MILLIRE ENG2024

The January 2025 retrocession renewals were shaped by the absence of capacity constraints and the influence of increasing competition. In addition to existing reinsurers increasing the total capacity allocated to retrocession markets, the inflow of new capital into alternative capital markets also contributed positively, leading to a surplus of supply. This surplus exerted downward pressure to some extent on pricing during the renewals. In addition to the significant price increases that had dominated the markets in previous years, upward revisions in cedants’ retention levels also contributed positively to reinsurers’ technical results, which continued to improve in 2024. In addition to the absence of a major natural disaster in our country in 2024 and the impact of decisive measures taken by Milli Re to improve, particularly the treaty outcomes in proportional reinsurance treaties, enabled insurance companies operating in Türkiye to complete the placements of such treaties without difficulty. The changes made in proportional reinsurance treaties during the previous year were maintained for the 2025 renewals, and no additional market-wide measures were deemed necessary. However, on a company-specific basis, portfolios were reviewed, and certain changes were observed in the conditions that are key to the profitability of reinsurance treaties. On the other hand, some insurance companies decided in 2025, similar to their approach in 2024, to convert their reinsurance structures entirely or partially from proportional to non-proportional treaties, considering capacity and placement constraints. While no significant changes were observed in the terms of non-proportional reinsurance treaties, programs that became attractive to both domestic and international reinsurers in terms of portfolio composition and pricing balance were oversubscribed and renewed above 100% placement. Our sector manages change effectively. According to data from the Insurance Association of Türkiye, total premium production reached TL 838.5 billion in 2024, corresponding to a nominal growth of 72.5% and a real growth of 19.5%. 88% of total premium production, amounting to TL 738.5 billion, was generated by Non-Life branches. The Life branch accounted for TL 99.9 billion in premium production, representing a 12% share. The largest share of premium production came from the Land Vehicles Liability branch (29.7%), followed by Health (18.5%), Fire and Natural Disasters (16.6%), and Land Vehicles/Own Damage (15.2%). The actions taken following the Kahramanmaraş Earthquake and the regulatory adjustments made in the sector, alongside the professional approach demonstrated by insurance companies in transparency and claims management, have contributed to reinforcing the reputable image of the Turkish insurance market in international markets while also positively impacting the supply of catastrophe coverage related to Türkiye’s earthquake risk. Besides, the improvement observed in insurance awareness and penetration in our country, along with actions taken by public authorities to support the development of the insurance industry, such as the establishment of the Disaster Reconstruction Fund, the transition from compulsory earthquake insurance to compulsory disaster insurance, and initiatives within the scope of urban transformation, contribute to the advancement of our industry. The insurance industry is actively continuing its transformation efforts to align with TFRS 17, the local adaptation of the international standard for accounting for insurance contracts, which aims to ensure more detailed and transparent reporting of insurance companies’ contractual obligations. The sector’s compliance with TFRS 17 is expected to reshape not only reporting standards but also business processes, risk management practices, data management, and the overall use of technology. In addition to the absence of a major natural disaster in our country in 2024 and the impact of decisive measures taken by Milli Re to improve, particularly the treaty outcomes in proportional reinsurance treaties, enabled insurance companies operating in Türkiye to complete the placements of such treaties without difficulty. GENERAL INFORMATION FINANCIAL RIGHTS PROVIDEDTOTHE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RISKS AND ASSESSMENT OF THE GOVERNING BODY ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES RESEARCH & DEVELOPMENT ACTIVITIES FINANCIAL STATUS FINANCIAL INFORMATION 15 2024 Annual Report