Milli Re 2025 Annual Report

General Manager’s Message While market prices and circumstances softened paralleling the global trends, catastrophe risk, increased loss costs, inflation, uncertainties and capital management requirements continue to compel pricing discipline. Reinsurance markets are achieving a more balanced structure with respect to supply and demand. In 2025, global reinsurance markets achievied a more balanced structure following the tightening in previous years. The limited number of global insured catastrophe losses and the positive trend in capital markets kept reinsurer appetite alive, paving the way for increased capacity and gradual loosening in pricing conditions. The higher accessibility of capacity and declining costs at the onset of 2026 renewal period brought about a market composition where buyers held a relatively more advantageous position. As the effect of inflation on insurance prices drove up the reinsurance demand even if to a limited extent, expanded supply caused considerable price reductions. Although risk- adjusted costs in catastrophe excess of loss (Cat XL) programs declined by 15% on average across the globe, prices are still about 50% higher than the lowest levels of 2018. While contract terms vary depending on coverage scope, geographical coverage, loss history and technical pricing elements, there have been delays as compared to the standard timeline in the renewal process. As negotiations revolved around pricing and program structures, cedants were seen to waive their requests for expanded coverage, whereas many buyers taking advantage of favorable terms purchased additional protection at advantageous costs, and standardized the terms. Demand increase persisted in the retrocession market in January 2026 renewals; reinsurers and insurance-linked securities (ILS) market reinvested their retained earnings in the market and a limited number of new players provided fund inflows, resulting in supply surplus, which intensified competition and put downward pressure on prices. Portfolio expansion, buyers’ target to reduce their net retention levels and revised capital models paralleling the updates to catastrophe models were the primary drivers of demand. While a cautious approach remains critical given the structural impacts of climate change and treaty terms shaped by past major losses, discipline in scope, conditions, and risk assessment criteria continues despite improved pricing. We are sustaining our consistent performance During 2025, Milli Re kept its focus on risk management, capital discipline, and technical profitability, and sustained its consistent performance. While the elimination of exchange rate volatility and increased predictability allowed more effective planning of claims management and retrocession costs, the attractive returns on TL assets and investment instruments coupled with stable financial revenues supported our financial strength. During 2025, Milli Re kept its focus on risk management, capital discipline, and technical profitability, and sustained its consistent performance. 18 MİLLİ RE 2025 Annual Report