Groupama // Universal Registration Document 2022

6

EARNINGS AND FINANCIAL POSITION Management report of the Board of Directors

In property and casualty insurance in France, economic operating income was -€92 million in 2022, compared with €128 million in 2021. The figures are as follows:

Property and casualty insurance in France (in millions of euros)

2022 ‑ 2021 change

31.12.2021

31.12.2022

Gross earned premiums

5,849 100.0% 6,187 100.0% 338

5.8%

Underwriting expenses (policy servicing) - excluding claims management costs

(3,742)

-64.0% (4,872)

-78.8% (1,130)

-30.2%

Reinsurance balance

(206)

-3.5% 344

5.6% 550

>100%

Underwriting margin net of reinsurance

1,901

32.5% 1,658

26.8% (242)

-12.7%

Net expenses from current underwriting operations

(1,766)

-30.2% (1,875)

-30.3% (109)

-6.2%

Underwriting income net of reinsurance

135

2.3% (216)

-3.5% (351)

<-100%

Recurring financial margin net of tax

81

1.4% 115

1.9%

34

42.4%

Other items

(88)

-1.5%

9

0.1%

97

>100%

Economic operating income

128

2.2% (92)

-1.5% (220)

<-100%

Capital gains realised net of corporate income tax

67

1.1%

82

1.3%

16

23.2%

Allocations to reserves for long ‑ term impairment net of corporate income tax Gains or losses on financial assets recognised at fair value net of corporate income tax

(9)

-0.1%

(9)

-0.1%

-2.2%

14

0.2% (27)

-0.4% (41)

<-100%

Other operations net of corporate income tax

(27)

-0.5%

(9)

-0.1%

18

65.6%

GROUP NET INCOME

173

3.0% (55)

-0.9% (228)

<-100%

In France, the recurring financial margin (after tax) of the property and casualty insurance business amounted to €115 million in 2022, up €34 million over the period. The change in the other elements is explained in particular by the change in the tax expense based on the underwriting income. This item includes other non ‑ underwriting income and expenses, tax on recurring income, and income from equity ‑ method entities. In France, net income amounted to -€55 million in 2022 versus €173 million in 2021. The non ‑ recurring financial margin decreased by -€25 million over the period because of the effect of unfavourable changes in financial assets recognised at fair value. Other transactions net of tax amounted to -€9 million. underwriting income for Gan Assurances in property and casualty insurance was down €22 million from 2021. The gross loss experience ratio increased by 7.6 points to 67.9%. The current loss experience increased by +17.3 points, combining a deterioration of the attritional loss experience of +3.5 points under the effect of the increase in average costs, historically significant weather ‑ related claims (+12.4 points), and serious claims, which also increased by +1.5 points (mainly in fleets). Net of reinsurance, the loss ratio increased by +1.1 points to 66.5%. The operating expense ratio was 33.5% in 2022 (+0.6 points from 2021). ❯

In France, net underwriting income (gross premiums earned – gross underwriting expenses – net expenses from current underwriting operations and reinsurance balance) decreased by €351 million over the period. The deterioration of the net combined ratio by 5.8 points to 103.5% in 2022 explains this change. 2022 was affected by an exceptional increase in weather ‑ related claims expenses, representing +11.4 points. In addition, the attritional loss experience increased under the effect of the inflationary environment as well as serious claims of +0.8 points, while the impact of the adjustment of the discount rate on non ‑ life annuities resulted in an increase in reserves releases on prior years and other underwriting reserves. The reinsurance ratio improved by 9.1 points, benefiting from the recognition of a portion of weather ‑ related claims by reinsurance. The operating expense ratio was virtually stable at 30.3% in 2022 (+0.1 points over the period). The following key items as at 31 December 2022 should be noted: the net underwriting income of the regional mutuals’ portfolio declined with a combined ratio in property and casualty insurance up +9.4 points at 106.1% because of an increase in the net loss experience (+5.3 points to 79.4%), impacted by record weather ‑ related claims and the weight of inflation on average costs; ❯

149

Universal Registration Document 2022 - GROUPAMA ASSURANCES MUTUELLES