MILLIRE ENG2024

In accordance with December 5, 2014 dated and 2014/16 numbered “Circular for Outstanding Claims Reserve” of Republic of Turkey Ministry of Treasury and Finance, ACLM calculation should be on main branch. However, as at December 31, 2012, the Company has calculated ACLM reserve for General Losses main branch as two separate subbranches namely agriculture and non-agriculture branches. Because Agriculture and Engineering subbranches under General Losses main branch have different characteristics in conversion process of outstanding losses to paid losses, IBNR calculation of General Losses branch produces unreliable and improper results. The Company applied to Republic of Turkey Ministry of Treasury and Finance on January 17, 2013 with letter numbered 300, so as to receive permission to calculate IBNR reserve for General Losses branch as agriculture and non-agriculture subbranches separately. Republic of Turkey Ministry of Treasury and Finance has given permission the Company in order to calculate IBNR reserve for General Losses within two subbranches with the letter dated January 28, 2013 and numbered 24179134. As of December 31, 2023, the Company recognised the amount that arose due to change in calculation method for IBNR on General Losses branch. In accordance with the “Circular numbered 2020/11 on Making Amendments on Communique regarding Provision for Outstanding Claim Files numbered 2014/16” which has been published on December 7, 2020 and entered into force as of its publication date, IBNR amount is required to be separately calculated for the “Compulsory Financial Liability Insurance regarding Medical Malpractice” sub-branch which was included under General Liability main branch. In this scope, an additional calculation is made for Compulsory Financial Liability Insurance regarding Medical Malpractice and calculation is made for other sub-branches under General Liability insurance through excluding Compulsory Financial Liability Insurance regarding Medical Malpractice and calculated amounts are recognized on legal books as of December 31, 2024. As explained in the Circular (2017/07) on Discounting Net Cash Flows Arising from the Provision of Outstanding Compensation published on September 15, 2017, insurance companies will be able to discount the net cash flows generated by the provision of outstanding compensation that they allocate in accordance with the insurance legislation according to the principles set out in the circular. In accordance with the circular no 1 in the article, it has been made mandatory to apply discounts in the “General Liability” and “Land Vehicles Liability” branches of the provision for outstanding compensation. The company has chosen to apply discounts only for mandatory branches and no discounts are made for other branches. With the Circular No. 2024/3 “Circular on Amendments to Circular No. 2016/22 on Discounting Net Cash Flows Arising from the Provision for Outstanding Compensation” published on January 15, 2024, the Circular’s 7 th article was changed as “Net cash flows are discounted to cash value by taking into account 35% as of the financial reporting date”. In accordance with the relevant general circular, the discount rate applied to the net cash flows arising from the outstanding claims reserve has been 35% as of December 31, 2024 (December 31, 2023: 28%). Accordingly, the Company has calculated the net discounted amount of the outstanding claims reserve as 1,960,424,461 TRY as of December 31, 2024 (December 31, 2023: 923,111,219 TRY). The change in the discount rate has resulted in a reduction of 221,786,939 TRY on the net outstanding claims reserve recognized in the financial statements as of December 31, 2024. The Company’s net outstanding claims provisions by branch as of December 31, 2024 and 2023 are given below, before and after discount: December 31, 2024 Branches Net outstanding claims before discount Discount Amount Discounted net outstanding claims provision Land Vehicles Liabilities 635.982.639 (371.816.439) 264.166.200 General Liabilities 2.167.620.695 (1.588.608.022) 579.012.673 Total 2.803.603.334 (1.960.424.461) 843.178.873 December 31, 2023 Branches Net outstanding claims before discount Discount Amount Discounted net outstanding claims provision Land Vehicles Liabilities 368.376.477 (186.857.862) 181.518.615 General Liabilities 1.127.031.106 (736.253.357) 390.777.749 Total 1.495.407.583 (923.111.219) 572.296.364 128 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) Notes to the Unconsolidated Financial Statements As of December 31, 2024 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish) MİLLİ RE