MILLI RE 2020 ANNUAL REPORT

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 58 Milli Re Annual Report 2020 America Even though the Covid‑19 pandemic has stimulated further price increases in the U.S on top of what has been recorded over the past two years, programs were placed at rates below the initial expectations as a result of the capital raises and new start‑up reinsurers, which helped achieving supply and demand equilibrium in the markets. Nonetheless, aggregate cover capacity was scarce especially for treaties with wildfire and hurricane exposures, while quota share reinsurance buyers faced no issues in securing the protection as many reinsurers were willing to allocate high levels of capacity in order to take maximum advantage of the improved rate environment observed in the insurance market. While loss affected cat programs experienced risk‑adjusted price increases fluctuating between 10% to 25%, for loss free cat programs, upward adjustments in the range of 5% to 15%were observed. Loss free risk programs renewed stable to 15% up; whereas, price increases stood between 5% to 20% for loss impacted programs. Despite the fact that Canada experienced its costliest hailstorm ever in June, the overall losses from natural disaster remained relatively low across the country in 2020. While upward price movements were capped at a maximum of 7.5% for loss free cat programs, risk adjusted price increases varied between 10% to 20% for loss impacted programs. In respect of risk programs, loss affected programs saw 10% to 30% upward price adjustments. On the other hand, for loss free programs, price increases remained between 5% to 7.5%. Asia Covid‑19 has made 2020 like no other year in history. Change was inevitable, adaptation was critical, time was against the world. The fear in Asia quickly reverberated to the rest of the world. The re/insurance market had no breather from the previous two years of record‑breaking losses arising from the unprecedented cat events. The already tightening market in the region, caught in great uncertainty, was forced to accelerate greater discipline and hardening. The uncertainty in the market grew as the year passed by. A silver lining amidst this storm was the observed greater cooperation between buyers and sellers of capacity as they sailed on the same boat. While the year had markedly less severe insured cat event losses, we were still reminded of the exposures with many notable events with high economic losses. Early November 2020, Super Typhoon Goni, the strongest typhoon to have made landfall with sustained winds of 313 km/h, damaged 250,000 homes and caused over USD 1 billion of economic loss in Philippines. Philippines could only mark the end of their extended typhoon season after Typhoon Vamco that occurred in mid‑November and caused similar level of losses as Super Typhoon Goni. Indonesia started and ended the year with flooding in Sumatera and Java with more than 8,000 houses damaged or destroyed in each event. Economic loss currently stands at tens of millions of US dollars. In January, hailstorms in south eastern Australia caused insured losses of USD 1.4 billion. The absence of large industry cat events is a welcome respite as we continue to navigate the Covid‑induced uncertainty in economic activities and the unprecedented exposures to silent risks across classes of business. Middle East Countries in the Middle East completed 2020 under the pressure of Covid‑19 pandemic and the collapse in oil prices which affected all economic activities in the Region. Economy of the Region is projected to contract by 5.2% in 2020, which is 4.1% below the forecast in April 2020, and 7.8%worse than that of October 2019, reflecting an increasingly pessimistic outlook. The Region is expected to recover only partially in 2021. The blockade and isolation of Qatar, led by Saudi Arabia and the United Arab Emirates (UAE), which began in June 2017 ended with a declaration at the 41 st Gulf Cooperation Council (GCC) Summit on 4 th January 2021. Despite the constructive atmosphere in the GCC summit’s aftermath, it is still too early to conclude that the tensions in the region will be resolved quickly, considering the disagreements on some regional issues and the ongoing war in Yemen. Global Reinsurance Market and Milli Re