MILLI_RE_ANNUAL REPORT 2022

50%. Surpassing increases in cat programme prices, loss-impacted risk program saw upward price movements fluctuating between 35% to 150%. On the other hand, price uplifts for the loss-free risk program remained in the range of 15% to 25%. With respect to pro-rata program, decreases in commissions were common in almost all treaties, although higher for poor performing ones. ASIA 2022 saw a healthy building up of business momentum across the region. Vaccination rates were high and economies continued to open up enabling face-to-face meetings and more meaningful dialogues for overdue “catch-ups” between insurers, reinsurers and intermediaries. While continued market hardening was largely expected, few were prepared for the near-perfect storm for a very hard market created by the macroeconomic shocks, geo-political instability and natural catastrophes. Financial markets were roiled by rocketing US interest rate hikes and inflation, international trades were disrupted by the Russian-Ukraine war and the reinsurance industry suffered from significant losses from Hurricane Ian. The region had a relatively quiet year in terms of natural catastrophes, but the global hard market was clearly felt. There were significant reductions in capacity, particularly in the property class. The loss of capacity stems from reducing appetite and the withdrawal of reinsurers from Lloyd’s and company markets. Fortunately, challenging discussions and negotiations were facilitated by the resumption of in-person meetings and the strengths of many long-standing relationships. In recent years, larger insurers in the region have been gradually increasing retentions. This year, the process has been accelerated by the hard market brought about by increasing reinsurance cost, reducing and more selective reinsurance capacities. Thus, providing for an even more challenging hard market during renewals. While the Asia Pacific has been spared from large loss events experienced in recent years, notable losses included the Queensland and New South Wales floods that amounted to an insured loss of USD 4 billion. Other less severe insured events included an earthquake in Fukushima, seasonal flooding and droughts in China. Large risk losses in South Korea also added to the already challenging market. Protection gap is once again highlighted by the disparity between economic and insured losses in major loss events. The seasonal floods in China gave rise to USD 15 billion of losses with an insured loss of only USD 0.4 billion. The economic loss of droughts in China cost USD 7.6 billion but insured losses only amounted to USD 0.2 billion. With the recovering economies in the region, it is hoped that the narrowing of the insurance gap will gain momentum. MIDDLE EAST AND NORTH AFRICA (MENA) Economic activity in the Middle East and North Africa (MENA) region is expected to decelerate sharply in 2023 after strong growth in 2022. While the real GDP growth is anticipated to outperform the overall performance of the world economy over the same period, it is expected to fall to about 3.5% in 2023 from an 18-year high of 6.1% in 2022. The 2023 outlook for the region, particularly for the GCC, appears more upbeat in comparison to the rest of the world. This is due to rising non-oil economic activity and oil prices that are predicted to remain between USD 75 and 96 per barrel in 2023. While global inflationary risks remain, inflation in the region is expected to decline because of rising interest rates and slower global growth. In the GCC, inflation is projected to be 2.7% on average in 2023. It is anticipated that the region’s different economic situations for oil-exporting and oil-importing nations will persist. The insurance markets in the MENA region have grown significantly over the last decade. Due to the global economic downturn brought on by lockdown measures as a result of Covid-19 pandemic and decrease in the demand for oil, the growth rate of MENA region’s insurance market reduced in 2020. However, the region, but particularly GCC, benefited from the relatively improved economic climate and rising demand for insurance due to both an increase in resident population and new mandatory covers in 2022. During the first nine months of 2022, the listed insurers in the GCC had more than 20% growth in their overall turnover, reaching 23.9 billion USD. The eight firms in the region produced 73% of the top line growth, which mainly resulted from cross-border acquisitions, Global Reinsurance Market and Milli Re 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 64 MİLLİ RE 2022 ANNUAL REPORT