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 60 Milli Re Annual Report 2020 Covid‑19 claims in the Region seems to be manageable due to most insurers’ robust capital buffers. The port explosion in Beirut which occurred on 4 August 2020 and resulted in many casualties and caused significant damage to the city, was the only major event of the year in the Region. The economic loss arising from this event stands around USD 7.5 billion while insured loss estimate ranges between USD 1 billion and USD 1.5 billion. During January 2021 renewals, commissions of most profitable proportional treaties remained the same, while there was some reduction for those treaties with poor performance. Rate adjustments for loss free non proportional treaties ranged from risk‑adjusted flat to 10% up, while increases on loss affected ones were roughly 20% up. Although there have been some withdrawals, reinsurance capacity was plentiful. North Africa Before the global spread of Covid‑19 outbreak, economic growth in North Africa was expected to exceed 4% in 2020 and 2021. However, the uncertain global environment due to pandemic and anticipated contraction in developed economies negatively impacted the growth forecast for the Region. Morocco, the largest insurance market in North Africa, kept its growth pace in the first half year of 2020 and increased its premium volume by 4.6%, reaching USD 2.78 billion. However, in parallel with the rest of the globe, Covid‑19 also affected Moroccan economy gravely. The collective protective measures taken by Supervisory Authority of Insurance and Social Welfare (ACAPS) against the pandemic is anticipated to have compensated for 76 million USD of premium reduction which could otherwise have led Moroccan insurance market profitability to shrink by 25%. Although the market registered a growth in 2020, the prospects for the future are still blurry due to the economic uncertainties caused by Covid‑19 pandemic. In addition to this, the upcoming general elections that will be held in September 2021 is yet another driver of the economic uncertainty in the country which evidently affects the insurance market. Algeria’s top 5 state owned insurance companies continuously dominate over the insurance market of the country with their 66.51% share in total. Motor insurance, accounting for around 47% of total premium production in Algeria, is by far the largest line of business in the market. In order to mitigate the heavy consequences of pandemic on the economy, Algerian insurers propose working on a scheme similar to their national catastrophe pool (ACIP). Considering its 1.69% Non‑Life insurance penetration rate, the size of Tunisian insurance market is still not at the desired level compared to its neighbors Morocco and Algeria, despite its welcoming position to international players. In the first half year of 2020, Tunisian insurance market contracted by 16% corresponding to USD 183.21 million of premium as a result of the decline in motor premiums, producing almost more than half of premiums written in the market and is by far the largest line of Tunisia’s Non‑Life segment on the back of the economic recession caused by Covid‑19. On the other hand, as a result of the safety measures taken by government against Covid‑19, there has been a 26% decline compared to the previous year in the number of road accidents during the lockdown. India The Indian economy witnessed severe slowdown due to the reduction in manufacturing, stress in non‑banking financial companies, decline in credit growth and sharp deceleration in consumption, investment as well as exports. In response to the social and economic crisis arising out of the Covid‑19 breakout, the policymakers announced various regulatory measures to boost liquidity and revitalize the credit cycle. The Indian Non‑Life insurance industry maintained robust growth during Financial Year 2020 and reported a gross direct premium of USD 26.7 billion, registering a growth rate of 11.72%. Mid‑term outlook is unclear owing to the Covid‑19. Health insurance has become the largest line of Non‑Life segment leaving motor insurance behind. During April‑September 2020, health premiums increased by 15% as a result of the outbreak. The government focuses on solvency and profitable growth of 3 state‑owned insurers as it withholds their long‑deliberated merger and therefore has decided a capital injection of around USD 1.3 billion. However, the mergers and acquisitions continue to be one of the hot topics in the market and last August, ICICI Lombard General Insurance and Bharti AXA General Insurance announced that they would merge their businesses by means of share swap deal. ICICI Lombard is expected to become India’s third largest company in Non‑Life sector with the completion of the merger. Global Reinsurance Market and Milli Re