Anadolu Hayat Emeklilik A.s. · BIST:ANHYT
Anadolu Hayat Emeklilik A.s — Investor Presentation (December 2016)
44 slides from Anadolu Hayat Emeklilik A.s's investor presentation, December 2016
Slide 1: Investor Presentation
Investor Presentation Istanbul, Turkey – December 2016
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 2000-2
Slide 5: Urgent Need to Increase Domestic Savings
Turkey at a Glance Urgent Need to Increase Domestic Savings 4% Current Account Balance (% of GDP) 1.250 Weight of Pension Funds in Household Savings (TRY billion)* 7% 2% 6% 0% 1.000 5% -2% 750 4% -4% -6% 3% 500 -8% 2% -10% 250 1% -12% 2011 2012 2013 2014 2015 0 0% 2011 2012 2013 2014 2015 2016 Euro
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% Fertility : 2.14 1.65 3% 2% Proportion of Elderly Population : 8.3% 20.8% 1% 0% 2016 2050 2016 October Decreasing fertility and increasing longevity
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 2016. 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% 6.6 Million 20.5 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 73% 17 69% 65% 65% 61% 14 55% 13 13 54% 10 10 51% 52% 9 45% 37% 39% 6 6 36% 5 4 2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015 Life Private Pension Paid-In Capital GWP The pension syst
Slide 16: Pillar III Private Pension System: Pension Funds
Our Markets Pillar III Private Pension System: Pension Funds Nominal & Real Investment Return of Pension Funds International Repo and Money Securities Market Instruments 2,4% 23,9% 23,3% 8,0% 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% 5,9% Equity 3,0% 3,0% 2,2% 1,3% 11
Slide 17: 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 : 6.6 Million (2015 total) Individual Participant Funds : 53.4 Billion TRY 75% State Contribution Funds : 7.4 Billion
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 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 PARTICIPANTS (4A&4C) 1 Million 3 Million (4a public sector) (4c public sector) Eligible Employees Social Security Participants (age less than 45)* (4a&4c) 13 Million 17 Million 13 Million (4a private sector) Social Security Par
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 per capita is only 1/20 Global Comparison (2015) of OECD average. Low penetration l
Slide 24: Life Insurance
Our Markets Life Insurance Life Insurance Total GWP Life Insurance GWP (TRY million) by Product Category 5.500,00 50% 4.968 40% 4.500,00 CAGR 17% 25% 30% 3.701 34% 3.500,00 3.350 3.229 20% 2.679 10% 15% 1% 2.500,00 -4% 0% -10% 1.500,00 -20% -30% 500,00 -40% -500,00 2012 2013 2014 2015 2016 -50% 2012
Slide 25: Corporate Profile
Anadolu Hayat Emeklilik Corporate Profile
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 13.1 Billion TRY 1.3 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 I Organization 11 District Sales Offices Branch Office in TRNC HQ and Regions : 525 Human II Resources Direct Sales Team : 523 Total : 1,048 Total Assets : 14,392 million TRY Financial Shareholders’ Equity : 861 million TRY III Metrics G
Slide 28: Financial Highlights
Anadolu Hayat Emeklilik Financial Highlights (Million TRY) 2015 2016 Change Total GWP and Net Contributions 1,736.8 1,859.3 7% Life Mathematical Reserves 1,700.2 1,682.4 -1% Key Financial Metrics 2015 2016 Pension AUM 8,933.6 11,359.4 27% ROAE 20% 23% Total Assets 11,889.2 14,391.7 21% Expense Ratio
Slide 29: 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 Bond Fund (HSBC) Eurobond € Fund Equity Fund
Slide 30: Distribution Network
Anadolu Hayat Emeklilik Distribution Network Private Pensions New Business Channel Mix (Contributions) – 2016 25 District Sales Offices 1,351 Branches 1,612 Licensed Intermediaries 84 Licensed Tele-Sales Agents 280 Agencies 564 Licensed Intermediaries Tele Sales İşbank 9% (Branch+DS+TS) 86% Agency 1
Slide 31: Deep Bench with Lots of Talent
Anadolu Hayat Emeklilik Total Number Deep Bench with Lots of Talent of Employees: 1,048 Young & Energetic Educated Diverse 18-24 4% Primary Level 1% Female 59% 25-29 33% High School 4% Male 30-34 34% 41% University 87% 35-39 18% 40-44 6% Graduate 8% 45-49 4% 50+ 1%
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: Strong Infrastructure
Anadolu Hayat Emeklilik Strong Infrastructure Digital Corporate Identity Core System (AHEŞUBE, AHEMOBİL, AHEPAD) Transformation Project Financial Systems Transformation (GL / FAH) Started in 2012. Private pension migration scheduled in early 2017 and life Integrated BI and insurance migration Report
Slide 34: Focus on Customer Retention
Anadolu Hayat Emeklilik Focus on Customer Retention Continuity Index (%) 100 99 98 97 Jul-12 Jul-04 Jul-05 Jul-06 Jan-07 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-13 Jul-14 Jul-15 Jul-16 Jan-04 Jan-05 Jan-06 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Oct-03 Apr-04 Oct-04 Apr-05 Oct-
Slide 35: A Strong Brand Name
Anadolu Hayat Emeklilik A Strong Brand Name Turkey’s most admired Turkey’s best life Awarded by Middle East private pension company * insurance company Insurance Forum (MEIF) -5th time- - 2nd time - as the best performing insurance company in Levant region ** 14 Marketing Awards Received in 2015 Ana
Slide 36: 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% 21% 20% 20% 19% 19% Market Share Market Share 12.000,00 11.366 1.200.000,00 1.120.399 1.026.593 10.000,00 8.945 863.365 1.000.000,00 7.394 733.137 8.000,00 800.000
Slide 37: 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% 7% 6% 7% 8% 9% Market Share Market Share 600,00 450,00 500,6 395,0 400,00 500,00 394 402,1 350,00 367,0 364,7 259,0 400,00 300,00 250,00 300,00 186,2 198,2 153
Slide 38: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Gross Profit for the Period (mio TRY) Shareholders’ Equity and Solvency Ratio (mio TRY) 371% 433% 500% 553% 430% Solvency Ratio 1200 250,00 229,8 1000 200,00 175,9 800 789 710 150,00 134,8 620 600 105,7 99,0 525 100,00 400 430 50,00 200 116 121 124 128 18
Slide 39: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Net Distributable Profit / Dividend to Shareholders (mio TRY) Dividend Payout Ratio (%) 160 142 140 70 120 67 67 100 61 100 90 79 82 80 51 60 60 60 50 40 40 40 20 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Net Distributable Profit Dividend to Sha
Slide 40: Statutory Financials
Anadolu Hayat Emeklilik Statutory Financials Technical Profit / Operating Expenses (mio TRY) Operating Expenses – 2016 350,00 318,9 Product 300,00 270,4 Commission 250,00 241,7 41% 215,4 200,00 175,4 150,00 133,0 Administration 108,3 18% 100,00 Employee 67,5 Benefit 52,9 52,3 50,00 32% 0,00 2012 201
Slide 41: Summary of Income Statement
Anadolu Hayat Emeklilik Statutory Financials Summary of Income Statement (mio TRY) 2012 2013 2014 2015 2016 CAGR YOY Non-Life Technical Profit / Loss 0.01 0.02 -0.03 -0.24 -0.57 - - Life Technical Profit / Loss 33.42 63.41 63.80 86.48 112.49 35% 30% Pension Technical Profit / Loss 19.50 -11.14 3.69
Slide 42: Pension Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Pension Technical Profit (mio TRY) 2012 2013 2014 2015 2016 CAGR YOY Pension Technical Income 139.03 132.00 166.57 209.06 236.76 14% 13% 1- Fund Management Income 88.47 90.76 113.57 144.26 173.82 18% 20% 2- Management Fee 33.95 17.77 21.58 26.38 21.20 -11
Slide 43: Life Technical Profit
Anadolu Hayat Emeklilik Statutory Financials Life Technical Profit (mio TRY) 2012 2013 2014 2015 2016 CAGR YOY Life Technical Income 502.68 598.51 550.43 602.51 700.85 9% 16% 1- Earned Premiums (Net of Reinsurer Share) 346.81 382.88 353.32 391.78 475.43 8% 21% 2- Investment Income 149.64 206.89 188.
Slide 44: 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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