Carrefour - 2017 Registration Document

MANAGEMENT’S DISCUSSION AND ANALYSIS AS OF DECEMBER 31, 2017 Risk management 2017 REGISTRATION DOCUMENT | CARREFOUR 4. 202 Insurance 4.7.3 For the past several years, the Group’s insurance strategy has focused on providing the best possible protection for people and assets. Group insurance policy 4.7.3.1 The Group’s insurance strategy is primarily based on identifying insurable risks through a regular review of existing and emerging risks, in close cooperation with operational managers, the various Carrefour group departments involved and external specialists. Worldwide programmes The Carrefour group has implemented comprehensive, worldwide programmes (especially for property damage and business interruption and civil liability policies) that provide uniform coverage for all formats (consolidated stores only), wherever the stores are located (except in countries where regulations prohibit this type of programme). Thus, the Group has a solid understanding of the limits of the coverage in place, and the certainty that its insurance programmes have been taken out with leading global insurers. Acquisitions during the year The Carrefour group ensures that acquisitions carried out over the course of the insurance year are quickly covered under its comprehensive programmes, or, where applicable, benefit from its DIC/DIL (difference in conditions/difference in limits) coverage policies, in order to ensure solid control over existing coverage and benefits. Prevention policy The Group’s insurance policy requires that risk prevention measures be monitored by the Group Risks & Compliance Department in coordination with local Group liaisons in each country, as well as with the Group’s insurers. Transfer of risk to the insurance market The Group transfers identified insurable risks to the insurance market or self-insures, in accordance with the Group insurance policy and consistent with the Group’s general policies. Self-insurance of certain risks In order to optimise insurance costs and better manage risk, the Group has a policy of maintaining certain high-frequency risks within property damage and business interruption, civil liability and goods transportation through its captive re-insurance company. The results of this captive company are consolidated in the Group’s financial statements. A stop-loss provision per claim and per insurance year has been established in order to protect the captive company’s interests and limit its commitments. Information concerning the main 4.7.3.2 insurance programmes The following is provided for information purposes only in order to illustrate the scope of action in 2017. This information should not be regarded as unchanging, since the insurance market is constantly evolving. The Group’s insurance strategy therefore depends on and adapts to insurance market conditions. Property damage and business interruption coverage This insurance protects the Group’s assets through an “all risks, with exceptions” policy, on the basis of guarantees available on the insurance market to cover the traditional risks for this type of coverage, which include fire, lightning, theft, natural disaster and the resulting operating losses. The limits of this property damage and business interruption policy are consistent with those of an international retail company. Deductibles are established as appropriate for the various store formats. Exclusions in force for this policy comply with market practices. Civil liability coverage This programme is intended to cover the Group’s activities against the financial consequences of its civil liability in the event that the Company may be held liable for resulting damage and/or bodily harm caused to third parties. The limits of this civil liability policy are consistent with those of an international retail company. Deductibles vary from country to country. Exclusions in force for this policy comply with market practices. The Group is also covered against the risk of harming the environment as part of its comprehensive, worldwide civil liability insurance programme. Mandatory insurance The Group takes out different insurance programmes in accordance with local law, including: auto insurance; ● construction insurance (building defects, ten-year builder ● liability, etc.); professional liability insurance related to its activities: ● banking, ● insurance, ● travel. ●