MILLI_RE_ANNUAL REPORT 2022

Unearned premiums reserve is calculated for all insurance contracts except for the contracts for which the mathematical reserve is provided. Unearned premiums reserve is also calculated for the annual premiums of the annually renewed long term insurance contracts. In accordance with the “Communiqué on Technical Reserves for Insurance, Reinsurance and Pension Companies and the Related Assets That Should Be Invested Against Those Technical Reserves” (“Communiqué on Technical Reserves”) which was issued in 26606 numbered and August 7, 2007 dated Official Gazette and put into effect starting from 1 January 2008, the reserve for unearned premiums represents the proportions of the gross written premiums without deductions of commission or any other allowance, in a period that relate to the period of risk subsequent to the reporting date for all short-term insurance policies. For commodity transportation policies with indefinite expiration dates, 50% of the remaining portion of the premiums accrued in the last three months, less any commissions are also provided as unearned premium reserves. Since the Communiqué on Technical Reserves was effective from January 1, 2008, the Republic of Turkey Ministry of Treasury and Finance issued July 4, 2007 dated and 2007/3 numbered “Circular to Assure the Compliance of the Technical Reserves of Insurance, Reinsurance and Pension Companies With the Insurance Law No.5684” (“Compliance Circular”) to regulate the technical provisions between the issuance date and enactment date of the Communiqué on Technical Reserves. In accordance with the Compliance Circular, it is stated that companies should consider earthquake premiums written after June 14, 2007 in the calculation of the reserve for unearned premiums while earthquake premiums were deducted in the calculation of the reserve for unearned premiums before. Accordingly, the Company has started to calculate reserve for unearned premiums for the earthquake premiums written after June 14, 2007, while the Company had not calculated reserve for unearned premiums for the earthquake premiums written before June 14, 2007. According to the 2009/9 Numbered Circular Related to Application of Technical Reserves issued on March 27, 2009 which published by Republic of Turkey Ministry of Treasury and Finance reserve for unearned premiums is calculated by taking into account that all polices become active at 12:00 at noon and end at 12:00 at noon. According to the Communiqué on Technical Reserves, for the calculation of unearned premium reserves of foreign currency indexed insurance agreements, foreign currency selling exchange rates announced by Turkish Central Bank will be used, unless there is a specified exchange rate in the agreement. According to the “Communiqué on Amendments to Communiqué on Technical Reserves for Insurance, Reinsurance and Pension Companies and the Related Assets That Should Be Invested Against Those Technical Reserves” published in Official Gazette no 27655 dated July 28, 2010; there is no change in the calculation of reserve for unearned premiums for reinsurance companies. As of the reporting date, the Group has provided unearned premiums reserve amounting to TL 15.226.687.322 (December 31, 2021: TL 6.754.872.769) and reinsurer share in unearned premiums reserve amounting TL 2.523.561.505 (December 31, 2021: TL 1.563.331.963) Furthermore, unearned premiums reserve includes Social Security Institution (“SSI”) share amounting to TL 265.022.490 (December 31, 2021: TL 119.827.872). Outstanding indemnity provision is set aside for indemnity amounts accrued and determined on account but not actually paid in previous accounting periods or in the current accounting period, or if this amount could not be calculated, estimated costs and incurred but not reported compensation amounts. Compensations that occurred before the accounting periods but were notified after these dates are accepted as incurred but not reported compensation amounts. The “Circular on Outstanding Compensation Provisions (2014/16)” published by the Ministry of Treasury and Finance on 5 December 2014 and the “Circular on Actuarial Chain Ladder Method” numbered 2010/12 have been repealed, with the exception of articles 9 and 10. According to the circular in which the ACLM calculation method is explained, insurance and reinsurance companies calculate ACLM with six different methods: “Standard Chain, Claims/Premiums, Cape Cod, Frequency/Intensity, Munich Chain and Bornhuetter-Ferguson”. operations, selection of the most appropriate method and development factors, and intervention to development factors are carried out by the company actuarial using actuarial methods. These issues are detailed in the actuarial report sent to the Ministry of Finance in Article 11 of the Actuarial Regulation. Anadolu Sigorta’s actuary tests the loss development factors for certain methods with its provision software, and then makes appropriate factor selections with actuarial analysis. Bodily and material damages in the Compulsory Traffic branch, Employer Financial Liability, Compulsory Financial Liability for Medical Malpractice, Professional Liability, Hazardous Substances and Hazardous Waste Compulsory Financial Liability and Other Liability branches are analyzed separately by the company actuary in the General Liability branch. The company actuary uses the latest legal interest rate (9%) published in the Official Gazette within the framework of the Circular No. 2016/22, which regulates the procedures and principles regarding the discounting of net cash flows arising from outstanding claims. 210 MİLLİ RE 2022 ANNUAL REPORT Notes to the Consolidated Financial Statements As of December 31, 2022 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1 GENERAL INFORMATION FINANCIAL RIGHTS PROVIDED TO THE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RESEARCH & DEVELOPMENT ACTIVITIES ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES