Groupama is technically insolvent and soon will need to be seen as no longer a going concern.

What the market seems to be saying: Groupama is technically insolvent and soon will need to be seen as no longer a going concern.Groupamamay stop paying coupons Groupama may not call the bonds All investment risks on strategic securities are for the account of the shareholdersWhat we believe to be the case:  Groupama is one of the largest insurers in France and among the largest in Europe and it is technically solvent but weakly capitalised Groupama has paid all its coupons despite having the option to defer on one of the bonds and has a vested interest in abiding by market practice as it moves towards demutualisation Groupama call its dated subordinated bond at the second call date (call 2009/ redemption 2010) and we expect it to continue to do so. 75% of the assets are backing the life insurance funds and it is logical that most investment risk will be borne by the policyholders over the life of the policies on the basis of their returns.

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