1. Turkish Insurance Industry by Sezi Meric, Milli Re

2. Contents  Market History  General Market Conditions  Role of Foreign Capital  Turkish Reinsurance Market  Future Outlook  Milli Re

3. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re The History of the Turkish Insurance Market The first developments regarding insurance activities in Turkey were seen following the big fire which occurred in Istanbul in 1870. The pioneering insurance companies established in Turkey (during the Ottoman times) were the agencies of the English and French companies (Sun, Northern, North British, La Fonciere). The first Turkish capitalized insurance company was established in 1918.

4. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re 20052006200720082009 Non-Life32 3536 Life – Pension 11 1012 Life10 141211 Reinsurance21111 The History of the Turkish Insurance Market

5. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Turkish Insurance Market: a brief overview Premium ProductionTL Branches200720082009Share (%) Fire1.482.841.5771.596.779.1281.670.810.10013,43 Marine364.887.256413.600.680374.352.0363,01 Accident (*)3.574.502.8353.330.869.7283.237.041.57626,02 Motor TPL1.650.517.9112.062.285.3062.249.245.39118,08 Eng.523.356.482535.217.981623.890.9485,01 Agriculture95.331.476125.111.095151.119.6511,21 Health1.217.976.5631.326.125.5051.415.189.39211,37 Legal Protection39.216.02432.412.60036.028.9460,28 Pers.Acc.400.666.470467.501.881505.591.6744,06 Credit13.784.87340.944.61128.436.1570,22 Non- Life Total9.597.468.68510.203.673.19910.614.317.69885,35 Life1.412.198.6491.576.208.8751.821.653.55914,65 G.Total11.009.667.33411.779.882.07512.435.971.258100,00 (*) Including Motor Own Damage

6. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Premium Production vs. Annual Growth

7. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Turkish Insurance Market: a profitability check 200720082009 Profit (TL) 447.558.788481.931.039217.007.460 Premium (TL) 11.009.667.33411.774.219.81312.435.971.258 (%)4,654,101,74 * Including both life and non-life branches. BranchLoss RatioMarket Share Accident (including M.O.D)90%26% MTPL92%18% Health92%11% Total91-92%55%

8. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Profit / Shareholder‘s Fund Ratios 200720082009 Profit (TL)447.558.788481.931.039217.007.460 Shareholde r’s Fund (TL) 6.848.092.6337.021.692.1618.821.077.683 Profit/ Shareholde r’s Fund (%) 6,536,862,50

9. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Important Insurance Organizations in the Market TARSIM: Agricultural Insurance Pool TCIP: Turkish Catastrophe Insurance Pool Earthquake insurance for dwellings became compulsory after 1999 earthquake in the Marmara region. The main objectives of TCIP are: To provide an earthquake insurance cover for dwellings in return for an affordable premium To reduce or mitigate the financial burden of potential earthquakes suffered by the State, by spreading it to the international financial and reinsurance markets To make contribution in developing insurance awareness in the society. Insurance Data Center TRAMER

10. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Foreign Capital Development in the Market 2005 2006 2007 2008 2009 No. of Foreign Capital Companies 2024354143 Non-Life Companies 1114192224 Life / Pension Companies 910161919 20052006200720082009 Foreign Share in Paid-up Capital 16,81% 23,00%38,09%51,37% 54,98% Non-Life Companies 13,64% 19,00% 38,10%51,20%55,40% Life / Pension Companies 24,85% 34,85% 38,07% 51,92% 54,76%

11. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Turkish Reinsurance Market (Premium Ratio) 2009 million TL Branches Market Insurance Premium Market Reinsurance Premium Market Reins. Prem. Ratio. in % Fire 1.67195257.00 Marine 37418349.00 Accident (*) 3.80772018.93 Motor TPL 2.24933314.82 Engineering 62442468.00 Agriculture 15112885.40 Health 1.41526819.00 Total 10.2913.01129.25 (*) Including Motor Own Damage, Personal Accident, Legal Protection and Credit.

12. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Turkish Reinsurance Market in Brief.. Per Risk Protection in General Currently 23 companies employ proportional reinsurance protection for the risks they have written. On the other hand, the number of the companies that have excess of loss protection on gross account basis is only 4. Milli Re being the leader of 13 of the proportional treaties, working on bouquet basis, holds a 25% share within proportional reinsurance premium of the market.

13. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Outlook for 2010.. Despite the Global Economic Crisis, Non-Life premiums rose by nearly 13% in Q1 2010. A number of regulatory initiatives have acted as a catalyst for the development of the insurance industry: authorities are implementing more compulsory insurances encourage strong reserving, correct and appropriate reinsurance purchasing, and credit risk control

14. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Outlook for 2010.. Companies are forced for stricter financial compliance (Auditors, Shareholders, Regulatory Bodies) Trend of increased foreign investments/take-overs, consolidation expected in the coming years.

15. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Corporate Profile Est. in 1929 as the World‘s first and only private company to operate compulsory reinsurance for each insurance branch & promote the development of the Turkish Insurance Market. Run the compulsory reinsurance system in all lines of business until 31.12.2001. Actively started writing business from emerging markets as from 01.01.2006. Financial Strength Ratings A.M. Best11.08.2009B++ (outlook stable) Standard & Poor‘s24.02.2010tr AA

16. Market History Market Overview Foreign Capital Reinsurance Market Future Outlook Milli Re Portfolio Mix Key Figures (2009) Gross Premiums:$547 Million Paid-Up Capital:$256 Million Assets:$1 Billion Net Profit:$59 Million

17. Thank you for your Attention... Vă multumesc pentru atentie… Sezi Meric (Area Underwriter) T: +90 212 231 47 30/ext. 1261 F: +90 212 246 16 08 smeric@millire.comsmeric@millire.com www.millire.comwww.millire.com