MILLIRE 2021 ANNUAL REPORT

FINANCIAL STATUS 73 MİLLİ RE ANNUAL REPORT 2021 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 Premium income from Land Vehicles Liability that has the highest share in the sector remained limited. Having showed a nominal growth of 13.8% and a contraction of 16.4% against inflation, the share of the branch in Non-Life total premium dropped from 30.1% to 26.6%, creating a negative impact on the overall sector’s growth. Having 16.3% share in Non-Life, Land Vehicles’ annual nominal growth was 33.1%, which translated into a contraction by 2.2% in real terms. Owing to the strengthened positive perception of Health insurance during the pandemic and to the reflection of medical inflation on premiums, premiums from Private Health and Complementary Health Insurances grew by 29.5%, and specifically Complementary Health insurance registered a real growth of 27.3%. Although the annual real change in total premium from Health shrank by 4.8% in real terms, the branch was able to preserve its 15% share in Non-Life. The share of Fire and Natural Catastrophe Perils in non-life premiums rose to 16% in line with the 32.7% nominal increase in premium income as compared with the previous year. Although it corresponds to 2.5% contraction in real terms, Fire and Natural Catastrophe Perils was among the lines generating the highest premium growth. In the period ahead, currency movements, the growth in exports and the economy will be main factors that would have a significant effect on the progress of the insurance industry. It is expected that the initiatives to provide insurance coverage to major Public-Private Partnership (PPP) infrastructure projects, growth in the scope and penetration of the agricultural insurance pool Tarsim, increase in the insurance penetration in industrial risks and SMEs will help raise the share of insurance in the economy. Most insurance companies operating in the industry continued to protect their risk portfolios with surplus bouquet treaties on proportional basis also in 2022. On the other hand, Milli Re participated in the programs of six of the eight companies that utilize Excess of Loss agreements for their risk protection. Following January 2022 renewals, Milli Re provides capacity to 23 companies that utilize proportional treaties in the overall market, leads reinsurance treaties of 18 companies and has 27% market share. Pursuing a consistent and prudent strategy in its operations, Milli Re’s premium increased by 36% compared to the previous year and reached TL 2,483 million. The Company generated 74.2% of its total premiums from local business and the remaining 25.8% from international portfolio. With paid claims increasing by 30.51% to TL 1,374 million, the Company booked a net profit of TL 549 million in 2021. Having provided reinsurance capacity to the Turkish insurance market since 1929; within the strategy of penetrating foreign markets, our Company started focusing on international business since 2006 and our Singapore branch, which started operations in 2008 in line with this strategy, completed its 15 th year. Despite the challenges posed by the intensely competitive environment and rapidly changing circumstances both in international and local markets, Milli Re demonstrates stable performance thanks to its experience, robust financial structure and know-how that goes back many years. With the ability to thoroughly examine and efficiently respond to market dynamics, our Company provides reinsurance capacity to 95 ceding companies from 37 countries through a wide range of products offered within the framework of its meticulously pursued underwriting policy and it successfully continues its operations in line with the aim of being a sought after business partner in the international arena as well as in Turkey. Committed to the Turkish insurance industry and the national economy by delivering services at best practice standards along with effective solutions for over 90 years established on the deep-rooted corporate culture and experience, our Company has maintained and further improved its position as the leading reinsurer in the local market in 2021 despite the pandemic and the volatile economic conjuncture thanks to its solid capitalization and technical infrastructure. Keeping up with its vision of being a preferred reinsurer also in other markets where it is active, Milli Re aims to carry its achievements into the future in alignment with its profit-oriented and sustainable growth objectives. We sincerely thank all our stakeholders who played a big part in the 2021 performance of our Company as it confidently continues to flourish with the contribution of its solid capitalization and the synergy created with its business partners. Sincerely, BOARD OF DIRECTORS