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, Milli Reasürans has calculated ACLM reserve for General Losses main branch as two separate subbranches namely agriculture and non-agriculture branches. Due to the differing characteristics of the Agriculture sub-branch and the Engineering sub-branches within the General Liability main branch in terms of the process of claims transforming into paid losses, it was argued that the IBNR calculated in this main branch could lead to unhealthy and non-representative results. Consequently, a request for permission was submitted to the Treasury Undersecretariat of the Republic of Turkey on January 17, 2013, via a letter numbered 300, to allow the calculation of the IBNR in the General Liability main branch to be conducted as two separate sub-branches: Agriculture and Non-Agriculture. The Treasury Undersecretariat responded with a letter numbered 24179134 on January 28, 2013, granting permission for the IBNR calculations in the General Liability main branch to be conducted on a sub-branch basis, distinguishing between Agriculture and Non-Agriculture. In accordance with the “Circular on Amendments to the General Communiqué on the Provision for Incurred But Not Reported Claims numbered 2014/16,” published on December 7, 2020, and effective on the publication date, the IBNR amount for the “Mandatory Liability Insurance for Medical Malpractice” sub-branch under the General Liability main branch must be calculated separately. In this context, a separate calculation has been made for the Mandatory Liability Insurance for Medical Malpractice sub- branch, while calculations for other sub-branches classified under General Liability have been completed excluding the Mandatory Liability Insurance for Medical Malpractice. The amounts determined as of December 31, 2024, have been recorded in the books. 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 Milli Reasürans has chosen to apply discounting only for mandatory branches, and no discounting is conducted for other branches. With the Circular No. 2024/3 “Circular on Amendments to Circular No. 2016/22 on Discounting Net CashFlows 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 communiqué, the discount rate for net cash flows arising from the provision for incurred but not reported claims has been applied at a rate of 35% as of December 31, 2024 (December 31, 2023: 28%). Accordingly, Milli Reasürans has calculated the net discounted amount for the provision for incurred claims as 1,960,424,461 TL as of December 31, 2024 (December 31, 2023: 923,111,219 TL). The change in the discount rate has had a reducing effect of 221,786,939 TL on the net provision for incurred claims recorded as of December 31, 2024. As of December 31, 2024 and 2023, Milli Reasürans’ net outstanding claims reserves by branch are given below, before and after discount: 31 December 2024 Branches Net outstanding claims before discount Discount amount Discounted net outstanding claims provision Land Vehicles Liability 635.982.639 (371.816.439) 264.166.200 General Liability 2.167.620.695 (1.588.608.022) 579.012.673 Total 2.803.603.334 (1.960.424.461) 843.178.873 31 December 2023 Branches Net outstanding claims before discount Discount amount Discounted net outstanding claims provision Land Vehicles Liability 368.376.477 (186.857.862) 181.518.615 General Liability 1.127.031.106 (736.253.357) 390.777.749 Total 1.495.407.583 (923.111.219) 572.296.364 214 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) Notes to the Consolidated Financial Statements As of December 31, 2024 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish) MİLLİ RE