Anadolu Hayat Emeklilik A.s. · BIST:ANHYT
Anadolu Hayat Emeklilik A.s — Investor Presentation (June 2017)
45 slides from Anadolu Hayat Emeklilik A.s's investor presentation, June 2017
Slide 1: Investor Presentation
Investor Presentation Istanbul, Turkey – June 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: 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 0% 5% -2% 750 4% -4% -6% 500 3% -8% 2% -10% 250 1% -12% 2011 2012 2013 2014 2015 2016 0 0% 2011 2012 2013 2014 2015
Slide 6: Demographic Opportunity Window
Turkey at a Glance Demographic Opportunity Window Population By Age 9% 8% 2016 2050 7% 6% Population (millions) : 79.8 93.5 5% Median Age : 31,4 43 4% 3% Fertility : 2.14 1.65 2% Proportion of Elderly Population : 8.3% 20.8% 1% 0% 2016 2050 2017 April Decreasing fertility and increasing longevity me
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 starte
Slide 9: Pillar III Private Pension System: Important Features
Our Markets Pillar III Private Pension System: Important Features Started in 2003. Funds are managed by 18 companies in 2017. asset companies. Defined contribution and Minimum retirement age: 56 voluntary participation. Completion of 10 years. Participants can switch funds, Incentives for both pensi
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
Our Markets Pillar III Private Pension System: Growth Accelerated with Increased Government Support • 25% State Contribution since 2013 Under Discussion • Withholding tax limited to capital Implemented gains • Pension fund transfers from • Severance Payments provident funds* by the end of 2017 • Fee
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% 6.7 Million 21.7 Million Netherlands United States OECD Weighted Weighted average Average 123.6% United K
Slide 15: Attractive Market
Our Markets Attractive Market The Number of Companies* Foreign Investment Share 19 19 74% 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 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 Life Private Pension Paid-In Capital GWP The pension syste
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 : 6.8 Million (2016 total) Individual Participant Funds : 60.7 Billion TRY 75% State Contribution Funds : 9 Billion TR
Slide 17: Private Pension System: Pension Funds
Our Markets Private Pension System: Pension Funds* Nominal & Real Investment Return of Pension Funds International Repo and Money Securities 23.9% 23.3% Market Instruments 2.8% 6.5% 19.6% 18.4% 17.9% 15.8% 14.5% 13.3% 11.0%11.1% 11.0% 10.9% 9.2% 9.5% 9.6% 9.0% 5.9% 3.0% 3.0% 2.2% 2.9% 1.3% Equity 0.
Slide 18: Private Pension System: New Frontiers
Our Markets Private Pension System: New Frontiers Simplification Auto Severance of Fund Enrolment Payments Choices 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 case of
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) 12.6 Million 16.8 Million 12.9 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 Second phase of Auto Enrolment has been completed. Private companies with 250-999 employees 2017 April The employees of private companies over 250 Public administrations emplo
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
Our Markets Life Insurance Life Insurance Total GWP Life Insurance GWP (TRY million) by Product Category 5,500.00 50% 4,963 40% 4,500.00 CAGR 17% 25% 30% 3,701 34% 3,500.00 3,350 3,229 3,314 20% 2,679 10% 15% 1% 2,500.00 -4% 2,245 0% -10% 1,500.00 -20% -30% 500.00 -40% -500.00 2012 2013 2014 2015 20
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 14.7 Billion TRY 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 : 525 Human II Resources Direct Sales Team : 500 Total : 1,025 Total Assets : 16,103 million TRY Financial Shareholders’ Equity : 840 million TRY III Metrics G
Slide 29: Financial Highlights
Anadolu Hayat Emeklilik Financial Highlights (Million TRY) 2015 2016 Change 2016H1 2017H1 Change Total GWP and Net Contributions 1,736.8 1,859.3 7% 833.4 933.8 12% Life Mathematical Reserves 1,700.2 1,682.4 -1% 1,695.3 1,713.9 1% Pension AUM 8,933.6 11,359.4 27% 10,233.3 13,078.3 28% Total Assets 11
Slide 30: Lines of Business
Anadolu Hayat Emeklilik Lines of Business Lines of Business Pension Funds Non- Employer Income Medium High Private Individual Sponsored Sponsored Drawdown Low Risk Pension Plans Group Plans Group Plans Plans Risk Risk Bond Fund Eurobond $ Fund Equity Fund Auto Bond Fund Eurobond € Fund Auto (HSBC) E
Slide 31: Distribution Network
Anadolu Hayat Emeklilik Distribution Network Private Pensions New Business Channel Mix (Contributions) – 2017H1 25 District Sales Offices 1,371 Branches 1,923 Licensed Intermediaries 55 Licensed Tele-Sales Agents 284 Agencies 617 Licensed Intermediaries Tele Sales İşbank 7% (Branch+DS+TS) Agency 83%
Slide 32: Deep Bench with Lots of Talent
Anadolu Hayat Emeklilik Total Number Deep Bench with Lots of Talent of Employees: 1,025 Young & Energetic Educated Diverse 18-24 4% Primary Level 0.5% Female 61% 25-29 26% High School 3% Male 30-34 35% 39% University 89% 35-39 21% 40-44 9% 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 Transformation (GL / FAH) 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-11 Jan-04 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jan-05 Jan-06 Jan-07 Oct-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Oct-03 Apr-04 Oct-
Slide 36: A Strong Brand Name
Anadolu Hayat Emeklilik A Strong Brand Name Turkey’s most admired Turkey’s best life The life insurance and Awarded by Middle East private pension company * insurance company private pension Insurance Forum (MEIF) -5th time- - 2nd time - company with the as the best performing highest customer insur
Slide 37: Strong Market Positioning in Private Pensions
Anadolu Hayat Emeklilik Strong Market Positioning in Private Pensions Participants Assets Under Management (mio TRY) 20% 18% 17% 17% 17% 17% 17% 21% 20% 20% 19% 19% 19% 19% Market Share Market Share 14,000.00 13,061 1,120,399 1,086,839 1,132,761 1,200,000.00 1,026,593 12,000.00 11,366 10,247 863,365
Slide 38: Strong Market Positioning in Life Insurance
Anadolu Hayat Emeklilik» Strong Market Positioning in Life Insurance Life Insurance GWP (mio TRY) Term Life GWP (mio TRY) 14% 12% 11% 11% 10% 10% 9% 7% 6% 7% 8% 9% 8% %8* 600.00 Market Share Market Share 500.6 Term Saving Life 500.00 15.8% 450.00 80.6% Annuity 395.0 402.1 3.6% 400.00 367.0 394 364.7
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% Capital Adequacy Ratio 1200 250.00 229.8 1000 877 200.00 175.9 800 789 141.2 710 150.00 134.8 620 109.0 600 105.7 99.0 525 100.00 400
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 H1 350.00 318.9 Commission 300.00 270.4 Expenses 250.00 241.7 39% 215.4 200.00 175.4 166.0 147.1 Administration 150.00 133.0 108.3 95.0 Expenses 100.00 67.5 20% 52.9 52.3 62.8 50.00
Slide 42: Statutory Financials: Summary of Income Statement
Anadolu Hayat Emeklilik Statutory Financials Summary of Income Statement (mio TRY) 2012 2013 2014 2015 2016 CAGR 2016 H1 2017 H1 YOY Non-Life Technical Profit / Loss 0.01 0.02 -0.03 -0.24 -0.57 - -0.27 -0.02 -93% Life Technical Profit / Loss 33.42 63.41 63.80 86.48 112.49 35% 51.75 63.87 23% Pension
Slide 43: Statutory Financials: Pension Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Pension Technical Profit (mio TRY) 2012 2013 2014 2015 2016 CAGR 2016 H1 2017 H1 YOY Pension Technical Income 139.03 132.00 166.57 209.06 236.76 14% 113.33 140.95 24% 1- Fund Management Income 88.47 90.76 113.57 144.26 173.82 18% 82.03 101.75 24% 2- Manag
Slide 44: Statutory Financials: Life Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Life Technical Profit (mio TRY) 2012 2013 2014 2015 2016 CAGR 2016 H1 2017 H1 YOY Life Technical Income 502.68 598.51 550.43 602.51 700.85 9% 275.26 345.90 20% 1- Earned Premiums (Net of Reinsurer Share) 346.81 382.88 353.32 391.78 475.43 8% 202.81 261.50
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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