MILLI RE 2023 ANNUAL REPORT

Notes to the Consolidated Financial Statements As of December 31, 2023 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish) The Company has classified the reserve amounting to TL 3.630.893 calculated for health and personal accident policies with a term of more than one year as long-term liabilities (31 December 2022: TL 4.685.839). 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 28.701.633.588 (December 31, 2022: TL 15.226.687.322) and reinsurer share in unearned premiums reserve amounting TL 4.797.310.036 (December 31, 2022: TL 2.523.561.505) Furthermore, unearned premiums reserve includes Social Security Institution (“SSI”) share amounting to TL 343.265.174 (December 31, 2022: TL 265.022.490). 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. 2.25 Outstanding claims reserves 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Treasury and Finance on 5 December 2014 and the “Circular on Actuarial Chain Ladder Method” numbered 2010/12 have been repealed, with the exception of articles 9 and 10.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. Anadolu Sigorta used the gradual transition rate specified in the “Circular on Amending the Circular on Outstanding Claims Reserves (2014/16)” dated February 29, 2016 and numbered 2016/11 of the Ministry of Treasury and Finance, using the rate of 100% as of December 31, 2016. started to reflect the best loss estimation to the tables and continued the same practice in this period. Anadolu Sigorta, in accordance with the Temporary Article 12 of the Regulation Amending the Regulation on Tariff Implementation Principles in Highways Motor Vehicles Compulsory Financial Liability Insurance, which was published in the Official Gazette dated 11 July 2017 and numbered 30121, for step and/or vehicle groups with high damage frequency. It has been announced that the “Risk Insured Pool” has been established to be effective as of 2017. In this context, starting from April 12, 2017, the premium and damage amounts related to traffic insurance policies issued within the scope of the pool are transferred by the Turkish Motor Vehicles Bureau to the T.R. It has started to be shared among insurance companies within the framework of the principles determined by the Ministry of Treasury and Finance. While calculating the IBNR for the portfolio of pools transferred and taken over within the scope of the said pool application at Anadolu Sigorta, the “Summary Actuarial Valuation Report for the Risky Insured Pool Final Loss/Premium Ratio Range Estimation” shared by TMVO was taken as the basis. After the change in the legislation, the Group has created accounting records over the premium, damage and commission amounts transferred to the pool and taken over from the pool within the scope of its share within the scope of the monthly receipts finalized by the Turkish Motor Vehicles Office (TMVO). has provided its reflection in the financial statements. Except for the life branch, outstanding claims reserve consists of claims are recorded in the year in which they occur, based on reported claims and the difference between the result of the actuarial chain ladder method whose content and application criteria stated by Turkish Insurance and Private Pension Regulation and Supervision Authority, and reported but not settled claims are considered as incurred but not reported (“IBNR”) claims. Actuarial chain ladder method may be differentiated by Turkish Insurance and Private Pension Regulation and Supervision Authority for reinsurance companies due to their special conditions. 202 MİLLİ RE