Obligation Mondial Assurances 5.05% ( XS1155697243 ) en EUR

Mondial Assurances

100 % ▼

France

XS1155697243 ( en EUR )

5.05% par an ( paiement annuel )

Perpétuelle

Prospectus brochure de l'obligation La Mondiale XS1155697243 en EUR 5.05%, échéance Perpétuelle

100 000 EUR

768 405 000 EUR

17/12/2025 ( Dans 34 jours )

La Mondiale est une compagnie d'assurance française mutualiste spécialisée dans l'épargne retraite et l'assurance vie.

L'Obligation émise par Mondial Assurances ( France ) , en EUR, avec le code ISIN XS1155697243, paye un coupon de 5.05% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le Perpétuelle

INFORMATION MEMORANDUM DATED 16 OCTOBER 2020

LA MONDIALE
500,000,000 0.750 per cent. Tier 3 Notes due 20 April 2026
Issue Price: 99.402 per cent.
The 500,000,000 0.750 per cent. Tier 3 notes due 20 April 2026 (the Notes) of La Mondiale (La Mondiale or the Issuer) will be issued on
20 October 2020 (the Issue Date).
Unless previously redeemed or purchased and cancelled, the Notes will be redeemed at their Principal Amount on the Interest Payment Date
(as defined below) falling on or about 20 April 2026 (the Scheduled Maturity Date) (subject, in particular, to the prior approval of the Relevant
Supervisory Authority) as further specified in "Terms and Conditions of the Notes -- Redemption and Purchase". In addition, the Issuer may
(subject, in particular, to the prior approval of the Relevant Supervisory Authority) redeem the Notes (i) from and including 20 January 2026
to but excluding the Scheduled Maturity Date and (ii) at any time for Tax Reasons, for Regulatory Reasons or if the conditions for a Clean-Up
Call are satisfied, all as set out in "Terms and Conditions of the Notes -- Redemption and Purchase".
Subject to Mandatory Interest Deferral as set out in "Terms and Conditions of the Notes -- Interest", each Note will bear interest on its principal
amount at a fixed rate of 0.750 per cent. per annum (the Interest Rate) payable annually in arrear on 20 April in each year (each, an Interest
Payment Date), commencing on 20 April 2021. Payment of interest on the Notes will be deferred under certain circumstances, as set out in
"Terms and Conditions of the Notes - Interest - Mandatory Interest Deferral". There will be a short first coupon in respect of the first Interest
Period from and including the Issue Date to but excluding the first Interest Payment date (as defined herein).
The Notes do not contain any negative pledge or events of default.
Payments in respect of the Notes will be made without withholding or deduction for, or on account of, French taxes unless required by law to
the extent set out in "Terms and Conditions of the Notes - Taxation".
Application has been made to Euronext Growth, a market of Euronext in Paris (Euronext Growth) for the Notes to be admitted to trading on
Euronext Growth. Euronext Growth is a multilateral trading facility and is not a regulated market for the purposes of Directive 2014/65/EU
of the European Parliament and of the Council on markets in financial instruments, as amended.
The Notes will be issued in bearer dematerialised form (au porteur) in the denomination of 100,000. The Notes will at all times be in book-
entry form (inscription en compte) in compliance with Articles L.211-3 et seq. and R.211-1 et seq. of the French Code monétaire et financier.
No physical documents of title (including certificats représentatifs pursuant to Article R.211-7 of the French Code monétaire et financier) will
be issued in respect of the Notes. The Notes will, upon issue, be inscribed in the books of Euroclear France (Euroclear France) which shall
credit the accounts of the Account Holders, as set out in "Terms and Conditions of the Notes - Form, Denomination and Title". Account Holder
shall mean any financial intermediary institution entitled to hold, directly or indirectly, accounts on behalf of its customers with Euroclear
France, and includes Euroclear Bank SA/NV (Euroclear) and Clearstream Banking SA (Clearstream).
The Notes have been rated BBB by S&P Global Ratings Europe Limited (S&P). The Issuer's long-term senior unsecured debt is rated A- by
S&P. S&P is established in the European Union and registered under Regulation (EC) No. 1060/2009 of the European Parliament and of the
Council of 16 September 2009 on credit rating agencies (as amended) (the CRA Regulation) and included in the list of credit rating agencies
registered in accordance with the CRA Regulation published on the European Securities and Markets Authority's website
(www.esma.europa.eu/supervision/credit-rating-agencies/risk) as of the date of this Information Memorandum. A rating is not a
recommendation to buy, sell or hold securities and may be subject to revision, suspension, change or withdrawal at any time by the assigning
rating agency.

IMPORTANT NOTICE
This information memorandum (the Information Memorandum) does not constitute a prospectus within the meaning of article 6.3 of and for
the purpose of Regulation (EU) 2017/1129, as amended.
No such prospectus will be approved by the Autorité des marchés financiers for the purpose of the listing and admission to trading of the Notes
on Euronext Growth.
The Notes shall only be offered to qualified investors (investisseurs qualifiés) within the meaning of Regulation (EU) 2017/1129, as
amended.

Copies of this Information Memorandum will be available on the website of the Issuer (www.ag2rlamondiale.fr).
Prospective investors should have regard to the risk factors described under the section headed "Risk Factors" in this Information
Memorandum, in connection with any investment in the Notes.

Joint Bookrunners
BARCLAYS
HSBC
NATIXIS

This Information Memorandum should be read and construed in conjunction with all documents incorporated
by reference herein (see "Documents Incorporated by Reference").
Certain information contained in this Information Memorandum and/or documents incorporated herein by
reference has been extracted from sources specified in the sections where such information appears. The
Issuer confirms that such information has been accurately reproduced and that, so far as it is aware and is
able to ascertain from information published by the above sources, no facts have been omitted which would
render the information reproduced inaccurate or misleading. The Issuer has also identified the source(s) of
such information.
References herein to the Issuer are to La Mondiale. References to the Group are to the Issuer, together with
its fully consolidated subsidiaries taken as a whole. References to SGAM are to the prudential group of SGAM
AG2R La Mondiale which includes, as of the Issue Date, the perimeters of SGAPS AG2R La Mondiale and
La Mondiale, evolving from time to time.
No person has been authorised to give any information or to make any representation other than those
contained in this Information Memorandum in connection with the issue or sale of the Notes and, if given or
made, such information or representation must not be relied upon as having been authorised by the Issuer or
any of the Joint Bookrunners (as defined in "Subscription and Sale"). Neither the delivery of this Information
Memorandum nor any offering or sale made in connection herewith shall, under any circumstances, create
any implication that there has been no change in the affairs of the Issuer or those of the Group since the date
hereof or the date upon which this Information Memorandum has been most recently supplemented or that
there has been no adverse change in the financial position of the Issuer or that of the Group since the date
hereof or the date upon which this Information Memorandum has been most recently supplemented or that any
other information supplied in connection with the issue of the Notes is correct as of any time subsequent to the
date on which it is supplied or, if different, the date indicated in the document containing the same.
This Information Memorandum does not constitute an offer to sell or the solicitation of an offer to buy any
Notes in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such
jurisdiction. The distribution of this Information Memorandum and the offer or sale of Notes may be restricted
by law in certain jurisdictions. The Issuer and the Joint Bookrunners do not represent that this Information
Memorandum may be lawfully distributed, or that any Notes may be lawfully offered, in compliance with any
applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available
thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no
action has been taken by the Issuer or the Joint Bookrunners which would permit a public offering of the Notes
or distribution of this Information Memorandum in any jurisdiction where action for that purpose is required.
Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Information Memorandum
nor any offering material may be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with any applicable laws and regulations. Persons into whose possession this
Information Memorandum comes are required by the Issuer and the Joint Bookrunners to inform themselves
about and to observe any such restriction. In particular, there are restrictions on the distribution of this
Information Memorandum and the offer or sale of Notes in the United States, the United Kingdom and France
(see "Subscription and Sale").
THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE SECURITIES ACT) OR WITH ANY SECURITIES REGULATORY
AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. SUBJECT TO
CERTAIN EXCEPTIONS, NOTES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT IN TRANSACTIONS EXEMPT
FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. FOR A DESCRIPTION OF
CERTAIN RESTRICTIONS ON OFFERS AND SALES OF NOTES AND ON DISTRIBUTION OF THIS
INFORMATION MEMORANDUM, SEE "SUBSCRIPTION AND SALE".

2

The Joint Bookrunners have not separately verified the information contained in this Information
Memorandum. None of the Joint Bookrunners makes any representation, warranty or undertaking, express or
implied, or accept any responsibility or liability, with respect to the accuracy or completeness of any of the
information contained or incorporated by reference in this Information Memorandum or any other information
provided by the Issuer in connection with the issue and sale of the Notes. Neither this Information
Memorandum nor any information incorporated by reference in this Information Memorandum is intended to
provide the basis of any credit or other evaluation and should not be considered as a recommendation by the
Issuer or the Joint Bookrunners that any recipient of this Information Memorandum or any information
incorporated by reference should subscribe for or purchase the Notes. In making an investment decision
regarding the Notes, prospective investors must rely on their own independent investigation and appraisal of
the (a) the Issuer, the Group, its business, its financial condition and affairs and (b) the terms of the offering,
including the merits and risks involved. The contents of this Information Memorandum are not to be construed
as legal, business or tax advice. Each prospective investor should subscribe for or consult its own advisers as
to legal, tax, financial, credit and related aspects of an investment in the Notes. None of the Joint Bookrunners
undertakes to review the financial condition or affairs of the Issuer or the Group after the date of this
Information Memorandum nor to advise any investor or potential investor in the Notes of any information
coming to the attention of any of the Joint Bookrunners. Potential investors should, in particular, read
carefully the section entitled "Risk Factors" set out below before making a decision to invest in the Notes.
Neither this Information Memorandum nor any other information supplied in connection with the issue and
sale of the Notes (a) is intended to provide the basis of any credit or other evaluation or (b) should be
considered as a recommendation by the Issuer or the Joint Bookrunners that any recipient of this Information
Memorandum or any other information supplied in connection with the issue and sale of the Notes should
purchase any Notes. Neither this Information Memorandum nor any other information supplied in connection
with the issue and sale of the Notes constitutes an offer or invitation by or on behalf of the Issuer or the Joint
Bookrunners to any person to subscribe for or to purchase any Notes.
MIFID II product governance / Professional investors and ECPs only target market - Solely for the purposes
of each manufacturer's product approval process, the target market assessment in respect of the Notes, taking
into account the five categories referred to in item 18 of the Guidelines published by the European Securities
and Markets Authority (ESMA) on 5 February 2018, has led to the conclusion that: (i) the target market for
the Notes is eligible counterparties and professional clients only, each as defined in Directive 2014/65/EU (as
amended, MiFID II); and (ii) all channels for distribution of the Notes to eligible counterparties and
professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a
distributor) should take into consideration the manufacturers' target market assessment; however, a
distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of
the Notes (by either adopting or refining the manufacturers' target market assessment) and determining
appropriate distribution channels.
PRIIPs Regulation / Prohibition of sales to EEA and UK retail investors - The Notes are not intended to be
offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to
any retail investor in the European Economic Area (EEA) or in the United Kingdom (UK). For these purposes,
a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article
4(1) of MiFID II; or (ii) a customer within the meaning of Directive 2016/97/EU, where that customer would
not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently, no key
information document required by Regulation (EU) No 1286/2014 (as amended, the PRIIPs Regulation) for
offering or selling the Notes or otherwise making them available to retail investors in the EEA or in the UK
has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail
investor in the EEA or in the UK may be unlawful under the PRIIPs Regulation.
In this Information Memorandum, unless otherwise specified or the context otherwise requires, references to
, Euro, EUR or euro are to the single currency of the participating member states of the European Economic
and Monetary Union which was introduced pursuant to the Treaty establishing the European Community, as
amended.

3

TABLE OF CONTENTS
Section
Page
Risk Factors ........................................................................................................................................................ 5
General Description of the Notes ..................................................................................................................... 22
Information Documents Incorporated by Reference ........................................................................................ 34
Terms and Conditions of the Notes .................................................................................................................. 35
Use of Proceeds ................................................................................................................................................ 54
Description of the Issuer ................................................................................................................................... 55
Subscription and Sale ....................................................................................................................................... 67
General Information ......................................................................................................................................... 69
Persons responsible for the information contained in the Information Memorandum ..................................... 72

4

RISK FACTORS
The Issuer believes that the following factors may affect its ability to fulfil its obligations under the Notes. All
of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a
view on the likelihood of any such contingency occurring.
Factors which the Issuer believes may be material for the purpose of assessing the market risks associated
with the Notes are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the
Notes, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with the
Notes may occur for other reasons and the Issuer does not represent that the statements below regarding the
risks of holding the Notes are exhaustive. Prospective investors should read the entire Information
Memorandum. The following is a disclosure of risk factors that are material to the Notes in order to assess the
market risk associated with these Notes and risk factors that may affect the Issuer's ability to fulfill its
obligations under the Notes. Prospective investors should consider these risk factors before deciding to
purchase Notes. The following statements are not exhaustive. Prospective investors should consider all
information provided in this Information Memorandum and consult with their own professional advisers if
they consider it necessary. In addition, investors should be aware that the risks described may combine and
thus intensify one another. The occurrence of one or more risks may have a material adverse effect on the own
funds, the financial position and the operating result of the Issuer.
Each of the risks highlighted below could have a material adverse effect on the business, operations, financial
conditions or prospects of the Issuer or the Group, which in turn could have a material adverse effect on the
amount of principal and interest which investors will receive in respect of the Notes. In addition, each of the
risks highlighted below could adversely affect the trading price of the Notes or the rights of investors under
the Notes and, as a result, investors could lose some or all of their investment.
Words and expressions defined in the section entitled "Terms and Conditions of the Notes" herein shall have
the same meanings in this section.
1.
RISK FACTORS RELATING TO THE ISSUER
1.1
Market risks
The market risks affect the yield of the assets backing the own funds or the technical provisions of the
Issuer or the Group. Market levels and returns on investment constitute a significant part of the overall
profitability of the Group and fluctuations in financial markets may have a material effect on operating
results.
Global debt and equity market have experienced historical levels of volatility (due in particular to an
accommodating monetary policy by the European Central Bank) and the outlook is uncertain (such
uncertainty being linked for example to energy price trend, currency risks, limited growth, various
geopolitical tensions, etc.).
La Mondiale and its Group are exposed to the following market risks:
Risks related to fluctuations in interest rates
Fluctuations in interest rates may affect the valuation of investments held, the conditions of future
investments and the solvency measurement.
If the interest rates are low for a long time, investment could be affected in a sense that it would not
match the liability requirement. A sustainable maintenance of interest rates at low levels may lead to
a significant decrease in the return of investment assets due to future investments at this low level.

5

This could lead to a negative impact on the financial situation and solvency of the Issuer or the SGAM
(as defined in the Issuer's description). This risk could also have an impact on the liquidity and cash
levels of the Issuer. As at 31 December 2019, the regulatory solvency ratio of the SGAM was 221%.
A 50 basis points decrease in the interest rates would have had a negative impact of -25 points on the
SGAM's solvency ratio, while a 50 basis points increase would have resulted in a positive impact of
+15 points increase of the solvency ratio. As at 30 June 2020, the regulatory solvency ratio of the
SGAM was 198%. In current market conditions with low interest rates, this risk is considered to be
"very significant".
A combination of sustained near zero or negative interest rates for the shortest maturities followed by
a significant increase of these interest rates could lead to higher redemption risk, unrealized capital
losses on bonds or adverse consequences on the cash level of the Issuer. During periods when interest
rates are going up, the price of fixed income securities tends to decrease and gains on sale of such
securities are lower or losses greater. A significant rise in interest rates could lead to the surrender of
savings contracts, even if the investment sensitive to interest rates (mainly bonds) may be at a loss.
This could lead to the Issuer selling at loss in order to honour its surrenders. This risk is considered to
be "moderate".
Credit risk
La Mondiale is exposed to credit risk mainly through its financial assets, and securities lending.
This risk relates to the impact of potential adverse fluctuations in the value of financial assets on the
credit standing of the Issuer and the Group. Such adverse fluctuations could impact the Issuer's ability
to generate capital gains on the financial assets it holds and could lead the Issuer to set impairment to
cover this risk.
An adverse fluctuation in the value of financial assets could have an impact on their future yield, which
could result in a loss of competitiveness of the Issuer affecting the behaviour and commercial choice
of insured clients.
The vast majority of the Group's bond portfolio is made up with Eurozone public and private issues,
with predominantly AAA, AA and A ratings, representing 80%, and BBB ratings representing 18% as
at 30 June 2020. Despite the quality of these ratings, given the current financial market background
and global environment, this risk is considered to be "significant".
Risks related to the variations in the value of investment assets
A reduction in the value of the investment assets could impact the capacity of the Issuer to achieve
capital gains and could even lead to impairment of certain assets. This could therefore have an impact
on the future yields of the assets, with a loss of competitiveness, such as an increase in redemption
rates. Such a development could also have unfavourable impacts on the solvency of the Issuer or the
solvency determination.
Variations in interest rates and returns on equity markets may also have an impact on policyholders'
behaviour, which may affect La Mondiale's business.
Investment risk on life insurance portfolios is sometimes borne by the policyholders in the case of
unit-linked life insurance policies. In these cases, fluctuations of the price of underlying securities will
directly or indirectly affect the financial results of the life insurance business operations.
In addition, La Mondiale invests part of its assets in shares and funds, which are generally exposed to
volatility risks.

6

For instance, as at 30 June 2020, the percentage of the Issuer's investment portfolio (excluding unit-
linked investments) invested in shares and funds was 7%, the percentage of the Issuer's portfolio
invested in property was 5% and the percentage of fixed income was 88%.
This risk is considered to be "significant".
Real estate risk
The Group is exposed to real estate risk, reflected by an inadequate return on assets (fall in income
and/or realised capital gains) or a decrease in unrealised capital gains (or an increase in unrealised
capital losses). In addition, given the current economic situation, real estate business could be
adversely affected (i.e. negative impacts on rents and renegotiation of leases) which could as a result
negatively impact the Group's real estate assets. Lower yields could have a moderate impact on the
net income and a decrease in unrealised capital gains (or an increase in unrealised capital losses) could
directly affect the Group's solvency. As at 30 June 2020, the Group's regulatory solvency ratio was
198%.
The Group's real estate assets are held mainly by subsidiaries in France. At 31 December 2019, real
estate assets represented 3% of the Group's portfolio.
Real estate risk is considered to be "moderate".
Counterparty risk
La Mondiale is exposed to counterparty risk with third parties, mainly financial institutions, with
which it enters into various financial transactions.
The failure of any of its counterparties could have an effect on the financial situation of the Issuer but
could also generate significant liquidity problems and cause other institutions to default.
The stability of financial institutions depends greatly on the trends in the markets. This risk can
adversely affect the financial intermediaries, banks and depositories with which La Mondiale operates
on a daily basis and which may therefore adversely affect its income, profit and solvency.
This risk is considered to be "moderate".
Currency risk
This risk relates to the sensitivity of assets to changes in the currency in which assets are recorded on
the balance sheet. Since the bonds denominated in foreign currencies held by La Mondiale are hedged
by currency swaps (which provides protection against exchange rate risk on this class of assets), La
Mondiale mainly faces this risk by holding equity assets denominated in U.S. dollars, Yen, Sterling,
Swiss Francs and other currencies. However, such equity assets are themselves marginal in La
Mondiale's overall asset allocation. As a result, this risk is considered as "low".
Liquidity risk
There is a risk that La Mondiale cannot sell a financial asset at its true value or cannot sell it at all. La
Mondiale also faces the risk that it cannot meet its obligations, such as being able to reimburse the
policy holders requesting it.
The Group's activity is comprised of different types of products (such as provident, health, savings
and pension). Such diversification enables the Group to have limited exposure to the liquidity risk.
Therefore, the Group considers this risk to be "low".

7

1.2
Risks linked to the insurance business
The Issuer and the Group are exposed to the following insurance risks:
Surrender and transfer risk
The Issuer may in the future be affected by significant changes in its financial condition linked to
potential surrender of life insurance, pension and saving contracts or to transfers of group pension
contracts to another insurer. This risk could negatively affect the liquidity and cash levels of the Issuer.
Given the current competitive environment and regulatory changes affecting portfolios balances, this
risk is considered to be "significant".
Longevity and mortality risks
The Issuer may be affected by significant changes in statistics of longevity and mortality of its
policyholders.
Longevity risk is the risk that the number of deaths is less than expected could lead the Issuer to
distribute retirement or incapacity pensions to its insured clients for a period of time longer than
expected.
Mortality risk which is the risk that the number of deaths is higher than expected could have an impact
on savings portfolios and generate a significant decrease of the outstanding commitments resulting in
a loss of revenues for the Issuer. The occurrence of mortality risk could also generate higher benefits
related to death insurances.
The assessment of these risks is at the centre of underwriting in health and protection insurance, and
may have an impact on the pricing and the provisions made by La Mondiale. The occurrence of such
risks may expose La Mondiale to greater than expected liabilities, which may have a material adverse
effect on its income, profit and solvency. These risks are considered by the Group to be "moderate".
Surrender risk
Savings contracts include a surrender clause allowing policyholders to request reimbursement of all
or part of their accumulated savings. La Mondiale is exposed to the risk of surrender volumes being
higher than the forecasts used for asset liability management purposes, which may force the Issuer to
sell assets at a loss. This risk is considered to be "moderate".
Reinsurance risk
La Mondiale has exposure to its reinsurers through its reinsurance treaties. In such treaties, the other
insurers assume part of the cost, losses and expenses associated with incidents, and losses whether or
not carried over, in exchange for a proportion of the premiums. The ability to make a claim under, and
the amount and cost of, the reinsurance depends on general market conditions and may vary
significantly. Any decrease in the amount of reinsurance cover purchased will increase the risk of loss
for La Mondiale. When reinsurance is put in place, La Mondiale remains liable for transferred risks if
the reinsurer does not fulfil its obligations. Default by a reinsurer could therefore affect the Group's
profits and financial situation. This risk is considered as "moderate".

8

Provision risk
This risk may arise if insufficient provision is made to meet commitments due to wrong assessment of
available data, subsequent change of internal and external factors or inappropriate calculation
parameters.
The occurrence of such a risk could negatively affect the financial results and solvency of the Issuer.
The Issuer considers the risk of insufficient provisions as "low".
1.3
Operational risks
The Group defines operational risk as the risk of loss due to inappropriate or failure of procedures,
individuals or systems or loss resulting from external events. This definition includes human errors,
internal or external fraud and wilful misconduct, information systems failures, lack of data quality,
human resources and skills risks, commercial disputes (relating in particular to outsourcing and
suppliers), or accidents.
Main operational risks can be classified into the following categories:
Cyber risk
The Group, like other companies, faces the risk of the inadequate adaption to new technologies and
their operational implications (digitalisation, dematerialisation of processes, etc.), and in particular the
risk of cybercrime. The steady increase in the number of security incidents (attempted hacking of
information systems) demonstrates the potential scale of this emerging risk. A cyber-attack on its
information systems could have the following prejudicial consequences to the Group: the disclosure
of sensitive and personal data relating to insured persons (e.g., bank details, medical data), the
deterioration of the Group's image, a loss of confidence on the part of the insured persons and potential
judicial, administrative and/or disciplinary sanctions, which could result in a decline in turnover and
profit. As a result, this risk could have a significant material impact on the Group's business and
reputation. For the Group, cyber risk is considered to be "significant".
Risks relating to information systems
The Group's business is closely dependent on its information systems, as its activities require it to
process a large number of increasingly complex transactions and growing volumes of data. Software,
hardware or service failures of a major partner or supplier or repeated failures could lead to errors or
interruptions in the management, accounting and treasury systems. The risks relating to information
systems include risks relating to the planning of systems development, risk of design, development
and maintenance of applications, risks attached to the use of applications and software.
Although the Group has set internal procedures to mitigate this risk (for example an annual evaluation
of the quality of services providers is carried out in order to ensure their reliability and to prevent any
failures on their part), in 2019, 5 significant IT incidents were reported. However, their financial
impact at Group level was limited thanks to several actions taken. As a result, the Group considers this
risk as "moderate".
1.4
Other risks
Regulatory risks
The Group is subject to extensive regulation and supervision in the jurisdictions in which it does
business. Such regulation and control are subject to new regulatory or legislative provisions. New, or
changes to, laws or regulations may have a significant impact on businesses, activities, sectors or
markets. In some cases, regulation in one country may affect business operations in another country.

9

As the amount and complexity of these regulations increase, the cost of compliance and the risk of
non-compliance will also increase. If the Group does not meet regulatory or other requirements, the
Group may suffer penalties including fines, suspension or cancellation of its insurance licenses which
could adversely affect its ability to render its services and do business. In addition, significant
regulatory action against it could have material adverse financial effects, cause significant reputational
harm or harm its business prospects.
Regulatory changes may affect its existing and future businesses by, for example, causing customers
to cancel or not renew existing policies or requiring it to change its range of products or to provide
certain products (such as terrorism or flood cover where it is not already required) and services,
redesign its technology or other systems, retrain its staff, pay increased tax or incur other costs.
Insurance laws or regulations that are adopted or amended may be more restrictive than the Group's
current requirements, and may result in higher costs, lead to the standardisation of offers, or limit its
growth, which could lead to a termination risk and a change in behaviour of insured persons of the
Group or otherwise adversely affect its operations.
For example, in 2017, the Group's net income was negatively impacted by 108 million due to
exceptional charges related to regulatory changes in France (impact of the state's withdrawal from the
funding of legal increases in life annuities).
Given recent and anticipated regulatory developments, the Group considers this risk to be "moderate".
Risks relating to significant legal proceedings and litigation
All insurance companies are exposed to litigation relating to claims on policies they underwrite.
Accordingly, La Mondiale is currently involved in such legal proceedings relating to claims lodged by
policyholders, some of which involve claims for substantial damages and other relief. Judicial
decisions may expand coverage beyond the Issuer's pricing and reserving assumptions by widening
liability on its policy wording or by restricting the application of policy exclusions. There can be no
assurance that the outcome of any of its judicial proceedings will be covered by its existing provisions
for outstanding claims or its reinsurance protections or that litigation would not otherwise have a
material adverse effect on its businesses, financial condition and results of operations.
The provisions for litigation as at 31 December 2019 were of 14.5 million euros as set out in note
5.13.1 of the consolidated financial statements included the 2019 Financial Report (as defined in
section "Information Incorporated by Reference").
This risk is considered by the Issuer to be "moderate".
Risks relating to potential ratings downgrade of the Issuer
The insurer financial strength rating of La Mondiale is an important factor in establishing and
maintaining its competitive position. The rating agency regularly reviews the Issuer's rating. Future
downgrades in the rating (or the potentiality of such a downgrade) could, among other things,
materially increase (mainly regarding collective supplementary pension business) the number of
policy cancellations and non-renewals, adversely affect relationships with the distributors of its
products and services, including new sales of its products, and negatively impact the level of its
premiums and adversely affect its ability to obtain reinsurance at reasonable prices or at all. This could
adversely affect its businesses, financial condition, results of operations and its cost of capital.
Given the current financial condition of La Mondiale, this risk is considered to be "moderate".

10