UNIVERSAL REGISTRATION DOCUMENT 2023

7 FINANCIAL STATEMENTS

Report of the statutory Auditors on the combined financial statements

Assessment of the impact of first ‑ time adoption of IFRS 17 "Insurance contracts (See notes 2.2.1.1 and 3.12.1 to the combined financial statements)

Answers provided by the joint statutory auditors during the audit In order to cover the risk of assessing the impact of the first ‑ time application of IFRS 17 on the opening balances and comparatives of the Group’s combined financial statements, we have implemented the following audit approach with our actuarial specialists: we have reviewed and assessed the processes defined by management to determine the impact of the adoption of IFRS 17 on the combined financial statements at 1 January 2022 and on the comparative financial statements at 31 December 2022; ❯ st we analysed the methods and judgements used by management and their compliance with the provisions of IFRS 17 on transition; ❯ we assessed the key assumptions used in the transition methods applied to calculate the margin on contractual services; ❯ we have tested, on a test basis and in accordance with our risk assessment, the calculation models used to estimate future cash flows and the margin on contractual services; ❯ we have performed procedures to test, on a test basis, the reliability of the data on which the estimates are based; ❯ we examined the factors underlying the main assumptions used by management and the sensitivity of the models to these assumptions. ❯ Lastly, we assessed the appropriateness of the information disclosed in the notes to the combined financial statements relating to the transition to the new IFRS 17 with regard to the requirements of IAS 8.

Key point of our audit

The entry into force of IFRS 17 "Insurance Contracts" from 1 January 2023 will lead to significant changes in the accounting principles for measuring insurance contracts, as well as changes in the presentation of financial statements and disclosures in the notes to the financial statements. It is applicable retrospectively from 1 January 2022. Note 2.2.1.1 to the Group’s combined financial statements provides information on the impact of the first ‑ time adoption of IFRS 17 and the main accounting policies applied at the date of transition. According to this note, the adoption of this new accounting standard led to the recognition of an overall impact of -1.36 billion euros on Group's IFRS equity at 1 January 2022 and to the recognition of an initial contractual services margin (CSM) of 2,937 million euros gross before tax. As indicated in note 2.2.1.1 to the combined financial statements, the measurement of insurance liabilities under IFRS 17 is based on new accounting and actuarial estimates that require management to exercise greater judgement in selecting accounting policies at transition and in determining key assumptions. These include: st st st the transition method used for each group of insurance contracts; ❯ the methods and assumptions used to calculate the margin on initial contractual services, more specifically for groups of insurance contracts measured at transition using the modified retrospective method (MRA), leading management to estimate the CSM using simplified methods on the basis of information that is reasonable, justified and available without excessive cost or effort; ❯ the application of the fair value approach for liabilities relating to claims incurred before 2015 on non ‑ participating contracts, with the option of setting the amount of Other Comprehensive Income (OCI) to zero. ❯ Given the significance of the changes brought about by the application of this new accounting standard, the choice of accounting methods and the significant degree of judgement made by management in determining certain key assumptions, we considered the assessment of the impact of the first ‑ time application of IFRS 17 "Insurance Contracts" to be a key audit issue.

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Document d’Enregistrement Universel 2023 GROUPAMA ASSURANCES MUTUELLES