Anadolu Hayat Emeklilik A.s. · BIST:ANHYT
Anadolu Hayat Emeklilik A.s — Investor Presentation (September 2017)
45 slides from Anadolu Hayat Emeklilik A.s's investor presentation, September 2017
Slide 1: Investor Presentation
Investor Presentation Istanbul, Turkey – September 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 5% 0% 750 4% -2% -4% 3% 500 -6% 2% -8% 250 1% -10% 2011 2012 2013 2014 2015 2016 0 0% 2011 2012 2013 2014 2015 2016
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 July Decreasing fertility and increasing longevity mea
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 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 • 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% 6.8 Million 21.9 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 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 : TRY 63.5 Billion 75% State Contribution Funds : TRY 9.6 Bill
Slide 17: Private Pension System: Pension Funds
Our Markets Private Pension System: Pension Funds* Nominal & Real Investment Return of Pension Funds International September 2017 Securities Repo and Money 2.3% 23.9% 23.3% Nominal Return : 11.2% Market Instruments 19.6% Real Return : 3.6% 6.1% 18.4% 17.9% 15.8% 14.5% 13.3% 11.0%11.1% 11.0% 10.9% 11
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) 0.8 Million 3.0 Million (4a public sector) (4c public sector) WORKFORCE* Eligible Employees Social Security Participants (age less than 45)** (4a&4c) 12.9 Million 17.2 Million 13.4 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 Third phase of Auto Enrolment has been completed. Private companies with 250-999 employees 2017 April The employees of private companies over 100 Public administrations employ
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 YoY Life Insurance GWP (TRY million) Term Life : 55% (by Product Category) 5,500.00 50% Endowment / Saving : 28% 4,963 Annuity : -6% 40% 4,411 4,500.00 CAGR 17% 25% 30% 3,701 34% 3,500.00 3,350 3,229 20% 2,679 2,900 10% 15% 1% 2,500.00 -4% 0% -10%
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 15.5 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 : 539 Human II Resources Direct Sales Team : 502 Total : 1,041 Total Assets : TRY 16,868 million Financial Shareholders’ Equity : TRY 882 million III Metrics Gr
Slide 29: Financial Highlights
Anadolu Hayat Emeklilik Financial Highlights (TRY million) 2015 2016 Change 2016Q3 2017Q3 Change Total GWP and Net Contributions 1,736.8 1,859.3 7% 1,302.9 1,460.9 12% Life Mathematical Provisions 1,700.2 1,682.4 -1% 1,680.0 1,715.9 2% Pension AUM 8,933.6 11,359.4 27% 10,821.8 13,780.6 27% Total Ass
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) – 2017Q3 26 District Sales Offices 1,370 Branches 2.127 Licensed Intermediaries 54 Licensed Tele-Sales Agents 284 Agencies 553 Licensed Intermediaries Tele Sales 7.2% İşbank Agency 10.6% (Branch+DS
Slide 32: Deep Bench with Lots of Talent
Anadolu Hayat Emeklilik Total Number Deep Bench with Lots of Talent of Employees: 1,041 Young & Energetic Educated Diverse 18-24 6% Primary Level 0.3% Female 61% 25-29 29% High School 3% Male 30-34 33% 39% University 89% 35-39 19% 40-44 8% Graduate 8% 45-49 3% 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-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jan-04 Jan-05 Jan-06 Jan-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 (TRY million) 20% 18% 17% 17% 17% 17% 16% 21% 20% 20% 19% 19% 19% 19% Market Share Market Share 16,000.00 1,200,000.00 1,120,399 1,103,875 1,126,957 13,687 1,026,593 14,000.00 11,366 10,834 863
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) 14% 12% 11% 11% 10% 10% 8% 7% 6% 7% 8% 9% 9% %8* 600.00 Market Share Market Share 500.6 450.00 500.00 395.0 402.1 420.4 400.00 400.00 367.0 394 364.7 341.1 350.00 329.3 Te
Slide 39: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Gross Profit for the Period (TRY million) Shareholders’ Equity and Capital Adequacy Ratio (TRY million) 433% 500% 553% 430% 408% 250.00 229.8 Capital Adequacy Ratio 210.7 1200 200.00 175.9 163.2 1000 877 150.00 134.8 800 789 710 105.7 99.0 620 600 100.00
Slide 40: Statutory Financials: Dividends
Anadolu Hayat Emeklilik Statutory Financials Net Distributable Profit / Dividend to Shareholders (TRY million) 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
Slide 41: Statutory Financials: Operating Expenses
Anadolu Hayat Emeklilik Statutory Financials Technical Profit / Operating Expenses (TRY million) Operating Expenses – 2017Q3 350.00 318.9 Commission 300.00 270.4 Expenses 256.3 241.7 39% 250.00 215.4 222.7 200.00 175.4 150.00 133.0 143.3 Administration 108.3 103.1 Expenses 100.00 67.5 20% 52.9 52.3
Slide 42: Summary of Income Statement
Anadolu Hayat Emeklilik Statutory Financials Summary of Income Statement (TRY million) 2012 2013 2014 2015 2016 CAGR 2016 Q3 2017 Q3 YOY Non-Life Technical Profit / Loss 0.01 0.02 -0.03 -0.24 -0.57 - -0.36 -0.39 8% Life Technical Profit / Loss 33.42 63.41 63.80 86.48 112.49 35% 82.22 95.43 16% Pensi
Slide 43: Pension Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Pension Technical Profit (TRY million) 2012 2013 2014 2015 2016 CAGR 2016 Q3 2017 Q3 YOY Pension Technical Income 139.03 132.00 166.57 209.06 236.76 14% 173.30 219.24 27% 1- Fund Management Income 88.47 90.76 113.57 144.26 173.82 18% 127.04 157.99 24% 2-
Slide 44: Life Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Life Technical Profit (TRY million) 2012 2013 2014 2015 2016 CAGR 2016 Q3 2017 Q3 YOY Life Technical Income 502.68 598.51 550.43 602.51 700.85 9% 434.49 521.66 20% 1- Earned Premiums (Net of Reinsurer Share) 346.81 382.88 353.32 391.78 475.43 8% 313.59 39
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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