Milli Re 2025 Annual Report

from proportional to non-proportional treaties in 2026 renewals; a limited number of companies that covered their portfolios with excess of loss treaties started protecting their portfolios with proportional treaties in 2026. Despite variances between companies, proportional treaties were renewed with over-placements between 20% to 30% after many years. We believe that reputable new reinsurers’ interest in proportional treaties and their participation in these placements are the most important results of our sector’s effective post-February 6 earthquake measures and successful proactive claims management. Milli Re participated in the placement of 17 companies that obtained proportional reinsurance protection following the 2026 renewals, serving as lead reinsurer in the treaties of 12 companies. Increasing its market share from 18% in 2025 to 19.5% in 2026, our Company continued to give increasing support to the sector. Excess of loss reinsurance treaties paralleled the renewals in continental Europe and were renewed at risk- adjusted price reductions in 15% to 20% interval. Although they vary by company, in many cases oversubscription exceeded climbing to an average rate of 150%. Milli Re has an average share of 8% in the catastrophe excess of loss (Cat XL) treaties of 28 companies it participated in excluding Turkish Catastrophe Insurance Pool (TCIP). In 2026, Milli Re participated in the programs of 12 companies that structured their risk protections on an excess of loss basis. In 2026, the Cat XL treaty capacity purchased by the Turkish insurance industry to cover earthquake risk increased by EUR 1 billion compared to 2025, in parallel with the rise in earthquake accumulations and liabilities exceeding event limits in proportional treaties, reaching a total of EUR 12 billion including the Turkish Catastrophe Insurance Pool (TCIP). While almost all existing reinsurers requested to participate in Cat XL treaties with increased shares, new reinsurers also entered the market. Capacity surplus reduced the need for parametric products that were necessitated in the aftermath of the February 6 earthquakes, and some companies terminated their existing parametric treaties; the prices in renewed treaties declined beyond the decreases in conventional reinsurance treaties. In the local underwriting portfolio, the rise in the sums insured resulting from exchange rates and escalating inflation, the revised earthquake tariff, and the elevation in policy prices contributed positively to our premium production in 2024. On the other hand, in 2025, the premium growth in the portfolio has been moderate due to the competition that gradually intensified among local insurance companies. The expansion in premium income stemmed mostly from the Fire and Agriculture branches. Although negatively affected by the exchange rate movements coupled with the outcomes of the frost disaster in the first half of 2025, technical loss declined as compared to 2024, owing to the fact that the measures adopted in 2024 within the scope of proportional treaties were maintained in 2025, the price increases in non- proportional treaties, the absence of losses that would wear down the company portfolios and the market in 2024 and 2025 except the frost disaster, and the positive effect of the declined retrocession cost. With the contribution of the net transfers from the non-technical account, the Company booked TL 354 million in profit on the domestic business portfolio. 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 65