MILLIRE_2019_Annual Report

211 Milli Re Annual Report 2019 Activities and Major Developments Related to Activities Financial Status 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 General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Millî Reasürans Türk Anonim Şirketi NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) (Currency: Turkish Lira (TL)) Except for the life branch, outstanding claims reserves 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 the Republic of Turkey Ministry of Treasury and Finance and reported but not settled claims are considered as incurred but not reported (“IBNR”) claims. Actuarial chain ladder method may be differentiated by the Republic of Turkey Ministry of Treasury and Finance for reinsurance companies due to their special conditions.Methods for the calculation of provision for incurred but not reported claims are determined by the Republic of Turkey Ministry of Treasury and Finance in the life-branch. The ACML methods selected for each branch is provided in the following section. The Group could not perform big claim elimination by Box Plox. December 31, 2019 December 31, 2018 Branches Milli Reasürans Anadolu Sigorta Milli Reasürans Anadolu Sigorta Fire and Natural Disasters Standard Chain Standard Chain Standard Chain Standard Chain General Damages (*) Standard Chain Standard Chain Standard Chain Standard Chain General Liability Standard Chain Cape Cod Standard Chain Cape Cod Land Vehicles Liability Standard Chain Cape Cod Standard Chain Cape Cod Marine Standard Chain Standard Chain Standard Chain Standard Chain Sea Vehicles Standard Chain Standard Chain Standard Chain Standard Chain Land Vehicles Standard Chain Standard Chain Standard Chain Standard Chain Casualty Standard Chain Standard Chain Standard Chain Standard Chain Health Standard Chain Standard Chain Standard Chain Standard Chain Air Vehicles Standard Chain Standard Chain Standard Chain Standard Chain Legal Protection Standard Chain Standard Chain Standard Chain Standard Chain Sea Vehicles Liabilities Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Sector Average (Insurance Association of Turkey 09/2018) Standard Chain Air Vehicles Liability Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Sector Average (Insurance Association of Turkey 09/2018) Standard Chain Fidelity Guarantees Sector Average (Insurance Association of Turkey 09/2019) - Sector Average (Insurance Association of Turkey 09/2018) -- Financial Losses Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Sector Average (Insurance Association of Turkey 09/2018) Standard Chain Credit Sector Average (Insurance Association of Turkey 09/2019) Standard Chain Sector Average (Insurance Association of Turkey 09/2018) Standard Chain Life Sector Average (Insurance Association of Turkey 09/2019) - Sector Average (Insurance Association of Turkey 09/2018) -- Facultative Third Party Liability - Standard Chain -- Standard Chain (*) Two separate calculations have been made as agriculture and non agriculture sub branches. (Milli Reasürans T.A.Ş.). The Company, as a reinsurance company, selects data, adjustments, applicable methods and development factors by itself over the data obtained from insurance companies on a branch basis via actuarial methods. According to the article 11 clause 5 of “Circular on Actuarial Report for Non-Life Insurance Branch” dated 6 November 2008, selections and results should be assess in detail in actuarial report by the actuary. The Company does not have sufficient data for ships, aircraft liability, Fidelity Guarantees, financial losses, credits and life branches. Furthermore, claim development tables have irregular distribution for the aforementioned branches. Therefore, the Company prefers to use sector average in the actuarial chain ladder method.