MILLI REASURANS ANNUAL REPORT 2018

CONTENTS General Information 2 Vision-Mission 3 Shareholder Structure 4 Corporate Profile 6 Milestones 12 Chairman’s Message 14 General Manager’s Message 20 Board of Directors 23 Participation of the Members of the Board of Directors in Relevant Meetings during the Fiscal Period 24 Senior Management 25 Internal Systems Managers 26 Organization Chart 27 Human Resources Applications 28 2018 Annual Report Compliance Statement 29 Independent Auditor’s Report on the Annual Report of the Board of Directors Financial Rights Provided to the Members of the Governing Body and Senior Executives 32 Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities 32 Research & Development Activities Activities and Major Developments Related to Activities 34 Information on Investments Made by the Company during the Accounting Period 34 Repurchased Own Shares by the Company 34 Disclosures Concerning Special Audit and Public Audit during the Reporting Period 34 Lawsuits Filed Against the Company and Potential Results 34 Disclosures on Administrative or Judicial Sanctions Imposed on the Company and the Members of the Governing Body 34 Assessments on Prior Period Targets and General Assembly Resolutions 34 Expenses Incurred in the Reporting Period in Relation to Donations, Grants and Social Responsibility Projects 34 Relations with the Controlling Company or an Affiliate Thereof 36 Internal Audit 37 Internal Control 38 Affiliates 40 Corporate Social Responsibility Financial Status 44 Economic Outlook 50 Turkish Insurance Industry 52 Turkish Reinsurance Market and Milli Re in 2018 56 Global Reinsurance Market and Milli Re in 2018 63 Financial Strength, Profitability and Solvency 64 Key Financial Indicators 66 The Company Capital 67 2018 Technical Results 69 2018 Financial Results 71 General Assembly Agenda 72 Report by the Board of Directors 74 Dividend Distribution Policy 75 Dividend Distribution Proposal Risks and Assessment of the Governing Body 77 Risk Management 81 Assessment of Capital Adequacy 81 Transactions Carried Out with Milli Re’s Risk Group 81 The Annual Reports of the Parent Company in the Group of Companies Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon 83 Independent Auditor’s Report 86 Unconsolidated Financial Statements as at and for the Year Ended December 31, 2018 88 Unconsolidated Balance Sheet as of December 31, 2018 93 Unconsolidated Statement of Income for the Year Ended December 31, 2018 96 Unconsolidated Statement of Changes in Equity for the Year Ended December 31, 2018 98 Unconsolidated Statement of Cash Flows for the Year Ended December 31, 2018 99 Unconsolidated Statement of Profit Distribution for the Year Ended December 31, 2018 100 Notes to the Unconsolidated Financial Statements as of December 31, 2017 Consolidated Financial Statements Together with Independent Auditors’ Report Thereon 158 Information on Consolidated Subsidiaries 159 Independent Auditor’s Report 162 Consolidated Financial Statements as at and for the Year Ended December 31, 2018 164 Consolidated Balance Sheet as of December 31, 2018 169 Consolidated Statement of Income for the Year Ended December 31, 2018 172 Consolidated Statement of Changes in Equity for the Year Ended December 31, 2018 174 Consolidated Statement of Cash Flows for the Year Ended December 31, 2018 175 Consolidated Statement of Profit Distribution for the Year Ended December 31, 2018 176 Notes to the Consolidated Financial Statements as of December 31, 2018 Contact Information