MILLI_RE_ANNUAL REPORT 2022

strategic alliances, inward business and inorganic growth. However, underwriting performance deteriorated compared to the previous year. Spending on claims and administration increased as a result of increased mobility and greater domestic inflation. Despite interest rate increases, insurers experienced a 4.5% reduction in investment income due to capital market volatility, particularly those in the UAE, Bahrain, Kuwait, and Qatar that have significant holdings in high- risk assets like equities and real estate. In the first nine months of 2022, the net profit decreased by 28.6% to USD 723 million from USD 1.01 billion in third quarter 2021 due to an increase in net combined expenses and lower investment income. The Region’s efforts to attract capital continue and concurrently, merger pipeline is still quite active, with several mergers nearing completion and several successful M&A agreements coming to fruition. The Region’s reinsurance market is facing fresh and varying challenges including supply chain disruptions, inflationary pressures and political volatility in some markets. However, the region is not uniform and different economic situations for oil-exporting and oil-importing countries are anticipated to persist throughout the region. Reinsurers operating in the region benefited from hardening market conditions over the past few years and experienced continued price rises due to rising claims inflation, increase in large loss frequency, and improved market discipline. A reviving economy, resource extraction, and plans to boost insurance penetration are all considered as factors supporting the region’s potential for growth in reinsurance. In 2022, a series of natural catastrophes caused millions of dollars worth economic loss in the region but the insured loss has been relatively limited. The heavy rains that caused IN MENA REGION, THE PRICES OF LOSS FREE NON- PROPORTIONAL PROGRAMS INCREASED BY 5% TO 30% WHILE RATE INCREASES UP TO 50% WERE WITNESSED IN RESPECT OF LOSS HIT PROGRAMS. 50% 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 65 MİLLİ RE 2022 ANNUAL REPORT