Groupama // Universal Registration Document 2022

6

EARNINGS AND FINANCIAL POSITION Management report of the Board of Directors

Economic operating income (in millions of euros)

31.12.2021

31.12.2022 Change in value

Change %

Property and casualty insurance - France

128

(92)

(220)

<-100%

Life and health insurance - France

298

409

110

37.2%

Total Insurance - France

426

316

(110)

-25.8%

Property and casualty insurance - International

42

79

38

88.1%

Life and health insurance - International

19

30

11

57.9%

60

109

49

81.7%

Total Insurance - International

Financial businesses

62

42

(20)

-32.3%

Holding company activities

(69)

(118)

(49)

-71.0%

GROUPAMA Total

480

349

(131)

-27.3%

of which Property and casualty insurance

169

(13)

(182)

<-100%

of which Life and health insurance

317

438

121

38.2%

The Group’s economic operating income totalled +€349 million as at 31 December 2022, compared with +€480 million as at 31 December 2021. Economic operating income from insurance was €425 million in 2022, down €61 million from 2021. This result takes into account: the effect of an upward revision of the rate of return on assets conservatively estimated for discounting actuarial reserves on work stoppage annuities in the consolidated accounts, taking into account more favourable reinvestment assumptions in a context of rising bond yields. This adjustment took place without lowering the level of caution in the valuation of this rate. The adjustment made in 2022 reflects only the long ‑ term break in the interest rate environment observed on the financial markets; ❯ in order to take into account the global context of rising prices of commodities, energy, and wage ‑ indexed components, insurance reserves were established by taking into account as much as possible the expected changes in the major parameters contributing to their valuation; ❯ although reinsurance covers helped diminish their effect, economic operating income this year was very significantly affected by an exceptional level of weather ‑ related claims (close to double the average observed in prior years). ❯ Economic operating income in life and health insurance stood at €438 million in 2022 versus €317 million in 2021. This good performance can be attributed primarily to business in France, which grew €110 million over the period, despite the significant strengthening of the profit ‑ sharing fund on general assets. The international subsidiaries reported an increase of €11 million in economic operating income from life and health insurance over the period. The net combined ratio in individual non ‑ life insurance was 93.4% in 2022, compared with 97.6% in 2021 (-4.2 points).

In property and casualty insurance, economic operating income amounted to -€13 million as at 31 December 2022, compared with €169 million as at 31 December 2021 (-€220 million in France and +€38 million internationally). The net combined ratio for property and casualty insurance was 102.5% in 2022, compared with 98.0% in 2021 (+4.5 points). The net combined ratio for non ‑ life business, which includes health/non ‑ life insurance, was 99.4% in 2022, compared with in France, the current loss ratio was 82.1%, up 9.3 points. As mentioned above, the 2022 fiscal year was affected by an exceptionally high level of weather ‑ related claims (+7.0 points to 13.7%, i.e. , €1,377 million) because of hail in most of the country in June 2022 and inclement winter weather in northern France. The attritional loss experience amounted to 62.3% and increased by +1.8 points over the period, particularly with an increase in frequency post ‑ Covid combined with an increase in the average cost of claims (related to the inflationary environment). The cost of serious claims also increased but more moderately over the period (+0.5 points to 6.2%). For this type of claim (less affected by inflation on commodities and replacement parts), the interest rate environment offset the increase in costs of claims. In addition, reserves releases on prior years amounted to €383 million (+€54 million over the period) under the effect of the change in the discount rate of non ‑ life annuities, even though for this type of claim, the increase in the cost of claims was also notable. The reinsurance ratio improved by 5.7 points because of reinsurers’ consideration of part of the weather ‑ related claims incurred in 2022; ❯ internationally, the current loss experience increased by +3 points to 66.2%. This change is explained by an increase in attritional loss experience (+4 points to 54.7%) under the combined effect of inflationary pressure weighing on property damage as well as on the motor segment (replacement parts and labour) and the increase in frequencies post ‑ Covid. ❯ The burden of serious claims decreased -0.3 points to 9.1%, mainly in Hungary. Weather ‑ related claims were lower 97.8% in 2021 (+1.6 points). The following should be noted:

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Universal Registration Document 2022 - GROUPAMA ASSURANCES MUTUELLES