MILLI RE 2020 ANNUAL REPORT

Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) 17 Insurance contract liabilities and reinsurance assets Estimation of the ultimate payment for the outstanding claims is one of the most important accounting assumptions of the Company. Estimation of the insurance contract liabilities contains several ambiguities by nature. The Company makes calculation of the related insurance technical provisions accordance with the Insurance Legislation and reflects them into financial statements as mentioned in Note 2 - Summary of significant accounting policies . As of December 31, 2020, and 2019, technical reserves of the Company are as follows: December 31, 2020 December 31, 2019 Unearned premiums reserve, gross 840.067.426 751.413.623 Unearned premiums reserve, ceded (Note 10) (20.130.822) (44.693.136) Unearned premiums reserve, net 819.936.604 706.720.487 Outstanding claims reserve, gross 1.710.325.122 1.455.609.062 Outstanding claims reserve, ceded (Note 10) (78.871.381) (90.544.841) Outstanding claims reserve, net 1.631.453.741 1.365.064.221 Unexpired risks reserve, gross 48.745.980 24.096.177 Unexpired risks reserve, ceded (Note 10) (597.586) (571.885) Unexpired risks reserve, net 48.148.394 23.524.292 Equalization reserve, net 184.672.350 139.752.880 Mathematical reserves 13.014 38.691 Total technical reserves, net 2.684.224.103 2.235.100.571 Short-term 2.499.551.753 2.095.347.691 Medium and long-term 184.672.350 139.752.880 Total technical reserves, net 2.684.224.103 2.235.100.571 As of December 31, 2020, and 2019, movements of the insurance liabilities and related reinsurance assets are presented below: Unearned premiums reserve December 31, 2020 Gross Ceded Net Unearned premiums reserve at the beginning of the period 751.413.623 (44.693.136) 706.720.487 Written premiums during the period 1.820.275.306 (238.964.890) 1.581.310.416 Earned premiums during the period (1.731.621.503) 263.527.204 (1.468.094.299) Unearned premiums reserve at the end of the period 840.067.426 (20.130.822) 819.936.604 Unearned premiums reserve December 31, 2019 Gross Ceded Net Unearned premiums reserve at the beginning of the period 597.910.179 (18.693.888) 579.216.291 Written premiums during the period 1.658.819.927 (205.915.052) 1.452.904.875 Earned premiums during the period (1.505.316.483) 179.915.804 (1.325.400.679) Unearned premiums reserve at the end of the period 751.413.623 (44.693.136) 706.720.487 Financial Status Risks and Assessment of the Governing Body Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon Consolidated Financial Statements Together with Independent Auditors’ Report Thereon Milli Re Annual Report 2020 145