MILLIRE_2019_Annual Report

Milli Re Annual Report 2019 63 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 Russia The gross written premium production in the Russian market reached up to EUR 16 billion in the first 9 months of 2019, registering a 9.5% growth compared to the same period of the previous year, as a result of exchange rate being in favour of Rubles. Most significant contribution to this market growth came from Non-life insurance with a growth rate of 5.7%. Life insurance shrunk by more than 11%, contrary to the increases in the previous years. The decrease in life insurance premiums was mainly due to the reduction in the number of permanent life insurance policies, which has been the locomotive of the life insurance by growing 50 times in the last 7 years. The share of the life insurance in the total premium production stands around 30%. Due to the regulatory changes made by The Central Bank of the Russian Federation in the last few years in respect of capital adequacy, the companies having issues with their capital continued to close down or join to the large companies. As a result, the number of the insurance companies in the country decreased year by year, from 395 in 2019 to 227 at the beginning of 2020 and the market share of the big companies increased gradually. The market share of the 4 largest life insurance companies stand around 70%, while the market share of top 10 Non-life companies has reached 80%. There were no large natural catastrophes occurred in 2019 and the risk losses were on a small scale, mirroring the previous year. In January 2020 renewals, the loss affected programmes have seen rate increases from 5% to 15%, while the rate for the loss free programmes has decreased by 2.5% to 5%. International Portfolio 2019 Results In order to diversify the portfolio in line with its profit-oriented and sustainable growth approach, Milli Re started to become more active in international reinsurance markets in 2006. International portfolio of the Company consists of business written from emerging markets, Singapore Branch Office business, Pools (FAIR/ECO/TRP), Turkish Republic of Northern Cyprus business, as well as business accepted from developed markets. A significant portion of the international portfolio is made up of emerging markets business from countries that fall under the scope of FAIR Reinsurance Pool, which has been managed by Milli Re since its establishment in 1974. Additionally, having started its operations in 2008, Milli Re Singapore Branch continues to work efficiently in the Far East, a region which represents significant potential. The number of the insurance companies in Russia, which was 395 in 2014, decreased to 227 in the beginning of 2019. 227 Milli Re provides reinsurance capacity to around 130 insurance companies in international markets.