. A defined ‑ contribution scheme is a retirement scheme under which the Group pays fixed contributions to an independent entity. In this case, the Group is not bound by any legal or implied obligation forcing it to top up the scheme in the event that the assets are not sufficient to pay, to all employees, the benefits due for services rendered during the current fiscal year and previous fiscal years. Pension schemes that are not defined contribution schemes are defined benefit schemes. This is the case, for example, for a scheme that defines the amount of the pension benefit that will be collected by an employee at retirement, which is generally a function of one or more factors, such as age, seniority and salary. The liabilities recorded in the balance sheet for defined ‑ benefit schemes and similar schemes correspond to the discounted value of the obligation linked to the defined ‑ benefit schemes at closing, after deducting the closing fair value of the scheme assets. The actuarial gains and losses resulting from experience ‑ based adjustments and modifications in the actuarial assumptions are recognised directly in equity. The costs of past services are immediately recognised in income, regardless of whether the rights are ultimately acquired in the event of a change of pension scheme. With regard to defined ‑ contribution schemes, the Group pays contributions to retirement insurance schemes and is not bound by any other payment commitment. The contributions are booked as expenses related to personnel benefits when they are due. The contributions paid in advance are recorded as assets to the extent that the advance payment results in a reduction of future payments or a cash reimbursement.

3.12 Underwriting operations There are two categories of contract issued by the Group’s insurance companies: insurance contracts and financial contracts with discretionary participation features, governed by IFRS 17; ❯ financial contracts without discretionary participation features, governed by IFRS 9 (cf. 3.12.2). ❯ Insurance contracts, financial contracts with discretionary participation, and reinsurance contracts held In the combined balance sheet, insurance contracts and financial contracts with discretionary participation features issued and reinsurance contracts held are aggregated by portfolio and presented separately, according to their balances at the reporting date, leading to the following four categories: the carrying amount of portfolios of insurance contracts and financial contracts with discretionary participation features that are assets; ❯ the carrying amount of portfolios of insurance contracts and financial contracts with discretionary participation features that are liabilities; ❯ the carrying amount of portfolios of reinsurance contracts held that are assets; ❯ the carrying amount of portfolios of reinsurance contracts held that are liabilities. ❯ IFRS 17 applies to these contracts as detailed in paragraphs 3.12.1.(a) to 3.12.1.(i) below. Receivables (including flows of premiums receivable from intermediaries) and payables relating to insurance and reinsurance contracts are taken into account in the presentation in the balance sheet of the carrying amount of insurance and reinsurance portfolios. The Group makes material judgements and estimates in applying IFRS 17. The judgements that have the most material impact on the amounts recognised relate to the classification of contracts, their level of aggregation, and their valuation. Significant judgements relate in particular to the data used, assumptions to project future cash flows and reflect the underlying uncertainties at the reporting date, as well as the estimation techniques used to value insurance contracts. Apart from market assumptions, the other assumptions are based on the latest available best estimate (based on historical data and expert judgements) and include the loss ratio, best estimate of fall forecasts, policyholder behaviour (fall dynamics, choice of guaranteed ‑ rate annuities), and management decisions ( e.g. discretionary participation policy). 3.12.1

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Document d’Enregistrement Universel 2023 GROUPAMA ASSURANCES MUTUELLES