Milli Re 2025 Annual Report

of God) protections where flood claims had been reported, while cedants adopted a more selective underwriting approach toward flood-exposed risks. Central and Eastern Europe (CEE) Inflation remained a key challenge throughout 2025: Elevated material, labor, and service costs continued to exert upward pressure on claims severity and operating expenses, pressuring underwriting margins across non-life portfolios. These pressures were compounded by the increased frequency and severity of weather-related events, particularly floods and droughts, which disproportionately affected agricultural and property lines. Geopolitical developments continued to shape the regional outlook. The ongoing war in Ukraine has had a sustained impact on neighboring CEE economies, including Poland, Romania, Slovakia, and Hungary, through energy market disruptions and defense-related spending. While most CEE economies showed signs of stabilization in 2025, geopolitical risk remains elevated, influencing risk appetite, pricing assumptions, and demand for coverage related to political violence, property, life, and health insurance. Gross written premiums in the first half of 2025 reached approximately EUR 26.3 billion, reflecting year-on- year growth of around 7.5 percent, while paid claims declined modestly. Slovenia represented an exception following the introduction of a mandatory public health insurance contribution in January 2024, which structurally reduced private health insurance volumes. Insurance penetration in CEE remains below Western European levels, but long-term growth prospects remain supported by rising income levels and expanding demand for insurance products. Motor and life insurance continue to dominate premium volumes, while health insurance, particularly supplementary private coverage, has gained traction in markets such as Poland, Hungary, and Czechia. Regulatory developments remain closely aligned with broader European frameworks, including Solvency II, data protection requirements, and sustainability-related disclosures. InsurTech has accelerated across the region, with insurers investing in automation, online distribution, and data-driven underwriting solutions to enhance efficiency and customer experience. Weather-related volatility intensified across CEE in 2024, characterized by so-called “weather whiplash,” where rapid transitions between drought and flooding increased loss volatility. In 2025, advanced forecasting, improved flood defenses, and emergency preparedness helped mitigate losses compared to prior major flood events that took place in 2024, but flood risk remained the dominant underwriting concern. Capacity availability remained adequate, with incremental support from existing reinsurers rather than significant new market entrants. Loss-free programs generally renewed on stable terms, with variations reflecting portfolio-specific exposure and experience. A relatively quiet 2025 from the standpoint of natural disasters has been another important factor that reflected positively on the placements of Cat XL treaties. 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 75