MILLI_RE_ANNUAL REPORT 2022

Turkish Insurance Market Steadily increasing inflation and decreasing purchasing power throughout the year, the adverse impact of competition on prices and terms, and uncertainties caused by record-breaking inflation and especially by late-month exchange rate volatilities all exerted tremendous pressure on the Turkish insurance industry’s growth and technical profitability in 2022. According to end-2022 figures published by the Insurance Association of Turkey, the country’s insurance industry produced a total of TL 235 billion in premiums, nominally 123% more than in 2021. When the effects of inflation are taken into account, this corresponds to a 36% rate of real year-on growth. In the non-life branches, premium production was up 133% nominally and amounted to TL 204.15 billion. Nominal growth in life insurance premiums was only around 74%. Attributable mainly to a contraction in consumer lending, this weak growth reduced the share of the life branch in the industry’s total premium production from 17% in 2021 to 13% in 2022. Owing to the impact of inflation and exchange rate movements on premiums in the Motor vehicle liability and Motor vehicle branches, which together account for the biggest share of non-life premium production, their share of industry’s total premium production rose from 83% in 2021 to 87% in 2022. Motor vehicle liability premiums, which account for the biggest single component of total premium production, increased 147% nominally and 50% in real terms. This likewise was due mainly to the impact of inflation and exchange rate movements on personal-injury and property-loss claims. As a result of such growth, this branch’s share of non-life premiums increased from 26.6% in 2021 to 28.2% in 2022 and continued to exert increasingly more pressure on the industry’s technical results. Adjustments had to be made in motor vehicle policy prices in order to keep them in alignment with rises in motor-vehicle and spare-part costs. As a result of these changes, motor vehicle premiums increased by 212% nominally (90% in real terms) year-on and their share of non-life premiums rose from 16% to 22%. Owing not only to the impact of inflation on medical care costs but also to increased demand for health coverage during the pandemic, private health and complementary health policy premiums continued to grow and were up 130% nominally in 2022. Premium production in the complementary health branch was up 82% in real terms, thus making it possible for health premiums to maintain their 15% share of non-life premiums. Because their nominal 95% year- on rise lagged behind that of non-life branches as a whole, the share of fire and catastrophe insurance premiums in total non- life premium production shrank from 16% to 13%. In real terms, premium production growth in these two branches was 18.5%. The biggest causes of this relatively slower growth were contractions in commercial risk and compulsory earthquake policy premiums, whose shares of non-life premium production last year were 39% and 13% respectively. In the Fire branch, premium production was up 100% nominally while the share of these policies’ premiums in the non-life total increased from 68% to The Turkish insurance industry produced a total of TL 235 billion in premiums, nominally 123% more than in 2021. 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 52 MİLLİ RE 2022 ANNUAL REPORT