GROUPAMA: First-Half 2009 Results: Sustained Revenue Growth Profits Weakened by January Storms

PARIS--(Business Wire)--
Regulatory News:

Consolidated results(1)

Revenues: €8,358 million, up 8.4% (4.5% like-for-like)
Operating profit(2): €115 million, down 49.6%
Net profit: €166 million, down 40.5%
Shareholders` equity: €3,433 million, up 8.0%

Combined results(1)

Revenue: €10,983 million, up 7.2% (4.3% like-for-like)
Net profit: €110 million, down 66.4%

The financial statements are prepared in accordance with IFRS.

"Our business continued to grow rapidly in the first half of the year" commented
Jean Azéma, Chief Executive Officer. "We ended the period with a strong
performance in Life & Health insurance and solid foundations for growth in our
international subsidiaries.

Groupama fully played its part as an insurer when after the early-year storms
the group compensated its policyholders up to a total amount of €436 million.
All the same, the group posted a net profit.

We remain confident of fulfilling our ambitions in Europe and will continue in
the second half implementing our business investments, while also working to
unleash the significant synergies that exist at all levels in our organisation."

Highlights

A RESILIENT PERFORMANCE IN A CHALLENGING ENVIRONMENT

- Strong business growth, with Life & Health premiums up 12.4% and Property &
Casualty premiums up 6.0%.

- Operating profit of €115 million, despite significant storm damage claims at
the beginning of the year.

- Combined ratio (excluding storm damage claims) at 101.2%, in line with our
targeted range of 100% +/- 2%.

- A very healthy asset portfolio, with no material impairment losses recognized
during the period.

- Net profit of €166 million despite the combined effects of the financial
crisis and major storms.

- 6-point improvement in Group statutory solvency ratio to 128%.

Post-balance sheet event

- In July and August, Groupama SA issued senior notes for a total amount of €380
million on Euronext Paris, in relation to the "Groupama Obligation 2009" offer
which complemented the Group`s unit-linked life insurance contracts.

FRANCE: STRONG GAINS ACROSS ALL BUSINESS LINES AND STRATEGIC ADVANCES IN
ESTABLISHING FUTURE GROWTH DRIVERS

- First-half 2009 figures in France provided a resounding endorsement of the
three-year strategic plan which is now in its final year, with Property &
Casualty premiums up 2.0% and Life & Health premiums up 12.4%.

- In the savings and pensions segment, Groupama outperformed both traditional
insurance and the bancassurance networks, reporting 15.9% growth in a market up
6.0%. The marketing initiatives that underpinned this performance was also
behind the very sharp rise in net inflows, which expanded 70.3% compared with a
19.0% increase for the market as a whole, reflecting a shift in demand fuelled
by declining interest rates on short-term savings products.

- Amaguiz.com, the new Internet dedicated brand, continued to outperform its
business plan, with 25,200 policies written by the end of the first-half.
Leveraging this initial success and its innovation capabilities, in April
Amaguiz added comprehensive home insurance to its line-up.

- On 11 March, La Banque Postale announced that it had launched exclusive
negotiations with Groupama with a view to distributing Property & Casualty
products though its network. The partnership agreement should be finalised by
the end of the year, leading to the creation of a joint venture that will be
majority-owned by La Banque Postale.

Post-balance sheet events

- Groupama, France`s leading provider of individual health insurance and the Pro
BTP group have signed an agreement for the creation of a joint venture to lead
their shared networks of healthcare professionals in order to offer
policyholders more competitive services.

- On 24 July, the French banking supervisor (Comité des Etablissements de
Crédit) authorised the proposed merger between Groupama Banque and Banque
Finama. Combining its banking operations in France will enable the Group to
offer a broader range of services and to generate cost synergies, while also
strengthening controls over these operations.

INTERNATIONAL: LAYING SOLID FOUNDATIONS FOR FUTURE GROWTH THROUGH MERGERS AND
THE INTEGRATION OF RECENT ACQUISITIONS

- During the first half of the year, the international subsidiaries generated
premium income of €2.2 billion, 12.8% more than in the year-earlier period
despite the worldwide recession and general slowdown in business.

- As announced, the period was devoted to integrating and merging the companies
acquired in 2008 in order to create major growth platforms for the coming
years:

* In Hungary, Groupama Biztosito and OTP Garancia were merged on 31 March to
create Groupama Garancia Biztosito, the country`s fourth largest non-life
insurance company and fifth largest life insurer.
* In Italy, the local insurance supervisor authorized the merger of Groupama
Assicurazioni, Groupama Vita and Nuova Tirrena which will take place on 1
November.
* In Romania, supervisory approval was obtained for the merger of Asiban and BT
Asigurari. The merged company will begin writing insurance in the local market
under its new name, Groupama Asigurari, at the end of September.

- In Spain, the Group kept up its drive to diversify distribution channels by
signing an agreement with Bancaja, the country`s third largest savings bank, for
the distribution of its comprehensive home insurance offering via the bank`s
1,561 branches. The exclusive 10-year agreement will enable Groupama to
strengthen its position in Spain`s fast-growing bancassurance market.

- Lastly, in line with its strategy of building a long-term presence in the
Chinese market, Groupama obtained the go-ahead to open a representation office
in Beijing prior to applying for a licence to write life insurance.

Post-balance sheet events

- In Turkey, Basak Groupama Sigorta and Basak Groupama Emeklilik will be merged
on 30 September with Güven Sigorta and Güven Hayat, acquired in 2008. The merged
company will be Turkey`s fifth largest non-life insurer and the second largest
life insurer.

- In Bulgaria, former OTP Bank subsidiary DSK Garancia will start writing
insurance under the Groupama brand on 8 September.

The Board of Directors of Groupama S.A. met yesterday under the chairmanship of
Jean-Luc Baucherel to approve the consolidated financial statements of Groupama
S.A. and the combined financial statements for the first six months of 2009.

Sustained business growth in an unfavourable economic environment

Consolidated revenues for the six months ended 30 June 2009 totalled €8.4
billion, up 8.4% over the year-earlier period. Based on a comparable scope of
consolidation and at constant exchange rates, the like-for-like increase was
4.5%.

Insurance consolidated premium income for the period came to €8.2 billion, an
increase of 9.1% on a reported basis and 5.1% like-for-like.

Life & Health premiums grew 12.4% on a reported basis and 9.7% like-for-like,
while Property & Casualty premiums were up 6.0% as reported and 0.9%
like-for-like.

* Insurance and Services in France

Insurance revenues in France amounted to €5,990 million in first-half 2009, an
increase of 7.8% over the year-earlier period.

The regional mutuals (which are reinsured by Groupama SA), the general agent
network (Gan Assurances) and the specialist networks (Gan Patrimoine and Gan
Prévoyance) all generated higher premiums, while the contribution of the broker
network (Gan Eurocourtage) held firm.

Property & Casualty revenues grew 2.0% to €2,494 million in a market up by a
more modest 1.5% (source: FFSA figures published at end-May). Motor insurance
premiums rose 0.4% (including fleet insurance), helped by an increase in the
number of policies in the portfolio.

Life & Health revenues expanded 12.4%. Despite the unfavourable conditions in
the financial markets, savings and pensions revenues rose by a strong 15.9%,
significantly outperforming the market which expanded 6.0% (source: FFSA figures
published at end-June).

The marketing initiatives undertaken during the first-half were instrumental in
driving growth in this business and the Group performed better than both the
bancassurers and the traditional insurers, which reported gains of 9.0% and 3.0%
respectively. Sales of individual savings and pensions contracts were up 19.0%,
while group savings and pensions revenues were 5.8% higher, partly due to the
sale of a €30 million single premium pensions contract.

Net inflows rose by a very strong 70.3% to €906 million, reflecting a return to
growth in the market (with net inflows up 19.0% based on FFSA figures published
at end-June) driven by lower interest rates on short-term savings products such
as Livret A passbook savings accounts.

* International Insurance

In the recession-hit first half of 2009, the Group generated revenue of €2,224
million in international markets, up 12.8% on a reported basis over the
year-earlier period and down 1.4% like-for-like.

Property & Casualty premiums totalled €1,603 million, representing an increase
of 12.9% on a reported basis and a slight 0.7% decline like-for-like.

Growth was held back by the motor insurance business (including fleet
insurance), which accounted for 63% of the total. In a highly competitive
environment due to lower sales of new cars, premiums from this business
contracted 0.9% in the first half. By contrast, home insurance business, which
represented over 14% of the total, grew 17.2%.

Life & Health revenues came to €621 million, up 12.4% on a reported basis and
down 3.3% like-for-like.

The period-on-period decline was partly due to the high basis of comparison
created by sales of single premium contracts in Spain in first-half 2008, as
well as the discontinuation of the payment protection insurance business in the
United Kingdom, which is now being managed on a run-off basis. Adjusted for
these items, Life & Health premiums were up 3.2% like-for-like, despite the
severe impact of the economic crisis on the market in Central Europe.

Southwest Europe

In Spain, Groupama Seguros ended the period with revenues down 5.3% at €489
million. Life & Health revenues were down 12.9%, reflecting the high basis of
comparison created by the sale of a single premium contract in first-half 2008.
Excluding this contract, Life & Health revenues were up 17.2%, lifted by higher
sales of non-unit-linked individual pension products. Property & Casualty
premiums were down 3.2%, due to a 22.5% drop in fleet insurance premiums which
was only partly offset by 6.5% growth in home insurance business.

In Portugal, revenues rose 38.9% to €61 million. Life premiums grew 49.4%, led
by strong demand for individual savings and pensions products, while Property &
Casualty premiums were 15.3% higher.

Southeast Europe

Revenues of the Italian subsidiaries - Groupama Assicurazioni, Groupama Vita and
Nuova Tirrena - were stable at €669 million. Although life insurance premiums
were up 7.8%, total Life & Health revenues contracted by 3.8% due to declines in
provident and health insurance. Property & Casualty revenues rose 1.4%.

The Turkish subsidiaries - Basak Groupama Sigorta, Basak Groupama Emeklilik and
Güven - reported first-half 2009 revenues up 4.1% to €297 million. Life & Health
revenues expanded 25.2%, led by strong sales of employee benefits contracts.
Property & Casualty revenues contracted by 8.6%, due mainly to a 13.5% fall in
auto insurance business.

In Greece, revenue generated by Groupama Phoenix rose 8.8% to €79 million.
Restructuring of the Property & Casualty distribution network in 2008 paid off
in the shape of an 8.7% increase in premiums, led by motor insurance (up 13.2%)
and fire insurance (up 2.7%).

Central and Eastern Europe

Markets in Central and Eastern Europe were particularly hard hit by the economic
crisis.

Groupama Garancia Biztosito contributed €198 million to consolidated revenues in
first-half 2009, a decline of 13.3% on the year-earlier period. Life & Health
premiums were down 29.8%, as the bancassurance sector struggled to withstand the
effects of the financial crisis. Property & Casualty premiums contracted 1.9%
due to lower car registration and the loss of significant fleet insurance
business. These performances were in line with those of the local Property &
Casualty and Life & Healthmarkets.

Revenues from the Group`s Romanian subsidiaries - BT Asigurari, OTP Garancia
Asigurari and Asiban - declined by 11.9% to €104 million in a crisis-ridden
environment. Property & Casualty revenues were down 7.9%. Motor insurance and
liability insurance revenues contracted by 3.0% and 2.6%, respectively, due to a
50% drop in new car sales in first-half 2009 and the Group`s more selective
approach to new business, designed to improve underwriting results. Life &
Health revenues fell 38.6%.

United Kingdom

Groupama Insurances reported revenues of €253 million in first-half 2009, an
increase of 0.8% over the year-earlier period. Property & Casualty revenues
expanded 6.3% to €204 million, led by 29% growth in fleet insurance business and
a 30.3% rise in home insurance business thanks to synergies with various
brokers. Individual motor insurance premiums were down 3%, however, in line with
the plan to improve the quality of the insurance book. Life & Health premiums
fell 20% to €48 million, mainly due to the discontinuation of the payment
protection insurance business which is now being managed on a run-off basis,
leading to an 84.7% drop in premiums for the period.

* Financial & Banking Activities

Revenue from Financial & Banking activities rose 18.2% to €116 million.

In first-half 2009, Groupama Banque reported net banking revenues up 22.0% at
€20 million, reflecting 46.2% growth in the loans and a 2.9% rise in deposits.
At 30 June 2009, the bank had 467,700 customers, an increase of 10.7% over one
year.

Assets managed by Groupama Asset Management and its subsidiaries totalled €89.5
billion at 30 June 2009, €8.2 billion more than at 31 December 2008. The
increase was primarily attributable to higher bond prices and to market-beating
performances by the equity funds. Total net inflows during the period amounted
to €3.1 billion, of which €2.3 billion came from outside the Group.

Operating profit affected by storms damage claims

Operating profit for first-half 2009 totalled €115 million versus €228 million
in the year-earlier period.

Property & Casualty insurance

After taking into account the €135 million after-tax cost of storms Klaus and
Quinten, the Property & Casualty business ended the period with a €41 million
operating loss versus a €156 million operating profit in first-half 2008.

The consolidated net combined ratio in first-half 2009 stood at 108.0% (101.2%
adjusted for the storms damage claims) versus 100.2%(3) in the year-earlier
period.

- In France, the net combined ratio climbed to 112.0% from 101.3%(3)
in first-half 2008, reflecting the 12.3-point impact of storms Klaus and
Quinten on the net loss ratio. Adjusted for the effects of storms claims, the
net loss ratio improved by 1.7 points to 68.3%. The expense ratio remained
stable at 31.4% versus 31.3%(3) in first-half 2008.

- The net combined ratio for international insurance business rose by 4.6 points
to 103.2% in first-half 2009, due to lower reserves releases over prior years
which have an impact on underwriting margins and also to the first-time
consolidation of recent acquisitions.

Life & Health insurance

Life & Health operating profit for first-half 2009 totalled €240 million, an
increase of €100 million over the year-earlier period.

The increase was primarily attributable to the improvement (amounted to €140
million before tax) in the net underlying margin in health and bodily injured
insurance with a net combined ratio of 87.8% at 30 June 2009. Excess reserves
releases over priors years recognized in first- half 2009 on co-insurance and
reinsurance segments concurred to the improvement.

In savings and pensions, net underwriting profit was up €4 million, excluding
the €33 million gain realised on the sale of real estate in the first half of
2008, attributable to better underwriting business particularly in international
markets.

The €142 million decline in recurring investment revenues was offset by a
compensating reduction in funds transferred to the policyholders` surplus
reserve, resulting in a financial margin unchanged from first-half 2008.

Financial & Banking Activities ended the period with an operating profit of €4
million compared with a €2 million operating loss in first-half 2008. The
improved performance by the Banking operations was primarily attributable to
profits on treasury transactions. In a difficult financial environment, the
asset management business`s net banking revenues rose by over 8%, reflecting an
increase in inflows.

Holding company activities` operating loss deepened to €88 million in first-half
2009 from €66 million in the year-earlier period, due to higher financing costs.

Positive bottom line reflecting robust fundamentals despite the financial crisis

Consolidated net profit declined to €166 million in first-half 2009 from €279
million in the year-earlier period, mainly due to the fall in operating profit.

Financial & Banking Activities made a €10 million positive contribution versus a
€1 million negative contribution in first-half 2008, while International
operations increased their contribution by €15 million.

Non-recurring investment income amounted to €10 million after profit sharing and
tax. The decline of €47 million compared with first-half 2008 was mainly due to
lower realised capital gains, although provisions for permanent impairment in
value set aside during the period represented just €3 million.

Other non-recurring items totalled €41 million, up €47 million over the
year-earlier period, corresponding mainly to a tax refund in the United Kingdom,
reflecting a lasting performance of the subsidiary.

High quality asset management

Total consolidated assets at 30 June 2009 amounted to €92.0 billion, compared
with €85.6 billion at 31 December 2008, representing a 7.5% increase.

Insurance investments grew by €5.4 billion or 8.0% to €72.8 billion from €67.4
billion, led by business growth, primarily in the savings and pensions segment.

Unrealised gains (including on property) totalled €0.9 billion at 30 June 2009
versus €1.0 billion at 31 December 2008. Changes in stock market indices had a
positive impact (particularly on strategic investments which outperformed the
indices) but higher bond prices had a negative impact.

Consolidated shareholders` equity amounted to €3.4 billion at 30 June 2009
compared with €3.2 billion at 31 December 2008.

Technical reserves stood at €68.0 billion at 30 June 2009 compared with €65.9
billion at the 2008 year-end. The increase was partly due to growth in life
insurance business, leading to an increase in mathematical reserves, and partly
to the increase in outstanding claims reserves to cover the cost of the
early-2009 storms.

/14

Group`s statutory solvency margin stood at 128% at 30 June 2009, a 6-point
improvement on 31 December 2008 that was mainly attributable to the positive
impact of first-half 2009 profit.

Gearing, excluding Silic, stood at 40.2% at 30 June 2009, unchanged from 31
December 2008. On 22 June 2009, Groupama SA decided not to redeem the 1999
subordinated notes when they became eligible for early redemption.

Outlook

During the second half, Groupama expects to report further strong growth in
revenues and an ongoing improvement in solvency.

The Group intends to pursue its strategy to grow the business and enhance its
performance in France and Europe, with the continued aim of becoming one of
Europe`s top ten insurers.

(1)The consolidated financial statements of Groupama S.A. include the financial
statements of all subsidiaries and intra-group reinsurance business
(representing roughly 40% of the regional mutuals` revenues ceded to Groupama
S.A.). The combined financial statements comprise all of the Group`s businesses
(corresponding to the regional mutuals and the subsidiaries consolidated by
Groupama S.A.).

(2)Profit from operations corresponds to net profit before (i) net realised
capital gains or losses, impairments, gains and losses on financial assets
booked at fair value in any case for the portion attributable to shareholders
and after tax and (ii) non recurring items, amortisation of value of business
acquired (VOBA) and goodwill impairment losses all after tax.

(3) These ratios have been adjusted following improvements to the allocation
keys used to allocate operating expenses between Life & Health insurance and
Property & Casualty insurance. The ratios reported at 30 June 2008 were as
follows: - Consolidated net combined ratio: 99.9% - Net combined ratio, France:
101.1% - Expense ratio, France: 29.7%

www.groupama.com

* * *

Combined results: see Appendix 2

The combined financial statements comprise all of the Group`s businesses
(corresponding to the regional mutuals and the subsidiaries consolidated by
Groupama S.A.).

Appendix 1: Consolidated Financial Highlights

A/Consolidated Revenues

1H 2008 1H 2008 1H 2009 2009/2008 2009/2008
Reported Pro forma * Reported % change (reported) % change (like-for-like)
(in € millions)
> FRANCE 5,559 5,559 5,990 7.8% 7.8%
Life & Health insurance 3,108 3,108 3,492 12.4% 12.4%
Property & Casualty insurance 2,445 2,445 2,494 2.0% 2.0%
Total, continuing operations 5,553 5,553 5,986 7.8% 7.8%
Discontinued operations 6 6 4 -22.4% -22.4%
> INTERNATIONAL & French overseas departments and territories 1,972 2,256 2,224 12.8% -1.4%
Life & Health insurance 552 642 621 12.4% -3.3%
Property & Casualty insurance 1420 1,614 1,603 12.9% -0.7%
Total, continuing operations 1,972 2,256 2,224 12.8% -1.4%
Discontinued operations 0 0 0 N.A. N.A.
TOTAL INSURANCE 7,531 7,815 8,214 9.1% 5.1%
FINANCIAL AND BANKING ACTIVITIES 180 180 144 -20.3% -20.3%
TOTAL 7,711 7,995 8,358 8.4% 4.5%

* like-for-like

B/Consolidated Operation Profit*

1H 2008 1H 2009 % change
(in € millions)
Life & Health insurance 140 240 +71.4%
Property & Casualty insurance 156 (41) N.A.
Financial & Banking Activities (2) 4 N.A.
Holding companies (66) (88) -33.3%
Consolidated Operating Profit* 228 115 -49.6%

*Profit from operations corresponds to net profit before (i) net realised
capital gains or losses, impairments, gains and losses on financial assets
booked at fair value in any case for the portion attributable to shareholders
and after tax and (ii) non recurring items, amortisation of value of business
acquired (VOBA) and goodwill impairment losses all after tax.

C/Consolidated Net Profit

(in € millions) 1H 2008 1H 2009 Change
Operating Profit 228 115 -113
Realised gains and losses, net 87 20 -67
Impairments losses on financial instruments (7) (3) +4
Gains and losses on financial assets booked at fair value (23) (7) +16
Impairment of goodwill and amortization of intangible assets and other exceptional items (6) 41 +47
Consolidated Net Profit 279 166 -113

Contribution by Business to Consolidated Net Profit

(in € millions) 1H 2008 1H 2009
Insurance and Services in France 214 219
Groupama Vie 61 44
Gan Assurances 56 2
Gan Eurocourtage 51 118
Gan Prévoyance 20 40
Gan Patrimoine and subsidiaries 14 14
Groupama Transport 6 10
Other specialist companies 6 4
Amaline Assurances - -14
Discontinued operations 0 2
International Insurance 94 109
United Kingdom 22 56
Southwest Europe 36 23
Southeast Europe 41 26
Central and Eastern Europe -6 5
Other countries 0 (1)
Financial & Banking Activities (1) 10
Groupama SA and holding companies (30) (174)
Other 2 2
Consolidated Net Profit 279 166

D/Consolidated Balance Sheet

(in € millions) 31 December 2008 30 June
2009
Shareholders` equity 3,179 3,433
Unrealised capital gains 972 893
Subordinated debt 1,245 1,245
Total assets 85,650 92,031

E/Key Consolidated Ratios

1H 2008 1H 2009
Combined ratio - Property & Casualty 100.2% * 108.0%
excluding storm damage claims 101.2%
* 99.9% as reported
FY 2008 1H 2009
Net profit before fair value adjustments/Average shareholders` equity excluding revaluation reserves 12.2% 9.7% (annualised)
Gearing* 40.5% 40.2%

* Excluding the debt of Silic, a property company

Appendix 2: Combined Financial Highlights

1H 2008 1H 2009 % change
(in € millions)
Combined Revenues(1) 10,249 10,983 +7.2%
Insurance in France 8,097 8,615 +6.4%
International Insurance 1,972 2,224 +12.8%
Financial & Banking Activities 180 144 -20.3%
Combined Operating Profit(2) 256 42 -83.6%
Realised gains and losses, net 127 37 -70.9%
Impairments losses on financial instruments (9) (8) +11.1%
Gains and losses on financial assets booked at fair value (41) (2) +95.1%
Impairment of goodwill and amortization of intangible assets and other exceptional items (6) 40 N.A.
Combined Net Profit 327 110 -66.4%

(1) Change based on same scope of combination: 4.3% increase.

(2) Profit from operations corresponds to net profit before (i) net realised
capital gains or losses, impairments, gains and losses on financial assets
booked at fair value in any case for the portion attributable to shareholders
and after tax and (ii) non recurring items, amortisation of value of business
acquired (VOBA) and goodwill impairment losses all after tax

Combined Balance Sheet

(in € millions) 31 December 2008 30 June
2009
Shareholders` equity 5,562 5,885
Unrealised capital gains 1,161 1,214
Subordinated debt 1,245 1,245
Total assets 91,777 99,618

Key Combined Ratios

H1 2008 H1 2009
Combined ratio - Property & Casualty 100.6% * 110.3%
excluding storm damage claims 102.3%

* 100.4% as reported

(in € millions) 2008 H1 2009
Net profit before fair value adjustments/Average shareholders` equity excluding revaluation reserves 9.2% 3.7% (annualised)
Gearing(1) 28.3% 28.3%
Solvency margin (Solvency I) 122% 128%

(1) Excluding the debt of Silic, a property company

Media relations:
Frédérique GRANADO - +33 (0)1 44 56 76 91
frederique.granado@groupama.com
Aneta LAZAREVIC - +33 (0)1 44 56 74 38
aneta.lazarevic@groupama.com
or
Financial analyst relations:
Sylvain BUREL - +33 (0)1 44 56 74 67
sylvain.burel@groupama.com

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