Milli Re 2025 Annual Report

varied depending on geographical scope and country-specific dynamics, programme performance and loss experience continued to be the main drivers of differentiation. This favourable capacity backdrop was further supported by the stabilization of losses from Storm Borris, which affected several countries across the continent in 2024. The relatively benign natural catastrophe experience in 2025 has been another important factor that contributed to a smoother placement process for Cat XL treaties. The additional capacity demand driven by the upward trend in sums insured, on the back of ongoing inflationary pressures, was comfortably absorbed by reinsurers without any adjustment to programme retentions. On the other hand, reinsurer appetite showed great differentiation; as some reinsurers adhered to strict underwriting policies, while others adopted a more flexible approach, leading to varying outcomes across certain programmes and layers. As cost optimization remained a key priority for buyers, firm orders were issued with delays for many programmes, making it more challenging for reinsurers to shape their strategies for capacity allocation. While loss-free catastrophe programs renewed with rate reductions in the range of 5% to 20%, downward price movements on loss-affected catastrophe programmes reached up to 10%. As far as the property risk programmes are concerned, loss-free programmes saw rate decreases reaching up to 10% whereas price adjustments for loss-affected risk programs remained flat to up by 5%. North America As the 2025 Atlantic hurricane season was relatively calm compared to previous years, and the decline in secondary peril losses coincided with strong profitability and investment returns, this supported a notable increase in total reinsurance capacity. As a result, the softening trend that had prevailed across the market throughout the year became more evident during the January 2026 renewals. Despite the competitive pressure driven by excess capacity, reinsurers maintained underwriting discipline, particularly for programmes where the proposed terms and conditions did not align with their risk appetite. On the other hand, taking advantage of price softening and buyer-friendly market conditions, many cedants purchased additional limits to strengthen their reinsurance structures. Moreover, as lead reinsurers preferred to offer more holistic solutions, aggregate excess of loss programs, for which capacity supply had remained severely limited in previous years, has gained increased popularity. Although buyers prioritized securing maximum price reductions in line with their cost optimization objectives, negotiations aimed at aligning pricing and treaty conditions across reinsurer panels also gained traction. For loss-affected catastrophe programmes, risk-adjusted rate increases ranged between 15% and 20%, while loss-free programmes were renewed on a flat basis or with price reductions of up to 5%. Loss- affected risk programmes saw rate increases reaching up to 5%, whereas loss-free risk programmes experienced price reductions in the range of 5% to 10%. 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 71