MILLIRE ENG2024

Key audit matter How our audit addressed the matter Estimation of provision for claims incurred but not reported As explained in Note 2 to the accompanying unconsolidated financial statements, the Company has accounted for a net provision for claims incurred but not reported amounting to TRY 2.955.874.569 as of 31 December 2024. The abovementioned provision is calculated by the Company’s actuary using actuarial chain ladder methods, in accordance with “Circular on Outstanding Claim Provisions” dated 5 December 2014 and numbered 2014/16 published by the Ministry of Treasury and Finance and the approval letter obtained from the regulatory authority. Accordingly, the selection and aggregation of the claims data used in the calculation, adjustment procedures, selection of the most appropriate method and development factors, as well as interventions in the development factors, are carried out by the Company’s actuary using actuarial methods on a branch basis. The amount calculated is compared to the incurred and reported provision for outstanding claims, and the difference is determined as the provision for claims incurred but not reported. The reason we focus on this area during our audit is the significance of the incurred but not reported claims provision for the unconsolidated financial statements and the significant actuarial judgments and estimates required by the nature of provision in the financial statements. We tested the design and operational effectiveness of the key controls implemented by the Company management in relation to the claims data used in the calculation of provision for claims incurred but not reported. In the branches selected by the sampling method, the data used in the calculation of provision for claims incurred but not reported was reconciled to the information in the accompanying unconsolidated financial statements. In addition, the estimated expected loss ratios and claim development trends, as well as the selected actuarial methods and assumptions considered by the Company’s actuary in the calculation of the provision for incurred but not reported, have been assessed by the actuaries within our team using actuarial techniques, based on historical claim experiences and sector developments. Besides, for selected branches, independent actuarial analyses have been conducted and reasonable range estimates have been determined for the acceptable reserve ranges related to the provision for incurred but not reported claims calculated by the Company’s actuary as of the balance sheet date, considering the related legislation and the approval letter obtained from the regulatory authority, and these ranges have been compared with the amounts included in Company’s accounting records. In addition to these, the compliance and consistency of the disclosures in the notes to the unconsolidated financial statements related to such provisions have been checked in accordance with the Regulation on Insurance Accounting and Financial Reporting Principles. 4. Other Matter The audit of the unconsolidated financial statements of the Company for the year ended 31 December 2023 was conducted by another independent audit firm and an unqualified opinion was issued in audit report dated 27 February 2024 prepared by the mentioned independent audit firm.  5. Responsibilities of Management and Those Charged with Governance for the Unconsolidated Financial Statements The Company management is responsible for the preparation and fair presentation of the unconsolidated financial statements in accordance with the Regulation on Insurance Accounting and Financial Reporting Principles and for such internal control as management determines is necessary to enable the preparation of unconsolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the unconsolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. 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 93 2024 Annual Report