MILLI RE 2023 ANNUAL REPORT

GLOBAL REINSURANCE MARKET AND MİLLİ RE to elevated economic, financial system, and geo-political instability in certain markets. The primary differentiator in the region will continue to be between the hydrocarbon-producing economies and those that import energy. The reinsurance capacity in the region continues to be highly variable and dynamic, coming from international reinsurers, reinsurers with regional domiciles, and reinsurance organizations from Africa and Asia. Additionally, regional primary insurance providers are growing more eager to take part in the reinsurance market. The region endured above average economic and insured losses in 2023. Much of the region experienced notable weather and climate driven catastrophes of which record hail and flooding proved most impactful. In North Africa, Storm Daniel caused devastating flooding in Libya, which claimed nearly 4,361 lives and resulted in an economic loss of USD 10.1 billion. Losses in the region were led by the September magnitude 6.8 Marrakesh-Safi earthquake with the epicenter in Morocco’s Atlas Mountains. The earthquake claimed nearly 3,000 lives and generated an economic loss of at least USD 7 billion, of which over USD 500 million was insured. During 2023 renewals since the MENA Region has a diversifying effect and contributing positively to the average cost of capital of many reinsurers, it was still an attractive region. There was no shortage of capacity, but it came with a price. The ceding companies with better historical results had easier access to capacity but even in that case the reinsurers held their discipline and refused to renew any business with the expiring terms and conditions. In many of the cases, surplus lines were either completely removed and restructured with enlarged quota shares or the number of lines were reduced. Additionally, the reinsurers offered limited nat-cat cover particularly under proportional treaties. Similarly, many large excess-of-loss programs, were renegotiated with rate increases in many of them. Therefore, although limited compared to the other markets, the market hardening was also felt in the region. With reference to January 2024 renewal, there was not much further hardening compared to previous renewals except in some proportional treaties where the results did not meet the reinsurers’ expectations. Although there was no shortage in capacity and placement process was smooth, the number of the leading reinsurers reduced. The prices of loss free non- proportional programs remained either unchanged or 10% increases were experienced in some of them while there were rate increases up to 35% in loss hit risk programs. Finally, up to 25% rate increases were witnessed in respect of loss hit cat programs. CENTRAL AND EASTERN EUROPE The CEE region historically has seen strong GDP growth, and this trend is expected to continue in the year ahead. The region’s economy has more than doubled since 2000. Despite the region faced weaknesses such as surging inflation, looming energy crisis and an economic slowdown, IMF predicts that the real GDP growth in CEE in 2027 will be higher than the average for G7 countries (1.5%). Gross Written Premiums for the CEE region totaled EUR 24.78 billion in the first half of 2023, an increase of nearly 11.8% year over year. Meanwhile, the amount of paid claims decreased by 9.7% year on year reaching to EUR 11.34 billion (figures excluding Croatia and Slovenia). Every market in CEE region experienced growth, often in double-digit percentages. With about 26%, Albania and Bulgaria showed the highest growth rates. High growth rates were also reported by Poland, the Baltic States, Czechia, and a few countries in the Western Balkans, including Kosovo, Serbia, and North IN MIDDLE AND CENTRAL EUROPE, AS FAR AS 2023 RENEWALS ARE CONCERNED, THERE WERE INCREASES IN RETENTION LEVELS, ADDITIONAL CAPACITY PURCHASE. 62 MİLLİ RE