Groupama // Universal Registration Document 2022

7

FINANCIAL STATEMENTS Combined financial statements and notes

tables for life and non ‑ life incapacity & invalidity annuities are defined within the insurance divisions in guidelines that are harmonised for all of the Group’s entities. Reserves are valued by claims Managers within the operational entities and, if necessary, are supplemented by reserves for losses that have occurred but have not yet been reported. The calculation of underwriting reserves in life insurance is also based on the use of an interest rate known as the “underwriting interest rate”, the conditions of which are fixed in France by French Insurance Code. The Code determines a maximum level by reference to the average rate for government borrowings (the “TME”), which is used to set rates for policies and calculate the insurer’s commitments to policyholders. The terms and conditions vary based on the type of policy and the duration of the commitments. The standards for calculating reserves as well as the principles of measuring and controlling related reserve risks are specified in the Group underwriting and reserving policies. The breakdown of underwriting reserves for life and non ‑ life insurance policies is presented in note 27.1 to the annual financial statements. Breakdown of actuarial reserves according to the criteria of commitments at fixed rate, variable rate, or absence of rate commitments The breakdown of actuarial reserves based on fixed ‑ rate, variable ‑ rate ( i.e. tied to a market rate) or no rate commitments was as follows:

2.2.3 The Group’s insurance business is explicitly or implicitly monitored using analytic procedures, such as regular analysis of the results of each entity and monitoring underwriting statistics and claims rates by entity. The most significant and most complex risks are individually monitored by the specialist business lines and the entities concerned. In addition, these specialist business lines also act to warn and advise the entities. Measurement of reserves In accordance with the practices of the insurance sector and with accounting and regulatory requirements, Groupama recognises underwriting reserves to cover claims and its property and life insurance business lines. Determining underwriting reserves, however, remains an intrinsically uncertain process, relying on estimates. The application of reserve rules is continually monitored by teams dedicated to this task, both before and after the fact, in addition to the reviews that are conducted by the local supervisory authorities. The rules for establishing reserves for claims and the funding Claims management procedures are defined on a standard basis throughout the Group and are regularly updated in procedural specifications governing the management of bodily injury and property damage claims. Moreover, the integration of processing within the IT systems of the entities ensures that management actions are performed. Claims management includes a review of claims files starting at an average commitment threshold.

31.12.2022

31.12.2021

France

International

Total

Total

(in millions of euros)

Commitments guaranteed at fixed rate

33,431

2,715

36,145

36,957

Commitments guaranteed at variable rate

7,823

17

7,840

8,044

Unit ‑ linked and other products without rate commitment

11,552

941

12,493

13,960

TOTAL

52,806

3,673

56,479

58,960

2.2.4 The share of unit ‑ linked and other products without rate represented 22.1% of total commitments (compared with 23.7% at the end of 2021). Reinsurance Reinsurance is organised on two levels. Internal Reinsurance operated by Groupama Assurances Mutuelles for all Group entities is designed to optimise retentions for each entity. External reinsurance defines the optimum reinsurance structure for the Group and the level of risk coverage on the bases of computer models. External reinsurance contracts are renegotiated and renewed each year by Groupama Assurances Mutuelles on behalf of the entire Group. Moreover, selection rules defined in the Reinsurance Securities Committee, which is

composed particularly of the Reinsurance Department of Groupama Assurances Mutuelles and the Group Risk Department, which are based on ratings from ratings agencies, are designed to Manager reinsurers’ risk of default. The list of reinsurers is reviewed in its entirety at least twice a year. During the year, continual monitoring is performed to adapt the internal ratings of the reinsurers to changes that may occur to them that would modify their solvency assessment. Approved reinsurers must have a rating compatible with the type of business reinsured, depending on whether they have a short or long accounting run ‑ off. The reinsurance principles and arrangements are described in the Group reinsurance policy.

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Universal Registration Document 2022 - GROUPAMA ASSURANCES MUTUELLES