Anadolu Hayat Emeklilik A.s. · BIST:ANHYT
Anadolu Hayat Emeklilik A.s — Investor Presentation (December 2019)
47 slides from Anadolu Hayat Emeklilik A.s's investor presentation, December 2019
Slide 1: Investor Presentation
Investor Presentation Istanbul, Turkey – December 2019
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**** 7% 25% 6% 20% 5% 4% 15% 3% 10% 2% 5% 1% 0% 0% 1990-1999 2000-2009 2010-2018 Turkey OECD Euro-15 CPI Interest Rates Budget Balance (% of GDP)** 0% -1% -2% -3% -4% -5% -6% 2011 2012 2013 2014 2015 2016 2017 201
Slide 5: Urgent Need to Increase Domestic Savings
Turkey at a Glance Urgent Need to Increase Domestic Savings 4% Current Account Balance (% of GDP)* Weight of Pension Funds in Household Savings (TRY billion)** 7% 1750 2% 6% 1500 0% 5% 1250 -2% 4% 1000 -4% 750 3% -6% 500 2% 250 1% -8% 2012 2013 2014 2015 2016 2017 2018 2019 0 0% 2011 2012 2013 2014
Slide 6: Demographic Opportunity Window
Turkey at a Glance Demographic Opportunity Window Population by Age 9,0% 2018 2080 8,0% 7,0% Population (millions) : 82.4 107.1 6,0% Median Age : 32.0 45.0 5,0% 4,0% Fertility : 2.10 1.65* 3,0% 2,0% Proportion of Elderly Population : 8.8% 25.6% 1,0% 0,0% 2018 2080 2019 October Decreasing fertility a
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 17 companies in 2019. 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 Benefit Payments 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 ap
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 • Integration of Employee Under Discussion • 25% State Contribution since 2013 Implemented Termination Benefits (Severence • Withholding tax limited to capital gains 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 22.2 Million Canada Switzerland Australia United States Unit
Slide 15: Attractive Market
Our Markets Attractive Market The Number of Companies* Foreign Investment Share 19 19 73% 74% 18 18 18 17 17 17 69% 65% 65% 63% 61% 14 13 54% 53% 10 52% 9 45% 37% 39% 6 6 36% 5 4 4 4 4 4 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 Life Private Pension Paid-In
Slide 16: 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 75,1% Participant Funds : TRY 101.9 Billion State Contribution Funds : TRY 17.3 Billio
Slide 17: Private Pension System: Pension Funds
Our Markets Private Pension System: Pension Funds* Repo and International Securities Money 1,9% Market Instruments 9,9% Nominal & Real Investment Return of Pension Funds 27% 24% 23% Equity 20% 18% 16% 18% 11% 15% 15% 12,6% 13% 11% 9% 11% 11% 13% 14% 10% 10% 3% 6% Government 1% 3% 2% 3% 0% Bonds Othe
Slide 18: Private Pension System: New Frontiers
Our Markets Private Pension System: New Frontiers Joining Turkish Integration of Citizens Residing Employee Abroad in Individual Pension Termination System and Benefits Collecting (Severence Contributions Payments) with Based On Foreign Auto Enrolment Currency Withdrawing Some of the Private Pension
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 WORKFORCE* SOCIAL SECURITY Eligible Employees Social Security Participants PARTICIPANTS (4A&4C) (age less than 45)** (4a&4c) 1.6 Million 3.1 Million 13.2 Million 17.6 Million (4a public sector) (4c public sector) 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 All phases of Auto Enrolment were completed. Private companies with 250-999 employees 2017 April Public administrations 2017 July Private companies with 100-249 employees Mark
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 (2018) 1/20 of OECD average. 3,276 Low pen
Slide 25: Life Insurance
Our Markets Life Insurance Life Insurance Total GWP Life Insurance GWP (TRY million) (by Product Category) 12.000,00 11,360 160% 150% YoY (TOTAL) : 44% 11.000,00 140% Term Life : 41% 10.000,00 130% Endowment / Saving : 69% Annuity : -35% 120% 110% 9.000,00 100% 8.000,00 90% 7.000,00 6,766 6,835 66%
Slide 26: Corporate Profile
Anadolu Hayat Emeklilik Corporate Profile 26
Slide 27: Anadolu Hayat Emeklilik 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 23.0 Billion 2.1 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 Customer Service Center in İstanbul I Organization 11 District Sales Offices Branch Office in TRNC HQ and Regions : 591 Human II Resources Direct Sales Team : 496 Total : 1,087 Total Assets : TRY 27,135 million Financial Shareholders’ Equ
Slide 29: Financial Highlights
Anadolu Hayat Emeklilik Financial Highlights (TRY Million) 2018 2019 Change Total GWP and Net Contributions 2,032.5 3,148.7 55% Life Mathematical Provisions 1,740.3 2,231.8 28% Pension AUM 16,937.6 22,913.7 35% Total Assets 20,221.5 27,134.8 34% Shareholders Equity 940.6 1,273.7 35% Total Technical
Slide 30: 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 Drawdown Pension Plans Group Group Plans • Money Market • Bond • First Debt • Equity Fund Plans Plans • Conservative • Balanc
Slide 31: Distribution Network
Anadolu Hayat Emeklilik Distribution Network Private Pensions New Business Channel Mix (Contributions) – 2019 26 District Sales Offices 1,271 Branches 2,826 Licensed Intermediaries 69 Licensed Tele-Sales Agents 231 Agencies 426 Licensed Intermediaries Tele Sales İşbank 3,3% (Branch+DS+TS) 86,8% Agen
Slide 32: Deep Bench with Lots of Talent
Anadolu Hayat Emeklilik Total Number Deep Bench with Lots of Talent of Employees: 1,087 Young & Energetic Educated Diverse 18-24 7% Primary Level 0,4% 25-29 23% High School 2,1% Female 61% 30-34 32% University Male 39% 35-39 22% Graduate 8,0% 89,5% 40-44 11% 45-49 3% 50+ 2% 32
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 Project Digital Corporate Identity The first phase of the (AHEŞUBE, AHEMOBİL, AHEWISE) Financial Systems transformation project to serve Transformation private pension operations (GL / FAH) established in February 2017 includin
Slide 35: Perfect Customer Experience
Anadolu Hayat Emeklilik Perfect Customer Experience Customer Experience Projects & Operational Excellence Among the vision of ‘Perfection in Customer Experience’, there are 5 ongoing projects. Chatbot project has ben closed. Our new and modernised Mobile app will be online within the first half of 2
Slide 36: Focus on Customer Retention
Anadolu Hayat Emeklilik Focus on Customer Retention Continuity Index* (%) 100 99 98 97 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct
Slide 37: A Strong Brand Name
Anadolu Hayat Emeklilik A Strong Brand Name Received «Customers’ Friend» award by The first and only international certification UNEP-FI member of association ICERTIAS Turkish insurance sector Became Women’s Awarded as best-in-class private Empowerment pension company at customer Principles experien
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% 17% 16% 16% 19% 19% 19% 19% 19% Market Share Market Share 25.000,00 1.160.000,00 1,148,956 22,075 1,120,505 1.140.000,00 1,114,224 20.000,00 1.12
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) 10% 12% 13% 10% 10% 11% 900.000,00 Market Share Market Share 1.000,00 800.000,00 771,227 900,00 866 800,00 700.000,00 590,403 700,00 600.000,00 6
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) 11% 10% 8% 9% 10%* 8% 9% 7% 7% 9%* 1.400,00 Market Share Market Share 1,229.0 1.200,00 1.000,00 910,6 900,00 1.000,00 800,00 700,00 800,00 639,2 600,00 574,7 459,4 449,9 5
Slide 41: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Life Technical Profit (TRY million) Pension Technical Profit (TRY million) 90,7 100,00 90,00 87,6 300,00 264,1 80,00 70,00 67,1 250,00 60,00 200,00 151,1 50,00 150,00 132,6 112,5 40,00 100,00 86,5 30,00 22,0 21,1 20,00 50,00 10,00 0,00 0,00 2015 2016 2017
Slide 42: Statutory Financials: Dividends and Capital Adequacy
Anadolu Hayat Emeklilik Statutory Financials Net Distributable Profit / Dividend to Shareholders (TRY Million) Dividend Payout Ratio (%) 300 255 77 250 75 221 70 67 200 186 170 51 142 140 150 130 100 100 90 60 50 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Cash Dividend / Net Distributable P
Slide 43: Statutory Financials: Operating Expenses
Anadolu Hayat Emeklilik Statutory Financials Technical Profit / Operating Expenses (TRY Million) Operating Expenses – 2019 700,00 573,3 600,00 Commission 500,00 Expenses 440,1 49% 400,00 352,5 353,7 318,9 300,00 270,4 237,6 199,2 200,00 Administration 133,0 Expenses 108,3 100,00 16% Employee Benefit
Slide 44: Statutory Financials: Summary of Income Statement
Anadolu Hayat Emeklilik Statutory Financials Summary of Income Statement (TRY Million) 2015 2016 2017 2018 2019 CAGR YOY Non-Life Technical Profit / Loss -0.24 -0.57 -0.54 -1.08 -1.03 44% -5% Life Technical Profit / Loss 86.48 112.49 132.61 151.10 264.08 32% 75% Pension Technical Profit / Loss 22.02
Slide 45: Statutory Financials: Pension Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Pension Technical Profit (TRY Million) 2015 2016 2017 2018 2019 CAGR YOY Pension Technical Income 209.06 236.76 300.55 369.19 427.72 20% 16% 1- Fund Management Income 144.26 173.82 216.74 256.42 304.27 21% 19% 2- Management Fee 26.38 21.20 32.96 46.36 58.
Slide 46: Statutory Financials: Life Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Life Technical Profit (mio TRY) 2015 2016 2017 2018 2019 CAGR YOY Life Technical Income 602.51 700.85 741.97 1,004.27 1,493.82 25% 49% 1- Earned Premiums (Net of Reinsurer Share) 391.78 475.43 544.07 625.55 1,193.75 32% 91% 2- Investment Income 202.87 214
Slide 47: Contact and Disclaimer
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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