As per law no 1160 published in 1927, reinsurance transactions within national borders have become compulsory for insurance companies operating in Turkey, followed by the decision to establish a joint stock company to accept and manage these compulsory cessions.

Assigned with the task, Türkiye İş Bankası (İşbank) founded Milli Reasürans T.A.Ş. (Milli Re) to operate the compulsory reinsurance system on 19 July 1929.

A key contributor to the development of the Turkish insurance industry, Milli Re is the first and only private company operating a compulsory reinsurance system in the world. The system in place is distinguished from similar practices essentially by the fact that compulsory reinsurance concessions cover all insurance branches.

The benefits contributed to the Turkish insurance industry by Milli Re while operating the compulsory reinsurance system include the following:

• Nationalization of the Turkish insurance industry

• Generation of continuous revenues for the Turkish Treasury

• Significant reduction in the outflow of foreign currencies

• Execution of training and education programs in insurance business

• Conducting top-notch international relations

Following the abolition of this system, Turkey has won a financially sound national reinsurance company ranking among the top hundred companies in the world reinsurance
market.

Milli Re managed the Turkish Reinsurance Pool from 1963 to 1985, and the Economic Cooperation Organization (ECO) Pool from 1975 to 1995. The company contributed to the formation of TCIP and was the first administrator that has been undertaken for five years. Milli Re has also been managing the Federation of Afro-Asian Insurers and Reinsurers (FAIR) Pool since 1974.

Accepting business on a voluntary basis from the Turkish insurance industry since 1991, Milli Re currently fulfills nearly 30% of the industry's need for reinsurance coverage.

In line with a new strategy adopted, Milli Re started to focus more heavily on writing business from overseas markets, which was performed at a very limited level previously. With the purpose of balancing the company's local acceptances with the foreign business, this strategy was reinforced and supported by the strengthening of the Turkish Lira against hard currencies, as well as its robust financial structure. In foreign acceptances, specific targets are centered on emerging Asian and African countries along with Middle Eastern and East European countries.

Milli Re successfully completed in 2007 the formalities for opening a branch in Singapore, which marks the first step of the plans to expand its presence across national borders. The relevant operation permit request approved on 22 November 2007, Milli Re believes that the Singapore Branch will hold a position of special importance in terms of tapping the existing reinsurance business potential in the Asia-Pacific region.

A.M. Best rating agency upgraded Milli Re's financial strength rating (FSR) to B++ (Stable) from B+ (Positive) on 13 December 2007, due to the reduced effect of country risk factors in rating methodologies.

In view of the increased volume of foreign capital in the Turkish insurance industry and recognizing the sensitive approach of companies fully owned or participated by foreigners to FSR, Milli Re applied for a FSR on a “national scale” for the first time to S&P (Standard & Poor's). Upon necessary reviews, S&P assigned a “trA+” Turkish national scale rating for Milli Re, specifically emphasizing the company's leading position in the Turkish insurance market and strong capitalization.

Section 6 of the articles of association which pertains to capital has been amended due to the fact that Milli Re's capital has been raised from TRY 343 million to TRY 385 million at the extraordinary general meeting convened on 04 December 2007.