MILLI REASURANS ANNUAL REPORT 2018

Milli Re Annual Report 2018 Financial Status / 51 of policies were in foreign currency; hence premiums were elevated by the respective weakening of TL. Consequently Marine grew above sector average, with approximately 30% increase. General Liability Insurance is among the fastest developing line in the industry with 36% increase in premium income compared to 2017. Having increased its share in Non-Life premium to 2.9% in 2018 it is considered to have a very high growth potential. Although comprised of 13 sub-branches, 90% of the total premium in General Liability emanate from General Third Party Liability, Employers’ Liability and Professional Indemnity. Owing to the positive developments in products with important growth prospect such as Health and Complementary Health Insurance, Health and Sickness premiums grew by more than 24%. Albeit the current small market share, it is anticipated that the positive trend in financial insurances such as Surety and Credit, which grew by more than 40% over 2018, will continue with the economic conjuncture and state support. Another important development in this respect was the establishment of the State Supported Credit Insurance Pool. With working principles and related tariff published in the Official Gazette on 24 December 2018, the Pool aims to protect SMEs (Small and Medium Enterprises) against default in their trade receivables. Following the official implementation of the pool as of 1 January 2019, the function of the insurance industry in supporting the economy has gained a new dimension. With the implementation of the “Regulation” in respect of participation insurance which is a form of cooperative insurance, with effect from 20.12.2017 operations in takaful processes and principles were made possible with respective legal infrastructure. Premiums generated in this context correspond to 4% of total market premium income at the end of 2018. Capital structure in the Turkish insurance market underwent a number of changes in 2018 as the industry experienced four acquisitions which aimed to tap the potential synergy brought out by consolidation. In addition, Türk Reasürans Anonim Şirketi, was established under the auspices of the Ministry of Treasury and Finance with the aim to increase domestic reinsurance capacity and to provide indemnity for material and bodily damages that may be incurred for risk groups which currently cannot find or have difficulties in accessing insurance or reinsurance coverage. The entity is expected to start operations in 2019. Market Premium (TL) Line of Business 2018 Share (%) 2017 Share (%) Change (%) Accident 1,812,335,726 3.80 1,682,318,452 4.24 7.73 Health 6,244,361,483 13.08 5,026,464,106 12.66 24.23 Land Vehicles 7,842,907,976 16.43 6,916,180,532 17.42 13.40 Railway Vehicles - - 11,068 - (100.00) Air Vehicles 179,857,508 0.38 114,153,481 0.29 57.56 Sea Vehicles 300,257,212 0.63 218,148,439 0.55 37.64 Marine 829,833,718 1.74 651,957,892 1.64 27.28 Fire & Natural Disasters 6,972,575,466 14.61 5,745,990,852 14.47 21.35 General Damages 5,247,013,900 10.99 4,355,445,077 10.97 20.47 Land Vehicles Liability 15,853,655,606 33.21 13,042,053,210 32.84 21.56 Air Vehicles Liability 194,377,729 0.41 131,775,217 0.33 47.51 Sea Vehicles Liability 31,336,619 0.07 26,402,168 0.07 18.69 General Liability 1,390,294,069 2.91 1,023,855,057 2.58 35.79 Credit 248,338,460 0.52 173,718,087 0.44 42.95 Fidelity Guarantee 71,788,694 0.15 50,021,130 0.13 43.52 Financial Losses 345,630,885 0.72 325,760,102 0.82 6.10 Legal Protection 168,125,712 0.35 225,033,131 0.57 (25.29) Support 122,350 - 1,318,624 - (90.72) Total Non-Life 47,732,813,112 87.34 39,710,606,624 85.30 20.20 Life 6,920,767,257 12.66 6,844,082,921 14.70 1.12 Total 54,653,580,369 100.00 46,554,689,545 100.00 17.40 Source: Insurance Association of Turkey