Agesa Hayat Ve Emeklilik A.s. · BIST:AGESA
Agesa Hayat Ve Emeklilik A.s — H1 2021 Earnings Presentation
32 slides from Agesa Hayat Ve Emeklilik A.s's earnings presentation, Aug 10, 2021
Slide 1: Presentation to Investors H1 2021 Earning Release
Presentation to Investors H1 2021 Earning Release 10 August 2021
Slide 2: Key Financial Results
Key Financial Results Şirkete Özel (Internal)
Slide 3: Solid Financial Foundations
Solid Financial Foundations H1 2021 YoY/Δ Pension AUM (inc AE) 32.3 bTL 21% Leading position in private companies’ pension AUM and AE Total GWP (Life+PA) 861 mTL 31% Success of long-term credit life product and strong RoP portfolio Total Technical Profit 531 mTL 62% Strong growth resulting from high
Slide 4: A Story of Solid Profitable Growth
A Story of Solid Profitable Growth Profit for the Period (mTL)* Shareholders’ Equity and Solvency Ratio (mTL)* Solvency Ratio CAGR: +34% 150% 172% 193% 190% 196% 136% 176% 97% 258 41% 17 CAGR: +25% 1.143 213 1.076 13 852 813 153 350 660 8 110 258 523 241 437 5 201 145 131 105 2016 2017 2018 2019 202
Slide 5: Historical Track Record of Value Creation
Historical Track Record of Value Creation CAGR YoY Excl. Tax 2016 2017 2018 2019 2020 2016-20 H1 2020 H1 2021 2020-21 Rate Change Pension AUM (inc AE) 11.8 bTL 15.3 bTL 17.3 bTL 23.1 bTL 30.5 bTL 27% 26,6 bTL 32,3 bTL 21% Total GWP (Life+PA) 317 mTL 471 mTL 565 mTL 988 mTL 1.332 mTL 43% 657 mTL 861
Slide 6: Financials
Financials Şirkete Özel (Internal)
Slide 7: Summary of P&L from Segmental Reporting
Summary of P&L from Segmental Reporting 2016 2017 2018 2019 2020 CAGR H1 2020 H1 2021 YoY Q1 2021 Q2 2021 QoQ Pension Technical Profit 156 207 234 243 283 16% 130 159 22% 81 78 -4% Life Protection Technical Profit 114 151 214 281 473 43% 178 355 100% 178 177 -1% Life Savings Technical Profit 4 3 7 5
Slide 8: Solid and Resilient Technical Profitability with Operating Leverage Potential
Solid and Resilient Technical Profitability with Operating Leverage Potential Technical Profit (mTL)* Expense Ratio (%)* Expense ratio=(Opex-AE Related Expenses-Sales Expenses)/(Opex-AE Related Expenses- Sales Expenses+IFRS Proft Before Tax) 47,3% 45,5% 45,0% 41,3% 43,0% 41,2% 37,8% CAGR: 29% 62% 79
Slide 9: Flexible Dividend Policy Focused on Growth
Flexible Dividend Policy Focused on Growth Dividend Policy Objective set amongst core shareholders to aim at distributing 50% of AgeSA’s Turkish GAAP-based distributable profit Current focus however is on increasing the scale of operations and therefore near-term priority is to reinvest in the busin
Slide 10: Overview - Business Lines
Overview - Business Lines Şirkete Özel (Internal)
Slide 11: Differentiated Management of Trends & Dynamics per Segment
Differentiated Management of Trends & Dynamics per Segment Pension* Life Protection** Personal Accident AUM – Inc. State contribution (mTL) Gross Written Premium (mTL) Gross Written Premium (mTL) FMC % (inc. State contribution) 1,5 1,5 1,4 1,3 1,3 1,3 1,2 CAGR: 6% CAGR: 49% 1.257 21% 35% 82 CAGR: 27
Slide 12: Pension
Pension (1) Sustainable Growth and Scale Ambitions Pensions AUM including State Contribution (mTL) Technical Profit (mTL) 21% CAGR: +27% CAGR: +16% 32.311 30.473 283 26.617 243 234 23.133 22% 207 17.304 156 159 15.325 130 11.792 2016 2017 2018 2019 2020 H1 2020 H1 2021 2016 2017 2018 2019 2020 H1 20
Slide 13: Life Protection
Life Protection Sustainable and Resilient Growth Model Fuelled by Bancassurance GWP (mTL) Technical Profit (mTL, %)* CAGR: +49% CAGR: +43% 1.257 35% 473 100% 896 355 829 281 615 214 480 178 393 151 114 254 2016 2017 2018 2019 2020 H1 2020 H1 2021 2016 2017 2018 2019 2020 H1 2020 H1 2021 Market Share
Slide 14: Market Consistent Embedded Value Disclosures
Market Consistent Embedded Value Disclosures Şirkete Özel (Internal)
Slide 15: Diversified business model supporting value growth
Diversified business model supporting value growth Pension Life Protection Personal Accident Total 2020 HY 2021 HY 2020 HY 2021 HY 2020 HY 2021 HY 2020 HY 2021 HY 11 % 54 % -24% 22% PVNBP (m TL) 1.779 1.971 694 1.071 47 35 2.520 3,076.9 VNB (m TL) Before Expense 28 % -31 % 21 27 147 43 % 209 9 6 177
Slide 16: Proven track record of embedded value growth
Proven track record of embedded value growth 2.628 14% CAGR 2.292 2.035 1.882 Million TL 1.662 1.475 1.204 1.248 955 740 682 570 441 460 474 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021HY Years Şirkete Özel (Internal) 16 ** Source: Company data, unaudited results
Slide 17: Value Driven Year-on-Year Growth
Value Driven Year-on-Year Growth MCEV (mTL) Comments Value of in-force (VIF) is the stock of discounted value of 15% 2.628 future profits, contributing 72% of the value in the MCEV balance sheet whereas the remaining 28% is composed 2.292 of the net assets, ie net worth. 840 45% Life & PA No allowan
Slide 18: Disclaimer
Disclaimer The information in this presentation has been prepared by AgeSA Hayat ve Emeklilik A.Ş. (the “Company” or “AgeSA”) solely for use at a presentation concerning the Company, its proposed listing on the Borsa İstanbul and the proposed offering (the “Offering”) of ordinary shares of the Compa
Slide 19: Thank you
Thank you (AcE)
Slide 20: Appendix
Appendix
Slide 21: New Action Plan to Expand
New Action Plan to Expand Life Protection + Personal Accident H1 2021 / H1 2020 YoY Total Premium Growth Rate DSF+Agency * Non-Credit Linked 34% 267 mTL (31%) Bancassurance 18% 194 mTL (23%) Non-Credit Linked 37% 396 mTL (46%) Bancassurance Credit Linked 31% 856 mTL (Total Company) (Total Company) Ş
Slide 22: Solid Sales Culture through a Multidistribution Platform
Solid Sales Culture through a Multidistribution Platform to Expand Scale and Penetration in Pension and Life Exclusive 15-year Fastest growing distribution Bancassurance Agencies distribution agreement # Branches Akbank: ~ 800 # Agencies: ~ 350 channel Akbank sales coaches: ~ 320 Total PVNBP: 500m (
Slide 23: Pension
Pension Summary P&L Pension Technical Profit (mTL) Key Profit Drivers 2016 2017 2018 2019 2020 CAGR H1 2020 H1 2021 YoY Q1 2021 Q2 2021 QoQ Pension volume (AUM) Fund Management Lapses and Retention 137 177 209 228 303 22% 138 167 21% 82 85 4% Income(1) New Pension Fee Structure Management & Entry/Ex
Slide 24: Life Protection
Life Protection Summary P&L Life Protection Technical Profit (mTL) Key Profit Drivers (Excluding Life Savings) Net earned premium volumes 2016 2017 2018 2019 2020 CAGR H1 2020 H1 2021 YoY Q1 2021 Q2 2021 QoQ Death and Benefits claims Gross Written Premiums 254 393 480 896 1.257 49% 615 829 35% 387 4
Slide 25: Personal Accident
Personal Accident A Complementary Profit Pool for the Group GWP (mTL) Technical Profit (mTL) CAGR: +6% CAGR: +21% 35 35 82 75 28 69 66 24 -28% -15% 52 17 17 38 15 27 2016 2017 2018 2019 2020 H1 2020 H1 2021 2016 2017 2018 2019 2020 H1 2020 H1 2021 Market Share % (in terms of GWP) Claims & Commission
Slide 26: Personal Accident
Personal Accident Summary P&L Personal Accident Technical Profit (mTL) Key Profit Drivers 2016 2017 2018 2019 2020 CAGR H1 2020 H1 2021 YoY Q1 2021 Q2 2021 QoQ Net earned premium volumes Accident / Benefits claims Gross Written Premiums 52 69 75 82 66 6% 38 27 -28% 17 10 -42% Surrender levels Commis
Slide 27: Pension Retention and Persistency at the Forefront of our Strategy
Pension Retention and Persistency at the Forefront of our Strategy Collection Rate (%) Total Monthly Exit Rate (Lapse (inc. transfer out) + Maturity) (% AuM) 0,31% 68,0% 66,3% 0,26% 0,26% 64,0% 0,24% 61,6% 62,4% 61,3% 60,7% 0,31% 0,21% 0,22% 1,60% 1,32% 1,39% 1,25% 0,94% 1,03% 0,89% 2016 2017 2018 2
Slide 28: Capital-Light Business Model & Strong Solvency Position
Capital-Light Business Model & Strong Solvency Position Comfortable solvency ratios driven by a measured approach to risk and new product introductions, which affords the business scope and flexibility pursuing growth options and / or returning cash to shareholders Regulatory Capital Requirement Sol
Slide 29: Reconciliation between IFRS & Statutory Profit
Reconciliation between IFRS & Statutory Profit IFRS vs. Statutory Profit for the Period (mTL)* Profit for the Period Reconciliation (mTL)* 2016 2017 2018 2019 2020 CAGR H1 2020 H1 2021 YoY CAGR: 34% 350 IFRS Profit for the 97% 110 153 214 258 350 34% 131 258 97% Period 295 Equalisation Reserve 258 2
Slide 30: MCEV and VNB Sensitivities
MCEV and VNB Sensitivities Sensitivities (mTL) Assurance Required capital at the Lapse rates +10% Lapse rates -10% Maintenance expenses -10% mortality/morbidity -10% Paid-up rates +10% Paid-up rates -10% Solvency I level Market interest rates +1% Market interest rates -1% 200 153 160 131 120 80 59 6
Slide 31: Strong VNB contribution to MCEV growth
Strong VNB contribution to MCEV growth VNB Bridging (mTL) Comments 300 HY 2021 Value of New Business grew by 31% from HY 2020. 250 The largest contributors to the growth in VNB came from 27 increases in sales volumes and a shift in product mix 16 43 40 from pension and personal accident to higher ma
Slide 32: MCEV Analysis of Change
MCEV Analysis of Change MCEV Reconciliation (mTL) Comments MCEV growth is driven by VNB, a typical characteristic of an emerging market insurance company, followed by the expected return which is the unwinding of the 187 discount rate in the year arising from policies in-force at 210 190 81 the star
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