Milli Re 2025 Annual Report

In 2025, worldwide natural disaster-- related losses amounted to USD 296 billion, remaining below the figure in 2024, with insured losses going down in the records around USD 129 billion. Trending below the average for the last ten years, natural disaster- related losses followed a similar pattern also in our country and did not achieve a magnitude that would wear out the insurance industry and the economy, save for the agricultural insurance branch. The Turkish insurance and reinsurance market recorded significant rises in premium production in 2025, owing also to the earthquake tariff. However, in view of the base effect and intensified competitive conditions, this trend will possibly slowdown in 2026. In this framework, premium increases will presumably be more moderate as compared to 2025. The prices adopted a downtrend in the Turkish insurance and reinsurance market, following the toughened market conditions in 2023 and 2024 that led to increased competition. Notwithstanding, the ongoing effect of catastrophic risks and climate-driven losses put pressure on pricing. Increased investment income supported technical profitability in recent years due to the high interest and inflationist environment. However, investment income will likely decline in line with the anticipated gradual reduction in interest rates and falling inflation as of 2026. The tendencies that arose in the global reinsurance market, which has embarked upon a softening process from 2025 as the effects of the pandemic, war and major disasters eased, manifested their impact on the Turkish reinsurance market as well. While prices and conditions tend to soften in the Turkish market in parallel with the global trends, natural disaster risk, increased loss costs, inflation, economic uncertainties and capital management requirements compel the preservation of price discipline. It is believed that 2026 will be characterized by a balance between disciplined pricing, innovation, and alternative risk transfer solutions. In 2026 renewals, capacity demand increased, with reinsurer appetite standing further above this increase. While the expected Marmara Earthquake in particular, climate risks and model uncertainties persist, excess of loss reinsurance treaty prices were seen to be rebalanced through above-projected declines. Natural disaster risk, climate change, loss frequency and inflationist pressures will likely remain the key agenda items for the sector in 2026. Intensified cyber risks in the global markets, data-driven business acceptance applications, and Insurtech investments embody significant opportunities also for the Turkish market. These developments will contribute to the industry from the standpoint of new product design and operational efficiency increase. Turkish Reinsurance Market and Milli Re in 2025 The prices adopted a downtrend in the Turkish insurance and reinsurance market, following the toughened market conditions in 2023 and 2024 that led to increased competition. GENERAL INFORMATION FINANCIAL RIGHTS PROVIDED TO THE 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 63