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) In line with the relevant circular, Anadolu Sigorta also took into account the 28% rate in discounting the net cash flows arising from the outstanding claims provision. As of the reporting date, the company is recorded the net discounting amount of claims reserves as TL 10.555.127.559 (December 31, 2022: TL 4.841.484.474). With the Circular No. 2024/3 “Circular on Amendments to Circular No. 2016/22 on Discounting Net Cash Flows Arising from the Provision for Outstanding Compensation” published on January 15, 2024, the Circular’s 7 th article was changed as “Net cash flows are discounted to cash value by taking into account 35% as of the financial reporting date”. Second article of the circular states that companies have not prepared financial statements may apply the commands of this circular as of December 31, 2023. Within the scope of this article, Milli Reasürans and Anadolu Sigorta continued to apply the 28% discount rate as they prepared their financial statements dated December 31, 2023. As of the reporting date, as a result of actuarial chain ladder method; Milli Reasürans, except Singapore branch, is recorded 100% of additional IBNR amounting to TL 651.285.087 (December 31, 2022: TL 260.743.671 negative IBNR) as outstanding claims reserve. As of the reporting date, TL 115.375.539 (December 31, 2022: TL 89.138.657) of IBNR provision is recorded for Singapore branch. In accordance with “Circular Related to Information on Calculation of Incurred But Not Reported Claims Reserve” and dated November 26, 2011, companies may decrease their outstanding claims reserve balances based on the winning ratio of the sub-branches calculated from the last five years claims. Winning ratio used for decreasing in outstanding claims reserves could not exceed 25% (15% for the new sub-branches which do not have five- year data). The Company did not make any discounts regarding the case reserves as of 31 December 2023 (31 December 2022: None). 2.26 Mathematical reserves In accordance with the Communiqué on Technical Reserves, companies operating in life and non-life insurance branches are obliged to allocate adequate mathematical reserves based on actuarial basis to meet liabilities against policyholders and beneficiaries for long-term life, health and personal Casualty insurance contracts. Actuarial mathematical reserves, according to formulas and basis in approved technical basis of tariffs for over one year-length life insurance, are calculated by determining the difference between present value of liabilities that the Group meets in future and current value of premiums paid by policyholder in future (prospective method). Mathematical reserves are recorded based on the data sent by ceding companies. 2.27 Unexpired risk reserves In accordance with the Communiqué on Technical Reserves, while providing unearned premiums reserve, in each accounting period, the companies should perform adequacy test covering the preceding 12 months due to the probability that future claims and compensations of the outstanding policies may be in excess of the unearned premiums reserve already provided. In performing this test, it is required to multiply the unearned premiums reserve, net with the expected claim/premium ratio, net. Expected claim/premium, net ratio is calculated by dividing incurred losses (outstanding claims reserve, net at the end of the period + claims paid, net -outstanding claims reserve, net at the beginning of the period) to earned premiums (written premiums, net + unearned premiums reserve, net at the beginning of the period -unearned premiums reserve, net at the end of the period). 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 28356 dated July 17, 2012; besides the net unexpired risk reserve detailed in the above, gross unexpired risk reserve is also calculated. The test is performed on main branch basis and in case where the net and gross expected claim/premium ratio is higher than 95%, reserve calculated by multiplying the exceeding portion of the expected claim/premium ratio with the unearned premiums reserve of that main branch is added to the reserves of that branch. Difference between the gross and net amount is represents reinsurer’s share. Premiums paid for non-proportional reinsurance agreements are considered as premiums ceded to the reinsurance firms. The portion of the amounts paid for non-proportional reinsurance agreements corresponding to the relevant period is considered as the ceded premium in the net premium calculation. Within the scope of the circular dated December 10, 2012 and numbered 2012/15 of the Turkey Ministry of Treasury and Finance, the calculation of the provision for ongoing risks is carried out on the basis of the main branches. As explained in the “Circular on Discounting Net Cash Flows Arising from Outstanding Claims Reserves” (2017/07), published by Turkey Ministry of Treasury and Finance on September 15, 2017, insurance companies discount the net cash flows that will be formed by the outstanding claims reserve in accordance with the insurance legislation, according to the principles specified in the circular will be able to. Pursuant to the 1 st article of the circular, the application of discount in the “General Liability” and “Land Vehicles Liability” branches of the outstanding claims provision has become mandatory. As of December 31, 2023, amounts have been reflected by taking into account the discount rate determined as 28% with the Circular No. 2023/21 “Circular on Amendments to Circular No. 2016/22 on Discounting Net Cash Flows Arising from the Provision for Outstanding Compensation” published on July 12, 2023. 205 2023 Annual Report GENERAL INFORMATION FINANCIAL RIGHTS PROVIDEDTOTHE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RISKS AND ASSESSMENT OF THE GOVERNING BODY ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES RESEARCH & DEVELOPMENT ACTIVITIES FINANCIAL STATUS FINANCIAL INFORMATION