In this article, we investigate two strategies for coarsening fractured geological models. The first approach, which generates grids that resolve the fractures, is referred to as explicit fracture-matrix separation (EFMS). The second approach is based on a non-uniform coarsening strategy introduced in Aarnes et al. (Adv Water Resour 30(11):2177-2193, 2007a). A series of two-phase flow simulations where the saturation is modeled on the respective coarse grids are performed. The accuracy of the resulting solutions is examined, and the robustness of the two strategies is assessed with respect to number of fractures, degree of coarsening, well locations, phase viscosities, and fracture permeability. The numerical results show that saturation solutions obtained on the non-uniform coarse grids are consistently more accurate than the corresponding saturation solutions obtained on the EFMS grids. The numerical results also reveal that it is much easier to tune the upscaling factor with the non-uniform coarsening approach.