Anadolu Hayat Emeklilik A.s. · BIST:ANHYT
Anadolu Hayat Emeklilik A.s — Investor Presentation (December 2017)
45 slides from Anadolu Hayat Emeklilik A.s's investor presentation, December 2017
Slide 1: Investor Presentation
Investor Presentation Istanbul, Turkey – December 2017
Slide 2: Agenda
Agenda 1. Turkey at a Glance 2. Our Markets • Private Pension System • Life Insurance 3. Corporate Profile 4. Financial Results 2
Slide 3: Turkey at a Glance
Turkey at a Glance
Slide 4: Turkey at a Glance: A Fast Growing Economy
Turkey at a Glance A Fast Growing Economy 6% GDP Average Annual Growth* 5% Over the last decade and half, Turkey 4% successfully stabilized its macro economy. 3% After the 1999–2001 economic crises, Turkey maintained a highly successful policy of 2% macroeconomic stabilization. 1% 0% 1990-1999 2000-
Slide 5: Urgent Need to Increase Domestic Savings
Turkey at a Glance Urgent Need to Increase Domestic Savings 6% Current Account Balance (% of GDP)* 1,250 Weight of Pension Funds in Household Savings (TRY billion)** 7% 4% 6% 2% 1,000 5% 0% 750 4% -2% -4% 3% 500 -6% 2% -8% 250 1% -10% 2011 2012 2013 2014 2015 2016 2017 0 0% 2011 2012 2013 2014 2015
Slide 6: Demographic Opportunity Window
Turkey at a Glance Demographic Opportunity Window Population By Age 9% 8% 2017 2050 7% 6% Population (millions) : 80.8 93.5 5% Median Age : 31.7 43 4% 3% Fertility : 2.10 1.65 2% Proportion of Elderly Population : 8.5% 20.8% 1% 0% 2017 2050 2017 September Decreasing fertility and increasing longevit
Slide 7: Our Markets
Our Markets Private Pension System Life Insurance
Slide 8: Private Pension System: Positioned in Pillar III
Our Markets Private Pension System: Positioned in Pillar III Three-Pillar System Pillar I Pillar II Pillar III State Pension Occupational Private Pension Mandatory Pension Voluntary Securing a minimum Workplace Pensions Opportunity to standard of living with Auto Enrolment increase retirement starti
Slide 9: Pillar III Private Pension System: Important Features
Our Markets Pillar III Private Pension System: Important Features Funds are managed by Started in 2003. asset management 18 companies in 2017. companies. Defined contribution and Minimum retirement age: 56 voluntary participation. Completion of 10 years. Participants can switch funds, Incentives for
Slide 10: Pillar III Private Pension System: Well Designed Structure
Our Markets Pillar III Private Pension System: Well Designed Structure Regulation Administration Monitoring ✓ Capital Markets ✓ Pension ✓ Pension Board (SPK) Accounts Monitoring Center Administered by (EGM) ✓ Undersecretariat Pension of Treasury Companies ✓ ISE Settlement and Custody ✓ Ministry of L
Slide 11: Pillar III Private Pension System: Incentives
Our Markets Pillar III Private Pension System: Incentives For Participants For Employers Contribution Stage Investment Stage Benefit Payments Employer contributions are tax deductible up to 15% of gross salary with a cap of • Contributions with a cap of • Investment income of • Withholding tax appli
Slide 12: Pillar III Private Pension System: Charging Structure
Our Markets Pillar III Private Pension System: Charging Structure Management Fee / Entrance Fee Fund Management Fee First 5 years of the contracts No change in fund management fee levels. A new rebate structure will be implemented by 2021. Maximum limit: 8.5% of the Fund Management Fees monthly lega
Slide 13: Growth Accelerated with Increased Government Support
Pillar III Private Pension System: Our Markets Growth Accelerated with Increased Government Support • 25% State Contribution since 2013 Under Discussion • Withholding tax limited to capital Implemented gains • Severance Payments • Pension fund transfers from • Deconcentration of asset managers provi
Slide 14: Pillar III Private Pension System: Big Growth Potential
Our Markets Pillar III Private Pension System: Big Growth Potential Pension Funds as a Percentage of GDP Pension Participants Social Security Participants 0% 25% 50% 75% 100% 125% 150% 175% 200% 6.9 Million 22.4 Million Netherlands United States OECD Weighted Weighted average Average 125.7% United K
Slide 15: Attractive Market
Our Markets Attractive Market The Number of Companies* Foreign Investment Share 19 19 74% 18 18 18 73% 17 69% 65% 65% 63% 61% 14 13 54% 53% 10 52% 9 45% 37% 39% 6 6 36% 5 4 4 4 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 Life Private Pension Paid-In Capital GWP The pen
Slide 16: Pillar III Private Pension System: Key Highlights
Our Markets Pillar III Private Pension System: Key Highlights Contributions Total Amount by Distribution of Contributions Key Figures Contract Type by Marketing Channel Participants : 6.9 Million (2016 total) Individual Participant Funds : TRY 67.7 Billion 75.4% State Contribution Funds : TRY 10.1 B
Slide 17: Private Pension System: Pension Funds
Our Markets Private Pension System: Pension Funds* Nominal & Real Investment Return of Pension Funds International 2017 Securities Repo and Money 2.1% 23.9% 23.3% Nominal Return : 15.4% Market Instruments Real Return : 3.1% 6.4% 19.6% 18.4% 17.9% 15.8% 15.4% 14.5% 13.3% 11.0%11.1% 11.0% 10.9% 9.2% 9
Slide 18: Private Pension System: New Frontiers
Our Markets Private Pension System: New Frontiers Simplification Auto of Fund Enrolment Choices Deconcentration Severance of Asset Payments Managers 18
Slide 19: Auto Enrolment: Basic Features
Our Markets Auto Enrolment: Basic Features* Automatic Minimum State contribution: enrolment of contribution • 25% on contributions current and new amount • 1,000 TRY initial bonus • 5% of assets at employees under set as annuity phase age 45 %3 of monthly wage Structural changes Gradual Simplified a
Slide 20: Auto Enrolment System: Incentives
Our Markets Auto Enrolment System: Incentives For Participants Contribution Stage Investment Stage Retirement Stage • Additional state contribution equal to 5% of • Contributions with a cap of annual legal • Investment income of auto enrolment funds savings at retirement date is provided in minimum
Slide 21: Auto Enrolment System: Charging Structure
Our Markets Auto Enrolment System: Charging Structure Management Fee / Entrance Fee Fund Management Fee No management or entrance fee. Fund management fee level is capped. According to the Law enacted in Fund Management Fee is capped at August 2016, no management or a maximum of 0.85%. entrance fee
Slide 22: Auto Enrolment - New Target Market
Our Markets Auto Enrolment - New Target Market SOCIAL SECURITY PARTICIPANTS (4A&4C) 0.9 Million 3.0 Million (4a public sector) (4c public sector) WORKFORCE* Eligible Employees Social Security Participants (age less than 45)** (4a&4c) 13.2 Million 17.5 Million 13.6 Million (4a private sector) Social
Slide 23: Auto Enrolment – Market Preview
Our Markets Auto Enrolment – Market Preview Date Target Staging Process 2017 January Private companies with 1,000+ employees Fourth phase of Auto Enrolment has been started. Private companies with 250-999 employees 2017 April The employees of private companies over 50 Public administrations employee
Slide 24: Life Insurance: Underpenetrated Market
Our Markets Life Insurance: Underpenetrated Market Life insurance market has great potentials in Turkey. Turkey’s life insurance market is extremely Insurance Premium per Capita (USD) underpenetrated as life premiums’ weight in GDP is only Global Comparison (2016) 1/20 of OECD average. Low penetrati
Slide 25: Life Insurance YoY
Our Markets Life Insurance YoY Term Life : 37% Life Insurance Total GWP Life Insurance GWP Endowment / Saving : 32% (TRY million) (by Product Category) Annuity : -6% 6,900.00 6,766 50% 34% 36% 40% 5,900.00 CAGR 19% 25% 4,963 30% 15% 4,900.00 20% 3,900.00 3,701 10% 3,350 3,229 0% 2,900.00 -4% -10% -2
Slide 26: Corporate Profile
Anadolu Hayat Emeklilik Corporate Profile
Slide 27: At a Glance
Anadolu Hayat Emeklilik At a Glance SECTOR’S SECTOR’S LEADER LEADER Life and Private Private Pension Pension Funds Contracts ❖ Established in 1990 as a subsidiary of İşbank TRY 16.4 Billion 1.3 Million ❖ First life insurance company in Turkey ❖ The first publicly traded Life & Pension Company since
Slide 28: At a Glance
Anadolu Hayat Emeklilik At a Glance Headquartered in Istanbul I Organization 11 District Sales Offices Branch Office in TRNC HQ and Regions : 530 Human II Resources Direct Sales Team : 482 Total : 1,012 Total Assets : TRY 17,877 million Financial Shareholders’ Equity : TRY 927 million III Metrics Gr
Slide 29: Financial Highlights
Anadolu Hayat Emeklilik Financial Highlights (Million TRY) 2016 2017 Change Total GWP and Net Contributions 1,859.3 2,203.7 19% Life Mathematical Provisions 1,682.4 1,725.7 3% Pension AUM 11,359.4 14,712.8 30% Total Assets 14,391.7 17,877.2 24% Shareholders Equity 860.9 926.6 8% Total Technical Prof
Slide 30: Lines of Business
Anadolu Hayat Emeklilik Lines of Business Lines of Business Pension Funds Medium Low Risk High Risk Non- Employer Income Risk Private Individual Sponsored Sponsored Drawdown Pension Plans Group Plans Group Plans Plans Money Market Bond Fund Equity Fund Conservative Flexible First Debt Instruments Dy
Slide 31: Distribution Network
Anadolu Hayat Emeklilik Distribution Network Private Pensions New Business Channel Mix (Contributions) – 2017 26 District Sales Offices 1,364 Branches 2.187 Licensed Intermediaries 59 Licensed Tele-Sales Agents 243 Agencies 510 Licensed Intermediaries Tele Sales 6.7% İşbank Agency (Branch+DS+TS) 15.
Slide 32: Deep Bench with Lots of Talent
Anadolu Hayat Emeklilik Total Number Deep Bench with Lots of Talent of Employees: 1,012 Young & Energetic Educated Diverse 18-24 6% Primary Level 0.4% Female 61% 25-29 27% High School 3% Male 30-34 34% 39% University 89% 35-39 19% 40-44 8% Graduate 8% 45-49 4% 50+ 2%
Slide 33: Corporate Strategy
Anadolu Hayat Emeklilik Corporate Strategy Become the market leader among private pension and life insurance companies Finance Become both the private Optimize operational Optimize ROE and risk pension and life insurance profitability and efficiency portfolio market leader Optimize customer and prod
Slide 34: Strong Infrastructure
Anadolu Hayat Emeklilik Strong Infrastructure Core System Transformation Digital Corporate Identity Project (AHEŞUBE, AHEMOBİL, AHEPAD) Financial Systems The first phase of the Transformation (GL / FAH) transformation project to serve private pension operations established in February 2017 including
Slide 35: Focus on Customer Retention
Anadolu Hayat Emeklilik Focus on Customer Retention Continuity Index (%) 100 99 98 97 Jul-12 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jan-15 Jan-04 Jan-05 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-16 Jan-17 Oct-03 Apr-05 Jan-06 Apr-
Slide 36: A Strong Brand Name
Anadolu Hayat Emeklilik A Strong Brand Name Turkey’s first company to receive the prestigious «Best corporate «Customers’ Friend» transformation» award award by ICERTIAS in by International Data customer relationship Corporation (IDC) Turkey management Received golden prize in First and only 2017 So
Slide 37: Strong Market Positioning in Private Pensions
Anadolu Hayat Emeklilik Strong Market Positioning in Private Pensions Participants Assets Under Management (TRY million) 18% 17% 17% 17% 17% 20% 20% 19% 19% 19% Market Share Market Share 1,400,000.00 16,000.00 14,581 1,148,227 14,000.00 1,120,505 11,366 1,200,000.00 1,026,593 12,000.00 1,000,000.00
Slide 38: Strong Market Positioning in Life Insurance
Anadolu Hayat Emeklilik Strong Market Positioning in Life Insurance Life Insurance GWP (TRY million) Term Life GWP (TRY million) 12% 11% 11% 10% 8.5% 6% 7% 8% 9% %7.4 700.00 Market Share Market Share 574.7 600.00 500.00 459.4 500.6 395.0 450.00 500.00 402.1 400.00 394.2 Term 365 Saving 350.00 Life 4
Slide 39: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Gross Profit for the Period (mio TRY) Shareholders’ Equity and Capital Adequacy Ratio (mio TRY) 433% 500% 553% 430% 408% 300.00 279.8 Capital Adequacy Ratio 1200 250.00 229.8 1000 877 200.00 175.9 789 800 150.00 134.8 710 600 620 99.0 525 100.00 400 50.00
Slide 40: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Net Distributable Profit / Dividend to Shareholders (mio TRY) Dividend Payout Ratio (%) 0.13 0.14 0.16 0.24 0.33 Dividend per Share Gross (TRY) 200 186 180 75 160 70 142 67 140 140 61 120 100 51 100 90 79 82 80 60 60 50 40 40 20 0 2012 2013 2014 2015 2016
Slide 41: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Technical Profit / Operating Expenses (mio TRY) Operating Expenses – 2017 400.00 352.5 Commission 350.00 318.9 Expenses 300.00 270.4 40% 241.7 215.4 250.00 199.2 200.00 Administration 150.00 133.0 Expenses 108.3 20% 67.5 100.00 52.3 50.00 Employee Benefit
Slide 42: Statutory Financials: Summary of Income Statement
Anadolu Hayat Emeklilik Statutory Financials Summary of Income Statement (mio TRY) 2013 2014 2015 2016 2017 CAGR YOY Non-Life Technical Profit / Loss 0.02 -0.03 -0.24 -0.57 -0.54 - -4% Life Technical Profit / Loss 63.41 63.80 86.48 112.49 132.61 16% 18% Pension Technical Profit / Loss -11.14 3.69 22
Slide 43: Statutory Financials: Pension Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Pension Technical Profit (mio TRY) 2013 2014 2015 2016 2017 CAGR YOY Pension Technical Income 132.00 166.57 209.06 236.76 300.55 18% 27% 1- Fund Management Income 90.76 113.57 144.26 173.82 216.74 19% 25% 2- Management Fee 17.77 21.58 26.38 21.20 32.96 13
Slide 44: Statutory Financials: Life Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Life Technical Profit (mio TRY) 2013 2014 2015 2016 2017 CAGR YOY Life Technical Income 598.51 550.43 602.51 700.85 741.97 4% 6% 1- Earned Premiums (Net of Reinsurer Share) 382.88 353.32 391.78 475.43 544.07 7% 14% 2- Investment Income 206.89 188.62 202.8
Slide 45: www.anadoluhayat.com.tr
www.anadoluhayat.com.tr investorrelations@anadoluhayat.com.tr DISCLAIMER The information in this document has been obtained by Anadolu Hayat Emeklilik A.Ş. from sources believed to be reliable, however, Anadolu Hayat Emeklilik A.Ş. cannot guarantee the accuracy, completeness or correctness of such i
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