MILLI RE 2023 ANNUAL REPORT

in real terms) year-on. A significant contributor to the technical profitability of non-life branches, this branch’s share in total non-life sector is recorded as 19.6%. Illness/Health branch is likely to keep flourishing as the positive perception of the branch strengthened during the pandemic period and medical inflation was reflected in the premiums, coupled with the new products and services offered alongside the currently available complementary and private health insurance policies. During 2023, premiums written in this branch augmented by 135.4% translating into 42.9% real growth, driving the branch’s share in total Non-Life insurance up from 14.7% in 2022 to 16.5% in 2023. Fire and Natural Disasters insurance grew by 139.5% nominally and 45.4% in real terms in 2023, which brought the share of this branch in Non-Life premium production from 13.4% up to 15.3%. The significant expansion of the said branch in 2023 was mainly due to the rise in policy prices in the aftermath of the earthquake disaster of February 6 th , coupled with the increase in insurance prices in connection with the course of inflation and exchange rates. 95.5% of all premium production in the General losses branch (Engineering, Agriculture, Theft, and Glass breakage coverage) is generated by engineering and agricultural insurance policies. The growth attained in Engineering insurance, particularly in Machinery Breakdown and Electronics segments resulted in an expansion by 115.3% in nominal and 30.7% in real terms; as a result, the share of this branch in General Losses went up from 46% to 48.5%. The course of exchange rates has been the main factor that brought the premium growth in Machinery Breakdown and Electronics policies, which are mostly made in FC terms due to their nature. While efforts for achieving higher penetration in Agricultural Insurance are ongoing, the rise in this branch in 2023 was below the premium expansion of the overall industry and registered as 92% in nominal terms, which corresponds to 16.5% in real terms. Hence, the share of the branch in General Losses went down from 50% to 47.1%. Comprised of Hull, Cargo and Hull Liability insurance, Marine branch registered an increase by 76.9% nominally and 7.4% in real terms, resulting in a marginal year-on decline in the share of this branch in Non-Life premium income to 2.6%. Representing 59.7% and 35.9% of this branch respectively, Cargo and Hull policies lagged behind the sector’s overall premium growth, which caused Marine insurance to account for a lower share of Non-Life premiums. Although growing trade volume and exchange rate movements are anticipated to reflect more positively on premium income, the ongoing competition bore a restrictive impact on premium increase. In General Liability insurance, 67.6% of total premiums were written on Employer’s Liability and Third Party Liability branches; owing mainly to the premium growth secured in these branches, General Liability insurance expanded by 88.1% nominally and 14.1% in real terms. Having underperformed as compared to the average growth by the overall market, General Liability branch sustained a slight decline in its share in Non-Life premiums annually and stood at 2.6%. In Accident insurance, 97% of which comprises of Personal Accident and Extended Personal Accident branches, the rate of increase was 132.6% nominally, corresponding to 41.2% in real terms. With this increase that outdid the market average, the branch attained a slight rise in its share in Non-Life, which came to 2.6%. On the other hand, premiums derived on Participation insurance constituted 5% of the sector’s total premium income PRESSURED FOR SOME TIME WITH RESPECT TO GROWTH AND TECHNICAL PROFITABILITY, OUR INDUSTRY SEIZED A POSITIVE MOMENTUM AS CORRECT PRICING AND NECESSARY TECHNICAL CONDITIONS WERE SECURED FOLLOWING THE EARTHQUAKE DISASTER OF FEBRUARY 2023, AS WELL AS THE POLICY PRICES THAT CAPTURED THE EXCHANGE RATE AND INFLATION EFFECT. 49 GENERAL INFORMATION FINANCIAL RIGHTS PROVIDEDTOTHE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES RESEARCH & DEVELOPMENT ACTIVITIES FINANCIAL STATUS FINANCIAL INFORMATION 2023 Annual Report RISKS AND ASSESSMENT OF THE GOVERNING BODY