Milli Re 2025 Annual Report

Anadolu Sigorta: According to the circular numbered 2019/5 issued by the Insurance and Private Pension Regulation and Supervision Agency, in addition to the method mentioned above, the provision for unexpired risks can also be calculated for all branches using the following method: If the discounted ultimate loss ratio calculated based on the accident year, including indirect operations, is over 85%, the portion exceeding that threshold is multiplied by the gross UPR to determine the gross provision for unexpired risks. Similarly, multiplying the net UPR by this portion yields the net provision for unexpired risks. In the amendment made by the circular numbered 2020/1 issued by the Insurance and Private Pension Regulation and Supervision Agency, if separate calculations are made for operations where 100% of direct production is transferred to pools established in Turkey, the gross loss ratio must exceed 100%. For other operations, the gross loss ratio must exceed 85% for the calculation of the unexpired risk reserves (URR) to be performed. Finally, as per the circular numbered 2022/27 published on November 24, 2022, a new method “best estimate based on the accounting year” has also been added to the methods used for calculating the unexpired risk reserves (URR). “According to the 2nd paragraph of Article 3 of the Communiqué, insurance companies can calculate the gross loss ratio, including indirect operations, based on the total for the current period and the last four quarterly periods according to the underwriting (business) year. In calculating the incurred loss amount by the company’s actuary, it is also taken into account under the best estimate principles that the development process of claims related to policies written in the last year has not yet matured for the underwriting (business) year. According to the 6th paragraph of Article 3 of the Communiqué, the amounts related to direct operations for which 100% of direct production is transferred to pools established in Turkey are not included in the calculation of the loss ratio. Since the companies’ obligations regarding these productions arise solely from indirect operations, calculations for these operations and similar types of business are made separately from the rest of the branch’s production by considering only indirect productions and claims, as well as other income and expense items in this distinction, in order to accurately determine the company’s actual liabilities.” Anadolu Sigorta, in accordance with the second paragraph of the third article of the Circular on the Provision for Unexpired Risks 2022/27, the company actuary in the Compulsory Traffic branch; In order to eliminate the misleading effect of the fluctuation caused by the deterioration in the damage development due to inflation, minimum wage, exchange rate and other factors and the periodic variation of the tariff changes that increase the premium, the Final Loss Ratio estimates for the last four quarters subject to the calculation of the URR are replaced with “Accident Year”. Underwriting Year” was calculated on the basis of actuarial analyses based on the best estimation principles. Anadolu Sigorta has performed calculations based on the “Accident Year” best estimate principles for the General Liability, Voluntary Motor Liability, and Health branches. For other branches, it has considered the method specified in the Technical Reserves Regulation, which involves comparing the expected loss ratio with 95%. The Circular (2025/32) amending the Circular No. 2016/22 on “Discounting of Net Cash Flows Arising from Outstanding Claims Reserve,” published on December 18, 2025, has modified Article 7 of Circular No. 2016/22 to state, “Net cash flows are discounted to present value based on a rate of 29% as of the financial reporting period date.” In line with this circular, a rate of 29% has been used for discounting the net cash flows arising from the outstanding claims reserve (December 31, 2024: 35%). Due to the increasing effect of this change on the current period net outstanding claims reserve used in calculating the provision for unexpired risks, the change in the discount rate has resulted in an increasing effect of 529,453,505 TL on Anadolu Sigorta’s net provision for unexpired risks as of December 31, 2025. 256 MİLLÎ REASÜRANS 2025 Annual Report Notes to the Consolidated Financial Statements As of December 31, 2025 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TRY)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)