Milli Re 2025 Annual Report

The Company was unable to differentiate between fire and earthquake premiums in its overseas reinsurance agreements in previous periods due to the local regulations of some foreign countries, the terms of the reinsurance agreements, and the general practice of foreign companies reporting based on total premiums, and therefore accounted for all premiums from these transactions under the fire branch. In a letter dated August 2, 2011, with number B.02.1.HZN.0.10.03.01/38732, addressed to the Company by the Republic of Turkey Ministry of Treasury and Finance, it was permitted to apply the average rate calculated based on the premiums of companies where such differentiation is possible for the premiums of proportional overseas agreements where fire and earthquake premium differentiation cannot be made. Furthermore, in another letter dated August 12, 2011, addressed to the Company, it was deemed appropriate to apply the relevant accounting policy change prospectively as of June 30, 2011, effective from January 1, 2011, due to the impossibility of retrospectively differentiating premiums. Accordingly, in its financial statements prepared as of December 31, 2025, the Company performed the differentiation of fire and earthquake premiums of proportional overseas agreements based on the weighted average earthquake premium rate calculated from overseas proportional agreements between January 1, 2025, and December 31, 2025. For non-proportional overseas reinsurance agreements, the earthquake premium rate obtained from proportional overseas reinsurance agreements was used in compliance with the “Regulation Amending the Regulation on the Technical Provisions of Insurance, Reinsurance, and Pension Companies, and the Assets in which these Provisions will be Invested,” published in the Official Gazette on July 28, 2010, with the issue number 27655. The differentiation of commissions received from these reinsurance agreements and the claim payments arising from these agreements between the fire and earthquake branches was made in parallel with the premium differentiation. Equalization reserves are presented under “other technical reserves” within long term liabilities in the accompanying consolidated financial statements. As at the reporting date, the Group has recognized equalization provision amounting to TRY 2.888.392.961 (December 31, 2024: TRY 1.536.763.784). As of December 31, 2025, Milli Reasürans has deducted TRY 948.299.682 (December 31, 2024: TRY 474.736.051) from equalization reserve in consequence of realized earthquake losses. As of December 31, 2025, the Company has deducted TRY 65.828.035 (December 31, 2024: TRY 78.214.658) from equalization provision in 2024 in consequence of realized earthquake losses. At Anadolu Sigorta, at the end of 2025 in financial statements, there is TRY 1.940.093.281 (December 31, 2024: TRY 1.062.027.735) equalization reserve is allocated. 2.29 Related parties Parties are considered related to the Group if: (a) Directly, or indirectly through one or more intermediaries, the party: – Controls, is controlled by, or is under common control with the Group (this includes parent, subsidiaries and fellow subsidiaries); – Has an interest in the Group that gives it significant influence over the Group; or – Has joint control over the Group; 258 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)