Anadolu Hayat Emeklilik A.s. · BIST:ANHYT
Anadolu Hayat Emeklilik A.s — Investor Presentation (December 2020)
47 slides from Anadolu Hayat Emeklilik A.s's investor presentation, December 2020
Slide 1: Investor Presentation
Investor Presentation Istanbul, Turkey – December 2020
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 r
Slide 4: Turkey at a Glance: Growing Economy
Turkey at a Glance Growing Economy GDP Average Annual Growth* CPI*** and Interest Rates**** 6% 25% 5% 20% 4% 15% 3% 10% 2% 5% 1% 0% 0% 1990-1999 2000-2009 2010-2019 Turkey OECD Euro-19 CPI Interest Rates Budget Balance (% of GDP)** 0% -1% -2% -3% -4% -5% -6% -7% -8% -9% -10% -11% 2011 2012 2013 2014
Slide 5: Urgent Need to Increase Domestic Savings
Turkey at a Glance Urgent Need to Increase Domestic Savings Current Account Balance (% of GDP)* Weight of Pension Funds in Household Savings (TRY billion)** 4% 7% 2.500 2% 2.250 6% 0% 2.000 5% -2% 1.750 1.500 4% -4% 1.250 3% -6% 1.000 750 2% -8% 500 2012 2013 2014 2015 2016 2017 2018 2019 2020 1% 25
Slide 6: Demographic Opportunity Window
Turkey at a Glance Demographic Opportunity Window Population by Age 16% 2019 2080 14% 12% Population (millions) : 83,2 107,1 10% Median Age : 32,4 45,0 8% 6% Fertility : 1,88 1,65* 4% 2% Proportion of Elderly Population : 9.1% 25.6% 0% 2019 2080 2020 October Decreasing fertility and increasing longe
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 Funds are managed by Started in 2003. asset management 15 companies in 2020 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) ✓ Ministry of Treasury Pension and Finance Companies ✓ ISE Settlement and Custody ✓ Ministry
Slide 11: Pillar III Private Pension System: Incentives
Our Markets Pillar III Private Pension System: Incentives For Participants For Employers Contribution Stage Investment Stage Income Tax Benefits Employer contributions are deductible from tax base up to 15% of gross salary with a • Contributions with a cap of • Investment income of • Withholding tax
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 Under Discussion • 25% State Contribution since 2013 • Integration of Employee Implemented • Withholding tax limited to capital gains Termination Benefits (Severence Payments) with Auto Enrolment • Pe
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 0% 25% 50% 75% 100% 125% 150% 175% 200% 225% Denmark Pension Participants Social Security Participants Netherlands 6.9 Million Iceland 23.7 Million Canada Switzerland Australia United States Unit
Slide 15: Pillar III Private Pension System: Key Highlights
Our Markets Pillar III Private Pension System: Key Highlights Total Amount of Contributions Distribution of Contributions Key Figures by Contract Type by Marketing Channel Participants : 6.9 Million Individual Participant Funds : TRY 137.1 Billion 79% State Contribution Funds : TRY 21.3 Billion Dire
Slide 16: Private Pension System: Pension Funds
Our Markets Private Pension System: Pension Funds Repo and International Securities Money 1.9% Market Instruments 3.9% Nominal & Real Investment Return of Pension Funds 27% 28% 24% 23% 20% 18% 18% 16% 15% Equity 13% 11% 15% 14% 11% 9% 11% 11% 13% 12% 10% 10% 14.0% 3% 6% Government 1% 3% 2% 3% 0% Bon
Slide 17: Private Pension System: New Frontiers
Our Markets Private Pension System: New Frontiers Integration of Employee Termination Benefits (Severence Payments) with Auto Enrolment Partially Private Pension Withdrawal Right for Minors 17
Slide 18: 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 19: 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 20: 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 21: Auto Enrolment - New Target Market
Our Markets Auto Enrolment - New Target Market WORKFORCE* SOCIAL SECURITY PARTICIPANTS (4A&4C)*** Eligible Employees Social Security Participants 3.3 Million 3.1 Million (age less than 45)** (4a&4c) (4a public sector) (4c public sector) 15.5 Million 20.7 Million 12.1 Million (4a private sector) Soci
Slide 22: Auto Enrolment – Market Preview
Our Markets Auto Enrolment – Market Preview Date Target Staging Process 2017 January Private companies with 1,000+ employees All phases of Auto Enrolment were completed. Private companies with 250-999 employees 2017 April Public administrations Market Size* 2017 July Private companies with 100-249 e
Slide 23: 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 (2018) 1/20 of OECD average. 3,247 Low pen
Slide 24: Life Insurance
Our Markets Life Insurance Life Insurance Total GWP Life Insurance GWP (TRY million) (by Product Category) 16.000,00 160% 15.000,00 14,293 150% 140% YoY (TOTAL) : 27% 14.000,00 130% Term Life : 22% 13.000,00 120% Endowment / Saving : 55% 12.000,00 11,244 110% Annuity : 16% 100% 11.000,00 90% 10.000,
Slide 25: Corporate Profile
Anadolu Hayat Emeklilik Corporate Profile 25
Slide 26: 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 32.8 Billion 2.3 Million ❖ First life insurance company in Turkey ❖ The first publicly traded Life & Pension Company since
Slide 27: At a Glance
Anadolu Hayat Emeklilik At a Glance Headquartered in Istanbul Customer Service Center in İstanbul I Organization 12 District Sales Offices Branch Office in TRNC HQ and Regions : 557 Human II Resources Direct Sales Team : 494 Total : 1,051 Total Assets : TRY 36,067 Million Financial Shareholders’ Equ
Slide 28: Financial Highlights
Anadolu Hayat Emeklilik Financial Highlights (Million TRY) 2019 2020 Change Total GWP and Net Contributions 3,148.7 4,681.2 49% Life Mathematical Provisions 2,231.8 3,185.6 43% Pension AUM 22,913.7 30,434.8 33% Total Assets 27,134.8 36,067.1 33% Shareholders Equity 1,273.7 1,581.3 24% Total Technica
Slide 29: Lines of Business
Anadolu Hayat Emeklilik Lines of Business Lines of Business Pension Funds Conservative Balanced Dynamic Aggressive Non- Employer Income Private Individual Sponsored Sponsored Drawdow Pension Plans Group Group n Plans • Money Market • Bond • First Debt • Equity Fund Plans Plans • Instruments • Conser
Slide 30: Distribution Network
Anadolu Hayat Emeklilik Distribution Network Private Pensions New Business Channel Mix (Contributions) – 2020 26 District Sales Offices 1.226 Branches 2.652 Licensed Intermediaries 57 Licensed Tele-Sales Agents 261 Agencies 448 Licensed Intermediaries İşbank İşbank Agency (Branch+DS+TS) 12,0% 84,9%
Slide 31: Deep Bench with Lots of Talent
Anadolu Hayat Emeklilik Deep Bench with Lots of Talent Total Number of Employees: 1,051 Young & Energetic Educated Diverse 18-24 3% Primary Level 0,4% 25-29 23% High School 1,8% Female 62% 30-34 University Male 38% 30% Graduate 8,4% 89,4% 35-39 25% 40-44 13% 45-49 4% 50+ 2% 31
Slide 32: 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 33: Core System Transformation Project
Anadolu Hayat Emeklilik Core System Transformation Project Strong Infrastructure Following the transition to Private Pension System, the second phase covering Life Insurance processes started in 2017. Fadata has delivered the codes to be integrated into the project and the development process of AHE
Slide 34: Perfect Customer Experience
Anadolu Hayat Emeklilik Perfect Customer Experience Customer Experience Projects & Operational Excellence 6 of our products have started to be sold online via our web site: Future Investment Plan, Standard Critical Illness Insurance, Personal Accident Insurance, Youth Pension Plan, Master Retirement
Slide 35: Focus on Customer Retention
Anadolu Hayat Emeklilik Focus on Customer Retention Continuity Index* (%) 100 99 98 Dec-03 Sep-09 Jun-11 Dec-18 Jun-04 Sep-04 Sep-06 Mar-17 Jun-19 Sep-19 Jun-20 Sep-20 Mar-04 Dec-04 Jun-05 Sep-05 Mar-05 Dec-05 Jun-06 Mar-06 Dec-06 Jun-07 Sep-07 Sep-08 Mar-07 Dec-07 Jun-08 Mar-08 Dec-08 Jun-09 Mar-09
Slide 36: Our Awards
Anadolu Hayat Emeklilik Our Awards For the 4th time in a row, we received golden prize in Social Media Awards Turkey Received «Customers’ Friend» among private pension and life award by international insurance firms. certification association ICERTIAS PSM Awards which is organized by Payment Systems
Slide 37: Sustainability
Anadolu Hayat Emeklilik Sustainability Effective governance structure in sustainability activities… Senior level commitment in sustainability management... Anadolu Hayat Emeklilik enters BIST Sustainability Index We are the first and only insurance and pension company quoted at BIST Sustainability I
Slide 38: Strong Market Positioning in Private Pensions
Anadolu Hayat Emeklilik Strong Market Positioning in Private Pensions Participants (Pillar III) Assets Under Management (Pillar III) (TRY million) 17% 17% 16% 16% 16% 19% 19% 19% 19% 19% Market Share Market Share 35.000,00 29,357 1.160.000,00 1,148,956 30.000,00 1.150.000,00 1.140.000,00 25.000,00 2
Slide 39: Strong Market Positioning in Private Pensions (Auto Enrolment)
Anadolu Hayat Emeklilik Strong Market Positioning in Private Pensions Participants (Auto Enrolment) Assets Under Management (Auto Enrolment) (TRY million) 12% 13% 13% 13% 10% 11% 11% 10% 1.000.000,00 Market Share Market Share 1.400,00 882,336 1,224 900.000,00 800.000,00 771,227 1.200,00 700.000,00 1
Slide 40: 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) 10% 8% 9% 10% 12% 9% 7% 7% 9% 10% 1.900,00 Market Share Market Share 1,684.1 1.700,00 1.200,00 1,082.0 1.500,00 1.000,00 910.6 1.300,00 1,229.0 800,00 1.100,00 600,00 900,
Slide 41: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Life Technical Profit (TRY million) Pension Technical Profit (TRY million) 145.5 160,00 140,00 350,00 327.7 120,00 300,00 264.1 100,00 87.6 90.7 250,00 200,00 80,00 67.1 151.1 132.6 60,00 112.5 150,00 40,00 100,00 21.1 20,00 50,00 0,00 0,00 2016 2017 2018
Slide 42: Statutory Financials: Dividends and Capital Adequacy
Anadolu Hayat Emeklilik Statutory Financials Net Distributable Profit / Dividend to Shareholders (TRY Million) Dividend Payout Ratio (%) 400 346 350 81 300 280 75 77 255 70 250 221 186 51 200 170 150 142 140 130 100 100 50 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Cash Dividend / Net Distr
Slide 43: Statutory Financials: Technical Profit and Expenses
Anadolu Hayat Emeklilik Statutory Financials Technical Profit / Operating Expenses (TRY Million) Operating Expenses – 2020 800,00 690.7 700,00 600,00 573.3 472.2 500,00 440.1 400,00 352.5 353.7 Commission Expenses 318.9 53% 237.6 300,00 199.2 133.0 200,00 Administration 100,00 0,00 Expenses 2016 201
Slide 44: Summary of Income Statement
Anadolu Hayat Emeklilik Statutory Financials Summary of Income Statement (mio TRY) 2016 2017 2018 2019 2020 CAGR YOY Non-Life Technical Profit / Loss -0.57 -0.54 -1.08 -1.03 -0.93 13% -9% Life Technical Profit / Loss 112.49 132.61 151.10 264.08 327.61 31% 24% Pension Technical Profit / Loss 21.09 67
Slide 45: Pension Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Pension Technical Profit (mio TRY) 2016 2017 2018 2019 2020 CAGR YOY Pension Technical Income 236.76 300.55 369.19 427.72 506.28 21% 18% 1- Fund Management Income 173.82 216.74 256.42 304.27 368.73 21% 21% 2- Management Fee 21.20 32.96 46.36 58.86 76.88 3
Slide 46: Life Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Life Technical Profit (mio TRY) 2016 2017 2018 2019 2020 CAGR YOY Life Technical Income 700.85 741.97 1,004.27 1,493.82 2,179.29 33% 46% 1- Earned Premiums (Net of Reinsurer Share) 475.43 544.07 625.55 1,193.75 1,665.37 37% 40% 2- Investment Income 214.83
Slide 47: 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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