MILLI REASURANS ANNUAL REPORT 2018

Milli Re Annual Report 2018 62 / Financial Status On the other hand, as part of international expansion strategy, Milli Re began writing business from select Continental European and Lloyd’s market players starting from 2007, by participating in conventional reinsurance contracts of leading global reinsurers as well as providing capacity to a few syndicates. Corresponding to roughly 38% of total international premium generated in 2018, Developed Markets Portfolio consists of a limited number of well-balanced retrocession accounts, contributing to the diversification of the overall book. Referring to the relevant portfolio, a large-scale Lloyd’s account was cancelled in 2019 January renewals as part of profit oriented risk management framework as well as conservative underwriting approach, given the poor performance of the treaty. On the other hand, rest of the portfolio which contributed to profitable results was renewed. Premium income for the international reinsurance portfolio reached TL 409.1 million, showing an increase of 52.9% in comparison with previous year as a consequence of positive contribution of foreign exchange fluctuations as well as the acquisition of a new business providing the opportunity to participate into various Lloyd’s accounts. Despite the fact that, premium and evaluation income regarding the Developed Markets portfolio increased in comparison with the previous year, the profitability of the portfolio was narrowed down in 2018 by the negative impact of the 2017 Nat Cat losses. Although there was no significant change in the development of paid claims and outstanding claims compared to the previous year, the fluctuations in rates of exchange in 2018 led to an increase in outstanding claims and had a negative impact on technical results in the developing markets. Consequently, international portfolio resulted with a technical loss of TL 24.9 million in 2018. GLOBAL REINSURANCE MARKET AND MİLLİ RE IN 2018 International Premium by Lines of Business Share (%) Fire Marine 63 Engineering 8 Marine 7 Land Vehicles 6 Agriculture 5 Land Vehicles Liability 4 General Liability 3 Personal Accident 2 Other * 2 Total 100 International Portfolio 2018 2017 2016 2015 2014 Premium (TL) 409,133,471 267,568,952 231,239,381 256,955,461 236,768,156 Share in Total Premium (%) 31.0 24.6 24.9 25.8 24.7 * Credit, Legal Protection, Air Vehicles, Plate Glass, Air Vehicles Liability, Fidelity Guarantee