MILLI RE 2020 ANNUAL REPORT

Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) NOTES TO THE CONSOLIDATED 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) December 31, 2020 December 31, 2019 Branches Milli Reasürans Anadolu Sigorta Milli Reasürans Anadolu Sigorta Fire and Natural Disasters Standard Chain Standard Chain Standard Chain Standard Chain General Damages (*) Standard Chain Standard Chain Standard Chain Standard Chain General Liability Standard Chain Cape Cod Standard Chain Cape Cod Land Vehicles Liability Standard Chain Cape Cod Standard Chain Cape Cod Marine Standard Chain Standard Chain Standard Chain Standard Chain Sea Vehicles Standard Chain Standard Chain Standard Chain Standard Chain Land Vehicles Standard Chain Standard Chain Standard Chain Standard Chain Casualty Standard Chain Standard Chain Standard Chain Standard Chain Health Standard Chain Standard Chain Standard Chain Standard Chain Air Vehicles Standard Chain Standard Chain Standard Chain Standard Chain Legal Protection Standard Chain Standard Chain Standard Chain Standard Chain Sea Vehicles Liabilities Sector Average (Insurance Association of Turkey 09/2020) Standard Chain Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Air Vehicles Liability Sector Average (Insurance Association of Turkey 09/2020) Standard Chain Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Fidelity Guarantees Sector Average (Insurance Association of Turkey 09/2020) Standard Chain Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Financial Losses Sector Average (Insurance Association of Turkey 09/2020) Standard Chain Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Credit Sector Average (Insurance Association of Turkey 09/2020) Standard Chain Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Life Sector Average (Insurance Association of Turkey 09/2020) - Sector Average (Insurance Association of Turkey 09/2019) - Facultative Third Party Liability - Standard Chain - Standard Chain (*) Two separate calculations have been made as agriculture and non-agriculture subbranches. (Milli Reasürans T.A.Ş.). (**) In accordance with the “Circular numbered 2020/11 on Making Amendments on Communique regarding Provision for Outstanding Claim Files numbered 2014/16” which has been published by Republic of Turkey Ministry of Treasury and Finance on December 7, 2020 and entered into force as of its publication date, an additional calculation is made in terms of Compulsory Financial Liability Insurance regarding Medical Malpractice sub-branch and calculation is made in terms of other sub-branches under General Liability through excluding Compulsory Financial Liability Insurance regarding Medical Malpractice. In accordance with the “Circular numbered 2020/11 on Making Amendments on Communique regarding Provision for Outstanding Claim Files numbered 2014/16” which has been published by Republic of Turkey Ministry of Treasury and Finance on December 7, 2020 and entered into force as of its publication date, IBNR amount is required to be separately calculated for the “Compulsory Financial Liability Insurance regarding Medical Malpractice” sub-branch included under General Liability main branch. In this scope, an additional calculation is made for Compulsory Financial Liability Insurance regarding Medical Malpractice and calculation is made for other sub-branches under General Liability insurance through excluding Compulsory Financial Liability Insurance regarding Medical Malpractice and calculated amounts are recognized on legal books as of December 31, 2020. Anadolu Sigorta, The Constitutional Court has cancelled “general conditions” in the articles of the Highway Traffic Law No. 2918, which are subject to branch of third party liability for motor vehicles, due to unconstitutional. As of December 31, 2020, effect of the cancellation decision has been analysed and reflected in the amount of incurred but not reported claims. The Company, as a reinsurance company, selects data, adjustments, applicable methods and development factors by itself over the data obtained from insurance companies on a branch basis via actuarial methods. According to the article 11 clause 5 of “Circular on Actuarial Report for Non-Life Insurance Branch” dated 6 November 2008, selections and results should be assess in detail in actuarial report by the actuary. The Company does not have sufficient data for ships, aircraft liability, Fidelity Guarantees, financial losses, credits and life branches. Furthermore, claim development tables have irregular distribution for the aforementioned branches. Therefore, the Company prefers to use sector average in the actuarial chain ladder method. According to December 5, 2014 dated “Circular regarding Outstanding Claims Reserves (2014/16)” of Republic of Turkey Ministry of Treasury and Finance, the Company constitutes data by taking base of acceptance year rather than Casualty period for the reason of characteristic of reinsurance operations in course of ACML calculation and calculates ACML once in a year as of yearend. The methods indicated in the table are calculated according to paid claim. 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 197