MILLI_RE_ANNUAL REPORT 2022

According to the circular regarding the provision for unexpired risk reserve (2019/5), Reinsurance companies can make the calculation on the basis of the underwriting (business) year. In this case, the calculation is made by proportioning the total gross final loss incurred for at least the last three writing (business) years to the total gross earned premiums (written premiums minus unearned premiums reserve). Although it is essential to repeat the calculation in each quarter, if it can be clearly seen that the repetition of the calculation in quarterly periods will not produce meaningful results due to the structure of the agreements made or the agreement processes of the parties, it is possible to use the calculation made for the end of the year in the current year interim period estimates. With the Circular No. 2022/27 on the Provision for Unexpired Risk Reserve published by the Insurance and Private Pensions Regulation and Supervision Agency on 24.10.2022 and entered into force on the date of publication, the circular numbered 2019/5 was repealed. It is possible to calculate on the basis of underwriting year. While the company applied the year- based calculation defined by the Circular only in the Land Vehicles Liability branch; As of 30.09.2022, in order to eliminate the misleading effect caused by the significant fluctuations in the current year due to changes in economic indicators such as inflation and exchange rates, and the Fire, Natural Disasters and General Losses branches being heavily affected by the said fluctuations, the calculation in the said branches was made using the relevant method. As of 31.12.2022, the Company has applied the calculation based on the underwriting year to all branches other than Credit and Surety branches. In the Credit and Surety branches, on the other hand, due to the inadequacy of the Company’s data and the use of values representing the sector average due to their irregular distribution in the damage development tables, the calculation defined in the scope of the Regulation continued to be used, since the calculation based on the year of writing defined by the Circular could not be made in these branches. If the calculation had not been made with the method described in the Circular, a provision for unexpired risk reserve amounting to TL 1.099.900.456 would have been set aside in the financial statements as of 31 December 2022. In accordance with the circular numbered 2011/18 of the Ministry of Treasury and Finance; In the calculation of the expected loss premium rate used in the calculation of the ongoing risks related to the Compulsory Traffic, Compulsory Road Transport Financial Liability and Bus Compulsory Seat Personal Accident branches, the calculation was made by deducting all the amounts related to the premium and damage to be transferred to the SGK from the numerator and denominator. In accordance with the sector announcement numbered 2015/30 of the Turkey Ministry of Treasury and Finance, the opening outstanding claim provision amount used in the determination of the expected loss premium rate determined for the calculation of the reserve for ongoing risks as of 31 December 2017, has been re-determined in a manner consistent with the current period. With the circular numbered 2019/5 of the Turkey Ministry of Treasury and Finance, it has been stated that in addition to the method mentioned above, the calculation of the ongoing risks reserve for all branches can also be made with the following method. If the discounted final loss premium rate, which is calculated based on the accident year of Anadolu Sigorta, the subsidiary of the Company and including indirect works, is above 85%, the excess amount is multiplied by the gross UPR, and the gross ongoing risks reserve; The net amount of provision for continuing risks has been determined by multiplying it by the net UPR. Anadolu Sigorta, the subsidiary of the Company, In the amendment made with the circular numbered 2020/1 of the Ministry of Treasury and Finance, if a separate calculation is made for the works where 100% of the direct production is transferred to the pools established in Turkey, 100% of the gross claim/premium rate and 85% of the gross damage premium rate for other works. If it is higher than the ratio, the URR calculation is made. Anadolu Sigorta, in accordance with the second paragraph of the third article of the Circular on the Provision for Ongoing Risks 2022/27, the company actuary in the Compulsory Traffic branch; In order to eliminate the misleading effect of the fluctuation caused by the deterioration in the damage development due to inflation, minimum wage, exchange rate and other factors and the periodic variation of the tariff changes that increase the premium, the Final Claims Premium Rate estimates for the last four quarters subject to the calculation of the DERK are replaced with “Accident Year”. Writing Year” was calculated on the basis of actuarial analyzes based on the best estimation principles. The said change in the calculation method had a net effect of 540 million TL in the Compulsory Traffic branch. December 31, 2022 H/P with discount Method Gross URR Net URR RSH – Taken over 154% Writing Year 170.519.237 170.519.237 Mandatory Traffic - Out of Pool 107% Writing Year 496.804.108 496.804.108 TKU Pool – Taken over 199% Accident Year 4.913.004 4.913.004 General Liability-Out of Pool 124% Accident Year 94.908.190 59.036.326 Total 767.144.539 731.272.675 215 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 RISKS AND ASSESSMENT OF THE GOVERNING BODY UNCONSOLIDATED FINANCIAL STATEMENTS TOGETHER WITH INDEPENDENT AUDITORS’ REPORT THEREON CONSOLIDATED FINANCIAL STATEMENTS TOGETHER WITH INDEPENDENT AUDITORS’ REPORT THEREON FINANCIAL STATUS