MILLIRE_2019_Annual Report

Milli Re Annual Report 2019 121 Activities and Major Developments Related to Activities 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 General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Millî Reasürans Türk Anonim Şirketi NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) (Currency: Turkish Lira (TL)) The methods selected for each branch is provided in the following section. The Company has not perform big claim elimination by Box Plox method. Branches December 31, 2019 December 31, 2018 Fire and Natural Disasters Standard Chain Standard Chain General Damages (*) Standard Chain Standard Chain General Liabilities Standard Chain Standard Chain Land Vehicles Liabilities Standard Chain Standard Chain Marine Standard Chain Standard Chain Sea Vehicles Standard Chain Standard Chain Land Vehicles Standard Chain Standard Chain Casualty Standard Chain Standard Chain Health Standard Chain Standard Chain Air Vehicles Standard Chain Standard Chain Legal Protection Standard Chain Standard Chain Sea Vehicles Liability Sector Average (Insurance Association of Turkey 09/2019) Sector Average (Insurance Association of Turkey 09/2018) Air Vehicles Liability Sector Average (Insurance Association of Turkey 09/2019) Sector Average (Insurance Association of Turkey 09/2018) Fidelity Guarantees Sector Average (Insurance Association of Turkey 09/2019) Sector Average (Insurance Association of Turkey 09/2018) Financial Losses Sector Average (Insurance Association of Turkey 09/2019) Sector Average (Insurance Association of Turkey 09/2018) Credit Sector Average (Insurance Association of Turkey 09/2019) Sector Average (Insurance Association of Turkey 09/2018) Life Sector Average (Insurance Association of Turkey 09/2019) Sector Average (Insurance Association of Turkey 09/2018) (*) Two separate calculation have been made as agriculture and non agriculture sub branches. 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 November 6, 2008, selections and results should be assess in detail in actuarial report by the actuary. The Company does not have sufficient data for ships, Air Vehicles 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 Reserve (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 year end. The methods indicated in the table are calculated according to paid claim. Salvage and subrogation income which will be deducted in the calculation of ACML stated by the Undersecretariat should be based on collected amount (collected amount includes interest income over salvage and subrogation income, expertise, consultant and lawsuit expenses). Collections are taken into account according to their collection period.