MILLIRE ENG2024

General Manager’s Message The agenda topics carried over from 2024, when geopolitical risks and uncertainties continued to increase and global macroeconomic dynamics were greatly affected, suggest a volatile outlook for 2025. The second half of 2024 marked the beginning of observable effects from anti-inflationary policies focused on interest rate hikes. As a result of these effects, it is anticipated that the interest rate cut cycle, initiated by the central banks of advanced economies, will continue in a manner that supports the positive trend in the inflation outlook, emerging as a key determinant in financial markets in the upcoming period. As the Russia-Ukraine war enters its third year, persistent tensions in the Middle East, ongoing conflicts in various regions from Yemen to the Congo, and shifts in the global balance of power remain critical issues. The strengthening of protectionist tendencies with the second Trump era in the United States is likely to further intensify inherited concerns from 2024, particularly in terms of global trade balances and increasing polarization in international relations. In Türkiye, while a significant decline in inflation has been observed as a result of the economic policy implemented since the second half of 2023, growth has been somewhat constrained. Entering 2025 with the positive effects of a tight monetary stance, the direction of the economy will be shaped by the impacts of the anticipated interest rate cut process. A stable and balanced environment is observed in the reinsurance market. In 2024, the total economic loss caused by catastrophic events worldwide amounted to USD 368 billion, while insured losses reached USD 145 billion, marking the fifth consecutive year in which this figure exceeded USD 100 billion. Although the global insurance penetration rate rose from 31% to 40%, it remains at a relatively low level, especially considering the increasing frequency of natural disasters. Following significant price increases and structural changes in recent years, also driven by geopolitical uncertainties and severe natural catastrophes, the January 2025 renewals brought about noticeable shifts in market dynamics. The stringent market conditions that had prevailed for several years have given way to a more stable and balanced environment. Despite fluctuations in loss activity, the evolving risk perceptions of cedants and the continued inflationary pressures on insured values contributed to sustained strong demand for reinsurance. While improvements in the prices and terms were observed across the majority of programs in favor of buyers, numerous cedants took advantage of the favorable market conditions to optimize their reinsurance structures, purchase additional coverage, and achieve greater consistency in pricing and terms across the reinsurer panels. 14 MİLLİ RE