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 62 Milli Re Annual Report 2020 The only prominent natural catastrophe event in 2020 was the heavy rains and floods which affected the country’s financial hub Karachi in August. Given the low insurance penetration in the Region, the insured losses arising from these events were limited. Except the fire in the facilities of one of the leading cooking oil company in the country in June 2020, risk losses were also on a small scale in line with the previous year. As far as 2021 renewals are concerned, Pak Re had the first right of refusal in addition to the mandatory reinsurance share (35%) offered by all insurance companies in Pakistan. The commissions on proportional treaties with good results were mostly untouched, but there were slight reductions for contracts which performed poorly. Loss affected non proportional treaties have seen rate increases by 5% to 20%. Eastern Europe Deterioration in economy due to the Covid‑19 outbreak has also affected Eastern Europe insurance market and caused a 3.8% decline in its premium income, which was EUR 19.1 billion for the first half of 2020. The Non‑Life insurance premium accounted for 70% of the Region’s total premium production, while motor insurance continued its dominance in the Non‑Life premium production with 53%. The largest financial transaction in Central Europe was the acquisition of Dutch insurance giant Aegon by Vienna Insurance Group (VIG). By acquiring the assets of Aegon in Hungary, Turkey, Poland and Romania for EUR 830 million on 29 November 2020, VIG not only strengthened its leading position in CEE but also became the largest insurer in Hungary. While the catastrophic losses in CEE countries were relatively low, Croatia suffered from two major earthquakes in 2020. The earthquake in March with a magnitude of 5.3 affected Zagreb and caused property losses amounting to EUR 1.6 billion. On 29 th of December, another earthquake occurred being the worst of the last 140 years. The epicenter of 6.4 magnitude earthquake was a small town called Patrinja and was felt in neighboring countries such as Bosnia‑Herzegovina and Serbia. Thanks to low population density in the Region, devastating earthquake caused the death of only seven people and although insured loss amount is still unknown, because of the low penetration the event is not expected to create a heavy burden for the insurance industry. In January 2021 renewals, rates movements of loss free catastrophe excess of loss programs ranged between flat to 7.5% up. In respect of risk excess of loss programs, rates were up by 5% to 20% for loss hit and around 3% for loss free treaties. Global Reinsurance Market and Milli Re Deterioration in economy due to the Covid‑19 outbreak has affected Eastern Europe insurance market and caused a 3.8%decline in its premium income, which was EUR 19.1 billion for the first half of 2020. 7.5% In Eastern Europe insurance market’s January 2021 renewals, rates movements of loss free catastrophe excess of loss programs ranged between flat to 7.5% up.