Milli Re 2025 Annual Report

paralleled the soaring foreign trade deficit and boomed by 142% to USD 25.2 billion. In 2025, the current surplus excluding gold and energy went down by 19.5% as compared to the previous year. While 2026 predictions do not suggest additional pressure on energy prices, domestic demand, gold prices and gold demand will possibly continue to act as the primary risk factors with respect to current accounts balance. Following several years of highly frequent natural disasters, global catastrophe losses amounted to USD 296 billion in 2025. Global incurred cat losses fell by 11% annually to USD 129 billion, going down in the records as the lowest loss sustained by the industry since 2019. Although the ratio of insured losses was higher as compared to the previous year, the protection gap is significant. While 27 natural disasters in 2025 caused insured losses over USD 1 billion, it is noteworthy that all but two were caused by weather events such as severe convective storms, floods, and wildfires. This trend further underlines the threats stemming from climate change, which is driving a marked rise in the frequency and severity of extreme weather. In 2025, reinsurers kept performing strongly in terms of their technical results owing to their consistency in maintaining market discipline; conventional capital rose to USD 636 billion in the first three quarters of the reporting period, an outcome contributed also by retained earnings. Another important element that strengthened reinsurers’ equities was the valuation gains in investment portfolios resulting from declined interest rates across the world. On another front, as the alternative capital market kept expanding as a complementary element supporting the conventional reinsurance capacity, it has reached a new historic peak with a total volume of USD 124 billion as of the end of the third quarter of 2025. As of September 2025, the sum of conventional and alternative reinsurance capital rose from USD 715 billion at year-end 2024 to USD 760 billion. The Turkish insurance industry sustained its nominal growth in 2025, whereas real growth remained limited. Non-Life insurance continued to be the main driver of total premium production. While the expansion in Non-Life branches was largely the result of increased sums insured, coverage and limit updates, and price adjustments, some branches had limited or even negative growth in real terms. According to year-end 2025 data released by the Insurance Association of Türkiye, the premium production of the Turkish insurance industry reached TL 1,223 billion, marking a nominal increase of 45.8% and a real increase of 11.4% compared to 2024. Non-Life branches accounted for 85.4% of the sector’s total premium in 2025, generating TL 1,044 billion in premiums translating into a nominal growth rate of 41.3% compared to 2024. The Life branch recorded a nominal growth of 79.1%, increasing its share of total premium production to 14.6 %. Premium production in the Land Vehicles Liability branch, the sector’s primary premium generator, continued to lose momentum and grew by 41.2%. Growth in the Land Vehicles branch stood at 31.1%. These two branches got 29.7% and 14.1% share out of Non- Life premium production, respectively. The Health branch, on the other hand, has been one of the branches to achieve marked real growth in the sector in 2025. Registering 55.1% 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 89