MILLI RE 2020 ANNUAL REPORT

Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) 17 Insurance contract liabilities and reinsurance assets Estimation of the ultimate payment for the outstanding claims is one of the most important accounting assumptions of the Company. Estimation of the insurance contract liabilities contains several ambiguities by nature. The Company makes calculation of the related insurance technical provisions accordance with the Insurance Legislation and reflects them into consolidated financial statements as mentioned in Note 2 - Summary of significant accounting policies . As of December 31, 2020, and 2019, technical reserves of the Group’ are as follows: December 31, 2020 December 31, 2019 Unearned premiums reserves, gross 4.737.678.185 3.899.597.423 Unearned premiums reserves, ceded (Note 10) (1.089.324.599) (868.053.967) Unearned premiums reserves, SSI share (94.034.856) (74.462.604) Unearned premiums reserves, net 3.554.318.730 2.957.080.852 Outstanding claims reserve, gross 8.565.250.176 6.595.436.311 Outstanding claims reserve, ceded (Note 10) (2.179.921.969) (1.507.010.830) Outstanding claims reserve, net 6.385.328.207 5.088.425.481 Unexpired risk reserves 177.424.807 89.355.440 Unexpired risk reserves, ceded (59.209.135) (15.528.210) Unexpired risk reserves, net 118.215.672 73.827.230 Equalization reserves, net (*) 440.273.432 357.827.967 Other technical reserves, net 440.273.432 357.827.967 Life mathematical reserves 13.014 38.691 Bonuses and Discount 4.000.000 - Total technical reserves, net 10.502.149.055 8.477.200.221 Short-term 10.059.955.305 8.117.368.295 Medium and long-term 442.193.750 359.831.926 Total technical reserves, net 10.502.149.055 8.477.200.221 As of December 31, 2020, and 2019, movements of the insurance liabilities and related reinsurance assets are presented below: Unearned premiums reserve December 31, 2020 Gross Ceded SSI Share Net Unearned premiums reserve at the beginning of the period 3.899.597.423 (868.053.967) (74.462.604) 2.957.080.852 Written premiums during the period 9.636.641.512 (2.445.366.365) (170.100.697) 7.021.174.450 Earned premiums during the period (8.798.560.751) 2.224.095.734 150.528.445 (6.423.936.572) Unearned premiums reserve at the end of the period 4.737.678.184 (1.089.324.598) (94.034.856) 3.554.318.730 Unearned premiums reserve December 31, 2019 Gross Ceded SSI Share Net Unearned premiums reserve at the beginning of the period 3.280.229.790 (732.987.716) (63.611.725) 2.483.630.349 Written premiums during the period 8.091.533.647 (1.976.107.372) (136.068.059) 5.979.358.216 Earned premiums during the period (7.472.166.014) 1.841.041.121 125.217.180 (5.505.907.713) Unearned premiums reserve at the end of the period 3.899.597.423 (868.053.967) (74.462.604) 2.957.080.852 Activities and Major Developments Related to Activities General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Milli Re Annual Report 2020 232