MILLIRE 2021 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 60 MİLLİ RE ANNUAL REPORT 2021 GLOBAL REINSURANCE MARKET AND MİLLİ RE International Portfolio 2021 Results In order to diversify the portfolio in line with its profit-oriented and sustainable growth approach, Milli Re started to play a more active role 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 accepting business in 2008, Milli Re Singapore Branch continues to work efficiently in the Far East, a region which represents significant potential. In 2021, Milli Re maintained its position as a preferred business partner by providing reinsurance capacity to 95 companies in 37 countries in the emerging markets. Milli Re continue to support its existing business partners within the scope of its overseas activities by prioritizing long term business relationships based on solid foundations and rapidly responding to the changing market conditions, as well as taking the necessary steps to increase profitability with portfolio diversity by acquiring new businesses in line with its risk appetite. Within the framework of the strategy to develop international activities, Milli Re have been underwriting business from developed markets by participating in conventional reinsurance contracts of leading global reinsurers as well as providing capacity to several leading global reinsurers and Lloyd’s syndicates since 2007. Due to the competition stemming from excess reinsurance capacity, minimum rating requirement that is applied in an increasing number of markets as per regulatory frameworks, compulsory reinsurance practices becoming widespread as a result of the protectionist policies and Solvency II implementations, in 2021 there were cancellations and reductions in our participations regarding some business accepted from Middle East but particularly in Saudi Arabia where the minimum rating requirement is strictly applied. However, premium income generated by the Emerging Markets Portfolio in 2021 amounted to TL 432 million owing to long-standing solid relationship with clients, the high-quality service rendered and currency movements. On the other hand, premium production on developed markets portfolio surpassed TL 207 million registering 32% growth in connection with some treaties renewing with higher shares in 2021, and the new business relationship established with a Lloyd’s syndicate, in addition to the increased treaty premium volumes that resulted from the upward price movements arising from more disciplined underwriting approach adapted by the international markets. Despite the growth in premium income, the decline in foreign currency denominated incurred losses, as well as the positive effect of currency differences and evaluation income, the underwriting result for the international portfolio was TL 27 million loss in 2021 due to the severe negative impact of depreciated Turkish Lira on outstanding claims provisions and retrocession costs. TL 639 million The total premium production of the international portfolio reached TL 639 million in 2021.