MILLI RE 2020 ANNUAL REPORT

Activities and Major Developments Related to Activities General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Milli Re Annual Report 2020 16 General Manager’s Message According to the year-end figures published by the Insurance Association of Turkey, total premium production of the Turkish insurance industry in 2020 is TL 82.6 billion, increasing by 19% in nominal and 4% in real terms compared to the previous year. hail, flood and wildfire which are not widely insured. Affecting various sectors and mainly emanating from event cancellation, business interruption and loss of profit covers, the total insured loss amount driven by the Covid-19 pandemic is expected to exceed USD 100 billion. The total reinsurance capacity deteriorated at the beginning of the year; however, by the end of September, it reached 2019 year-end figure of USD 625 billion once again. As the pandemic and losses put further pressure on company balance sheets on top of the limited levels of profitability for the last couple of years and the diminishing investment incomes, many reinsurers opted for increasing rates and tightening the terms and conditions during 2021 January renewals in order to compensate for these negative conditions. Yet, as a consequence of the sufficient levels of capacity and investment returns remaining at relatively positive levels, upward movements in prices were capped at levels lower than expected. As a result of the depreciation in Turkish Lira, the contraction in premiums ceded to the proportional treaties which are mainly denominated in Euro, as well as the deterioration in treaty balances diminished reinsurers’ appetite towards proportional programmes. While the majority of the insurance companies operating in Turkish insurance market continued protecting their portfolios with surplus bouquet treaties on proportional basis after the renewals, leading the reinsurance treaties of 16 ceding companies, our Company maintained its market share of 27% in 2021. Moreover, Milli Re’s involvement across catastrophe excess of loss programmes of the insurance companies was 9%. The Covid-19 pandemic deeply impacted not only the social life but also the economy. In this period, new practices such as remote working and online education came into our lives. Testing its disaster plans and procedures regularly, our Company had the opportunity to challenge its technological infrastructure and operational resilience during these unprecedented conditions caused by the pandemic. Shifting to remote working as of March 2020, Milli Re seamlessly adapted to the “new normal”, thanks to its flexible business processes supported by the technological infrastructure and the skilled workforce.