MILLI_RE_ANNUAL REPORT 2022

70%. The growth in the Fire branch reflects dramatic increases in house prices covered by homeowners insurance, of which fire coverage is one of the components. While the effects of economic and competitive conditions kept the overall increase in commercial risk premiums somewhat ahead of inflation, premiums received on industrial risk policies actually grew by 27% in real terms largely because when these policies are renewed, both their insured values and their premiums are FX-denominated or inflation- indexed in a significant number of instances. The nominal rise in catastrophe insurance premiums was 84% and this branch’s share of total premium receipts fell from 32% in 2021 to 30% in 2022. The chief reason for this two percentage-point decline is that when inflation is taken into account, the 43% year-on rise in compulsory earthquake premiums actually corresponds to a 13% contraction in real terms. 96% of all premium production in the General losses branch (Engineering, Agriculture, Theft, and Glass breakage coverage) is generated by engineering and state-subsidized agricultural insurance policies. Premiums received on engineering policies was up 119% nominally and 42% in real terms while their share of all General losses premiums increased from 42% in 2021 to 46% in 2022. This growth was nourished especially by a more than 150% rise in electronic equipment and construction policy premiums. Machinery breakdown premiums were up by 81% year-on largely because such policies tend to be FX-indexed or denominated; however there was also some improvement in their overall pricing. Despite steadily increasing awareness of Agriculture insurance and the provision of such coverage, this branch’s premium production growth lagged behind that of the industry as a whole and was only 86% year-on, with its share of General losses dropping three points from 53% in 2021 to 50% in 2022. The decline is attributable to the host of challenges with which farmers in Turkey are confronted. Shipping insurance is divided into three subbranches: Hull, Cargo, and Hull liability insurance. Although premium production in the Shipping branch more than doubled (up 109%) in 2022, its contribution to overall non-life premium production was only around 3%. Looking at the individual subbranches, Cargo premiums increased by 108%, consistent with both exchange rate movements and an expansion in trade, while Hull liability premiums grew by a much heftier 169%. Hull premiums were up 107% year-on, chiefly because such policies tend to be FX- denominated but also because of renewed vigor in shipbuilding. Below-average (85%) year-on growth in General liability premiums reduced their share of non-life premium production from 4% in 2021 to 3% in 2022. Although the General liability branch consists of fourteen subbranches, 95% of the premiums earned in this branch come from just four of them: Third- party financial liability, Employer financial liability, Professional liability, and Product liability. More than 90% of premium receipts in the Accident branch were earned on Personal accident policies last year. Premium production in the Accident branch increased by 93% nominally, reflecting movements in consumer loans and exchange rates; however as this growth was below the industry average, the branch’s IN THE NON-LIFE BRANCHES, PREMIUM PRODUCTION WAS UP 133% NOMINALLY AND AMOUNTED TO TL 204.2 BILLION. 133% 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 53 MİLLİ RE 2022 ANNUAL REPORT