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) 25 Fee revenue None. 26 Investment income Investment income is presented in Note 4.2 - Financial risk management . 27 Net income accrual on financial asset Net realized gains on financial assets are presented in Note 4.2 - Financial risk management . 28 Assets held at fair value through profit or loss Presented in “ Note 4.2 - Financial Risk Management”. 29 Insurance rights and claims December 31, 2020 December 31, 2019 Claims paid, net off reinsurers’ share (4.033.901.940) (3.799.456.398) Changes in outstanding claims reserves, net off reinsurers’ share (1.296.902.726) (867.957.203) Changes in unearned premium reserves, net off reinsurers’ share (597.237.878) (472.362.222) Change in equalization reserves (82.445.465) (81.093.878) Change in life mathematical reserves, net off reinsurers’ share 25.677 35.104 Exchange in return for bonuses and discounts, deducting the reinsurer share (4.000.000) - Changes in unexpired risks reserves, net off reinsurers’ share (44.388.442) (4.606.649) Total (6.058.850.774) (5.225.441.246) 30 Investment contract benefits None. 31 Other expenses The allocation of the expenses with respect to their nature or function is presented in Note 32 - Expenses by nature below. 32 Operating expenses For the years ended December 31, 2020 and 2019, the operating expenses are disclosed as follows: December 31, 2020 December 31, 2019 Commission expenses (Note 17) 1.157.562.296 996.680.788 Commissions to the intermediaries accrued during the period (Note 17) 1.256.127.553 1.083.550.914 Changes in deferred commission expenses (Note 17) (98.565.257) (86.870.126) Employee benefit expenses (Note 33) 326.590.288 291.494.818 Foreign exchange losses 100.278.632 30.188.546 Administration expenses 151.872.827 140.528.715 Commission income from reinsurers (Note 10) (261.111.864) (211.883.477) Commission income from reinsurers accrued during the period (Note 10) (287.174.537) (219.921.607) Change in deferred commission income (Note 10) 26.062.673 8.038.130 Advertising and marketing expenses 15.465.393 28.727.445 Outsourced benefits and services 29.339.763 25.179.548 Commission expenses from reinsurance transactions (Note 10) 194.928.710 164.169.217 Commissions from reinsurance transactions during the period (Note 10) 202.814.621 170.843.037 Change in deferred reinsurance commission expenses (Note 10) (7.885.911) (6.673.820) Other 10.198.239 14.804.358 Total 1.725.124.284 1.479.889.958 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 Milli Re Annual Report 2020 239