51
April 2013 ANADOLU HAYAT EMEKLİLİK A.Ş. COMPANY PRESENTATION
April 2013
ANADOLU HAYAT EMEKLİLİK A.Ş.
COMPANY PRESENTATION
Contents
Corporate Profile
Lines of Business - Life & Pensions
Financials
2
Stock Data
Turkish Economy 2012
3
Population (End of 2011 ) 75.627.384
Urban Population (%) 77,3
Civil Employment (Age15+) 24.821.000
Unemployment Rate (%) 9,2
Gross Domestic Product-Current Prices (TL billion) 1.417
Gross Domestic Product (USD billion) 786
GDP Growth Rate (%) 2,24 GDP per Capita - Current Prices (USD) 10.504
Budget Deficit to GDP (%) 2,03
Current Deficit to GDP (%) 6,03
Consumer Price Index (%) 6,16 Producer Price Index (%) 2,45
Insurance Premium Income (TL billion) 19,83 Insurance Premium Income/GDP (%) 1,40
Source: Treasury and AIT
Anadolu Hayat Emeklilik
Corporate Profile
Established in 1990 as a subsidiary of Türkiye İş Bankası
First life insurance company in Turkey
The only Life & Pension company publicly traded since 2000
Has been operating in pension business since 27.10.2003
Market leader in life insurance and private pension business
4
Anadolu Hayat Emeklilik
Ownership Structure
5
INSURANCE SECTOR IN TURKEY
Total Number of Companies - 31.12.2012
Source: AIT
Insurance Companies 59
- Non-Life 35
- Life 7
- Life & Pension 17
Reinsurance Companies 1
6
INSURANCE SECTOR IN TURKEY Premium Productions
Source: Treasury & AIT
7
2012*
Total Premium Per Capita (USD) 146
Non-Life Premium Per Capita (USD) 126
Life Premium Per Capita (USD) 20
Total Premium Production (Billion USD) 11,1
Total Premium Production / GDP 1,4%
* Temporary
PRIVATE PENSION SYSTEM IN TURKEY Contributions as of 31.12.2012*
Total Pension Fund System Contributions Per Capita (USD)
119
Total Pension Fund System Contributions (Billion USD) 9,0
Total Pension Fund System Contributions / GDP 1%
Source: Treasury & Pension Monitoring Center
8
* Temporary
Anadolu Hayat Emeklilik
Growth Strategy
Distribution Channel Strategy
• Focus on Bancassurance
• Expanding Direct Sales Team
• Improve agency profile
Improve Customer Service Quality
Improve HR quality
Focus on Corporate Pension Business
9
Corporate Profile
Lines of Business - Life & Pensions
Financials
10
Stock Data
Anadolu Hayat Emeklilik
Lines of Business
Private Pension
Individual
Corporate
Life Insurance
Endowment / Permanent Life
Term Life
Annuities
Unemployment
Critical illness
11
PRIVATE PENSION SYSTEM IN TURKEY Basic Features Started on 27.10.2003
17 Licensed pension companies
Third pillar system
Defined contribution
Voluntary participation
Incentives for both participant & employer
Fully funded system
Minimum 10 years of contribution payment
Minimum retirement age is 56
Funds are managed by asset management companies
Separate pension accounts for each participant
Participants have the right to;
Switch funds or pension plans
Transfer accounts between pension companies
Merge their separate pension accounts at retirement
Cease contribution payments
Leave anytime
12
PRIVATE PENSION SYSTEM IN TURKEY Tax Incentives – Former Regulation
Contribution Stage
• Contributions are tax deductible up to %10 of income with a cap of annual minimum wage.
• Employer contributions are also tax deductible subject to the same limits.
Investment Stage
• Investment income of pension funds are tax exempt.
• No stamp tax in setting up pension funds.
• No tax on transactions in pension system.
Benefit payments
• %25 of retirement payments are exempt from income tax.
• Residual is subject to a witholding tax of 5%.
• Early surrenders are subject to 15% or 10% (in case of completion of 10 yrs within the system) withholding tax with no exemption.
13
PRIVATE PENSION SYSTEM IN TURKEY New Regulation – What Is New?
14
1. Totally different tax advantage structure for the participants (enforcement date: 01.01.2013): An additional pension account will be opened in the name of each participant, called ‘Government Contribution
Sub-account’.
Government will install an amount equal to 25% of each contribution made by the participant, with a cap of 25%
of annual minimum wage.
Vesting Period: Participants will earn %15 of this additional account if they complete 3 years within the system,
35% of the additional account if they complete 6 years within the system, 60% of the additional account if they
complete 10 years within the system, and 100% of the additional account if they complete 10 years within the
system and complete 56 years of age.
To avoid abuse of right, government will not make contribution payments until 31.12.2014, for the participants
who withholds any of his/her accounts after 29.05.2012.
1. Withholding tax will be applied only on the investment income (enforcement date: 29.08.2012).
2. Real estate and precious metal based pension funds will be established after the announcement of
processing complementary regulations.
3. After completing the initial two years in the system, participants will be able to change their pension
companies once a year.
4. To increase participant satisfaction, government decreased ‘Fund Management’ and ‘Management’
fees (enforcement date: 01.01.2013).
Private Pension System In Turkey
15
Anadolu Hayat Emeklilik
Distribution Network
Bancassurance
Direct Sales
Agents & Brokers
Other
334 Licensed Salesperson
257 Exclusive Agencies
59 Brokers
Internet
Call Centre
1264 Branches 336 Branches 136 Branches
87 Branches 2 Branches
16
Total of
5 Banks &
1825
Branches
Anadolu Hayat Emeklilik
Pension Production By Channel
17
2013/03
2011 2012 2013/3
Direct to Customer 10% 9% 7%
Broker 2% 1% 1%
Agency 13% 12% 13%
BANCASSURANCE 75% 78% 79%
Is Bank 3% 2% 2%
Is Bank + Direct
Sales 42% 50% 50%
Is Bank + Agency 13% 12% 12%
HSBC 15% 12% 13%
Albaraka 1% 1% 1%
Anadolubank 1% 1% 1%
Total 100% 100% 100%
Key Drivers For Growth In Pension Business
• Structural reforms
• Extended maturities
• Purchasing power
• Lack of confidence in the social security system
Economic Improvements
in Turkey
• Incentives
• Transparent system
• Participating to the investment process
• Mobility of the pension accounts
Advantages of Pension System
18
Key Drivers For Our Market Leadership
Distribution network
Diversified products
Fund performance
Charging structure
Service quality
19
20
Private Pension System In Turkey Overview as of 30.04.2013
Pension System Outlook
21
31.12.09
2010 %
Change 31.12.10
2011 %
Change 31.12.11
2012 %
Change 31.12.12
2013 %
Change 30.04.13
Fund Size (Million TL)
AHE 1.953 34% 2.620 16% 3.031 41% 4.278 9% 4.646
Sector 9.106 32% 12.017 19% 14.341 42% 20.357 12% 22.796
Market
Share 21,4% 21,8% 21,1% 21,0% 20,4%
Number of Participants (Thousand )
AHE 438 15% 503 15% 576 9% 628 7% 673
Sector 1.988 14% 2.274 16% 2.642 18% 3.119 14% 3.541
Market
Share 22,0% 22,1% 21,8% 20,1% 19,0%
22
Private Pension System In Turkey Overview as of 30.04.2013
Private Pension System In Turkey Lapse Ratio: Sector Average vs. Anadolu Hayat Emeklilik
23
Source: Pension Monitoring Center
01.01.2004 - 30.04.2013, Weekly Data
AHE Pension Products Fund Menu As of 30.04.2013
Conservative Balanced Aggressive
Cash Fund
Conservative Fund
Bond Fund
51 % 19 % 30 %
24
International Mixed Fund
Eurobond $/€ Fund
Alternative Balanced F.
Balanced Fund
Equity Fund
Agressive Fund
BRIC Fund
Pension Funds & Mutual Funds
25
Source: Capital Markets Board of Turkey
Fund Average
Maturity
Net Asset Value
Equity (%)
T-Bills &
G. Bonds Reverse
Repo (%)
Money
Market Foreign
Currency
Sec.(%)
T.Deposits
& Inst.
Type (mio TL) (%) (%) Other (%)
PRIVATE PENSION FUNDS
02.01.2013 645 20.358 15,96 58,04 8,15 0,72 0,56 16,57
02.05.2013 742 22.797 15,33 59,44 6,51 0,65 0,50 17,57
MUTUAL FUNDS – BANKS & Others
02.01.2013 108 30.688 4,88 19,98 37,98 7,65 0,46 29,05
02.05.2013 177 33.153 6,23 18,37 33,37 9,53 0,58 31,93
Pension Funds
Net Asset Values as of 30.04.2013
26
Pension Funds
Weighted Average Returns as of 30.04.2013
27
Anadolu Hayat Emeklilik Pension Funds’ Weighted Average Return Performance
28
Weighted Average Returns (%)
%
Pension Products Charging Structure – What Is New ?
Entrance Fee
• At the phase of entrance to the System for each pension account
• Can be deferred till the leaving date or can be collected by installments
• Max. Limit: ½ of gross monthly minimum wage
• By 01.01.2013; •Can be charged only once for
the first account of the participant.
•Can be deferred for a maximum of 10 years, depending on the vesting period
•Max.%10 of the entrance fee can be collected in advance
•Max. Limit: Gross monthly minimum wage
Management Fee
• To cover administrative expenses
• On contributions
• Legal upper limit: 8 %
• By 01.01.2013; •To cover administrative
expenses
•On contributions
• Legal upper limit: 2 %
•Extra management fee can be charged in case of ceasing contribution payments
Fund Management Fee
• To cover fund management expenses
• On NAV of each fund
• Legal upper limit: 1/10,000 (daily) ≈ 3,65% (annual)
• By 01.01.2013; •To cover fund management
expenses
•Defined as “Total Fund Charges” including “Fund Management Fee”
•On NAV of each fund
•Depending on the risk categories of funds, legal upper limits for total fund charges are:
•1,09% (annual) for liquid/cash funds
•1,91% (annual) for conservative funds
•2,28% (annual) for actively managed and equity funds
29
Life Insurance In Turkey Market Shares (Top 7 in Premium Production)
30
* Temporary
Life Insurance In Turkey Market Shares (Mathematical Reserves)
31
2011 2012*
% (Mio TL) % (Mio TL)
AHE 36% 2.025 36% 1.966
XXX 11% 612 12% 669
XXX 10% 549 9% 507
XXX 8% 463 8% 441
XXX 7% 416 7% 379
XXX 5% 285 6% 313
Others 22% 1202 22% 1215
TOTAL 100% 5.553 100% 5.490
* Temporary
Anadolu Hayat Emeklilik Profit Sharing Rates – TL Based Life Products
32
Anadolu Hayat Emeklilik - Life Portfolio Total Number of Policies – 2010 - 2012
33
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
1.800.000
Endowment Annuity Term Life Total
2010 78.484 37.900 969.650 1.086.034
2011 71.751 34.895 1.212.988 1.319.634
2012 62.878 31.524 1.523.567 1.617.969
Nu
mb
er
of
Po
licie
s
Life Portfolio - Number of Policies - 2010 - 2012
Anadolu Hayat Emeklilik - Life Portfolio Total Number of Policies – 2012/3 vs. 2013/3
34
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
1.800.000
Endowment Annuity Term Life Total
2012/3 70.247 33.610 1.270.734 1.374.591
2013/3 59.629 30.809 1.616.203 1.706.641
Nu
mb
er
of
Po
licie
s
Life Portfolio - 2012/03 vs 2013/03
Anadolu Hayat Emeklilik - Life Portfolio Total Premium Production (TL) – 2010 - 2012
35
-
50.000.000
100.000.000
150.000.000
200.000.000
250.000.000
300.000.000
350.000.000
400.000.000
Endowment Annuity Term Life Total
2010 167.603.927 133.978.008 55.770.129 357.352.064
2011 148.372.086 112.612.907 86.618.298 347.603.291
2012 138.076.009 75.674.732 153.306.697 367.057.439
Pre
miu
m P
rod
uct
ion
Life Portfolio - Total Premium Production (TL)
Anadolu Hayat Emeklilik - Life Portfolio Total Premium Production (TL) – 2012/3 vs 2013/3
36
0
20.000.000
40.000.000
60.000.000
80.000.000
100.000.000
120.000.000
Endowment Annuity Term Life Total
2012/3 35.134.455 16.722.457 30.491.081 82.347.994
2013/3 30.930.242 31.041.145 41.809.621 103.781.008
Pre
miu
m P
rod
uct
ion
Life Portfolio - Total Premium Production 2012/3 vs 2013/3
Anadolu Hayat Emeklilik - Life Portfolio Premium Production – New Business (TL) - 2010 - 2012
37
0
50.000.000
100.000.000
150.000.000
200.000.000
250.000.000
Endowment Annuity Term Life Total
2010 8.243.868 133.978.008 55.819.062 198.040.938
2011 8.697.335 112.612.907 86.964.638 208.274.880
2012 4.215.549 75.674.732 151.171.361 231.061.642
Pre
miu
m P
rod
uct
ion
- T
L
Life Portfolio - New Business - 2010 - 2012
Anadolu Hayat Emeklilik - Life Portfolio Premium Production – New Business (TL) – 2012/3 – 2013/3
38
0
10.000.000
20.000.000
30.000.000
40.000.000
50.000.000
60.000.000
70.000.000
80.000.000
Endowment Annuity Term Life Total
2012/3 1.258.465 16.722.457 30.056.709 48.037.630
2013/3 660.357 31.041.145 40.814.060 72.515.562
Pre
miu
m P
rod
uct
ion
- T
L
Life Portfolio - New Business - 2012/3 vs 2013/3
Anadolu Hayat Emeklilik
Life Production By Channel
39
2011 2012 2013/3
Agency & Broker 29% 18% 18%
Direct to Customer 27% 16% 27%
BANCASSURANCE 44% 66% 55%
Is Bank 36% 60% 51%
Is Bank & Direct Sales
& Agency 7% 5% 3%
HSBC 1% 1% 1%
Total 100% 100% 100%
2013/03
Life Products Charging Structure
Agency Commission
• Paid out to our distribution channels
• Charged on premiums
• No limits since 05.11.2007
Management Fee
• To cover administrative expenses
• Charged on premiums
• No limits
Fund Charge
• To cover fund management expenses
• Charged on current year’s returns
• Max. 15% of the returns
40
Corporate Profile
Lines of Business - Life & Pensions
Financials
41
Stock Data
Anadolu Hayat Emeklilik
Financial Highlights & Key Metrics
42
TL Million 2010 2011 2012 2013/3
Written Premium 358 348 367 104
General Technical Profit 27 34 53 12
Life Technical Profit 14 34 33 13
Private Pension Technical Profit 13 0 20 -1
Period Net Profit 71 65 80 24
Private Pension AUM 2.620 3.030 4.278 4.520
Math. & Profit Sharing Provisions 2.091 2.027 2.206 2.136
Shareholders' Equity 451 430 525 506
Paid-in Capital 250 300 300 300
Total Assets 5.299 5.648 7.222 7.409
Key Valuation Metrics 2010 2011 2012 2013/3
ROAE 16% 15% 17% 5%
Earnings Per Share 0,24 0,22 0,27 0,08
P/E 18,8 12,8 15,9 -
P/BV 3,0 1,9 2,4 3,6
ANHYT 2010 2011 2012 2013/4
Average Monthly Traded Volume (Million TL) 36,37 36,78 38,09 81,57
Anadolu Hayat Emeklilik
Dividend Payout
43
2009 2010* 2011* 2012*
Gross Profit (TL) 97.993.428 88.179.608 76.335.800 109.052.075**
Net Profit (TL) 79.284.428 72.744.608 62.920.800 82.952.075
Net Distributable Profit (TL) 75.661.865 69.176.772 59.687.324 78.873.301
Dividend to Shareholders (TL) 55.000.000 40.000.000 40.000.000 40.000.000
- Cash 55.000.000 40.000.000 40.000.000 40.000.000
- Bonus Share - -
Cash / Net Profit (%) 69,37 54,99 63,57 48,22
Cash / Net Distributable Profit (%) 72,69 57,82 67,02 50,71
Bonus Share / Net Profit (%) - - - -
Bonus Share / Net Distributable Profit (%) - - - -
Dividend to Shareholders / Net Profit (%) 69,37 54,99 63,57 48,22
Dividend to Shareholders / Net
Distributable Profit (%) 72,69 57,82 67,02 50,71
* Consolidated **Provision for dividend expense amounting to TRY 2,000,000 is added to the profit for the year end.
Anadolu Hayat Emeklilik
Capital Adequacy
44
31.12.2010
(TL)
31.12.2011
(TL)
31.12.2012
(TL)
Capital required for Non-Life Branch 178.239 186.997 196.369
Capital required for Life Branch 100.852.982 106.373.431 108.496.682
Capital Required for Pension Branch 8.424.900 9.450.175 12.569.576
TOTAL CAPITAL REQUIRED 109.456.121 116.010.603 121.262.627
TOTAL CAPITAL 450.645.954 430.162.083 524.679.792
EXCESS CAPITAL 341.189.833 314.151.480 403.417.165
Anadolu Hayat Emeklilik Income Statement
45
(mio TL) 2011 2012
TECHNICAL PART
NON-LIFE TECHNICAL INCOME 0,32 0,68
NON-LIFE TECHNICAL EXPENSES -0,33 -0,66
I - NON-LIFE TECHNICAL PROFIT / LOSS -0,01 0,02
LIFE TECHNICAL INCOME 563,17 502,67
LIFE TECHNICAL EXPENSES -528,72 -469,26
II- LIFE TECHNICAL PROFIT / LOSS 34,45 33,41
PENSION FUND TECHNICAL INCOME 113,85 139,03
PENSION FUND TECHNICAL EXPENSES -113,85 -119,53
III- PENSION FUND TECHNICAL PROFIT / LOSS - 19,50
IV- GENERAL TECHNICAL PROFIT / LOSS 34,44 52,93
INVESTMENT INCOME 57,22 63,51
INVESTMENT EXPENSES -7,60 -7,18
PROFIT FROM OTHER & EXTRAORDINARY ACTIVITIES -5,98 -3,58
V- COMPANY ASSETS PROFIT / LOSS 43,64 52,75
VI- PERIOD PROFIT / LOSS (IV+V) 78,08 105,68
VII- PROVISION FOR TAX & OTHER LEGAL LIABILITIES -13,41 -26,10
IX- PERIOD NET PROFIT / LOSS (VII - VIII) 64,67 79,58
Anadolu Hayat Emeklilik Income Statement
46
(mio TL) 2012 / 03 2013 / 03
TECHNICAL PART
NON-LIFE TECHNICAL INCOME 0,20 0,24
NON-LIFE TECHNICAL EXPENSES -0,02 -0,09
I - NON-LIFE TECHNICAL PROFIT / LOSS 0,18 0,15
LIFE TECHNICAL INCOME 104,87 140,51
LIFE TECHNICAL EXPENSES -100 -127,33
II- LIFE TECHNICAL PROFIT / LOSS 4,87 13,18
PENSION FUND TECHNICAL INCOME 31,85 29,89
PENSION FUND TECHNICAL EXPENSES -26,74 -30,95
III- PENSION FUND TECHNICAL PROFIT / LOSS 5,11 -1,06
IV- GENERAL TECHNICAL PROFIT / LOSS 10,16 12,27
INVESTMENT INCOME 21,67 22,60
INVESTMENT EXPENSES -2,57 -2,05
PROFIT FROM OTHER & EXTRAORDINARY ACTIVITIES -2,07 -4,72
V- COMPANY ASSETS PROFIT / LOSS 17,03 15,83
VI- PERIOD PROFIT / LOSS (IV+V) 27,19 28,10
VII- PROVISION FOR TAX & OTHER LEGAL LIABILITIES -5,71 -4,33
IX- PERIOD NET PROFIT / LOSS (VII - VIII) 21,48 23,77
Anadolu Hayat Emeklilik Balance Sheet
47
(mio TL) 2011 2012
ASSETS
I- LIQUID ASSETS 120 142
II- MARKETABLE SECURITIES 2.384 2.682
IIII- RECEIVABLES 3.098 4.350
IV- INVESTMENTS 9 9
V- FIXED ASSETS 24 26
VI- OTHER ASSETS (NET) 13 13
TOTAL ASSETS 5.648 7.222
LIABILITIES AND SHAREHOLDERS’ EQUITY
I- PAYABLES 3.106 4.378
II- TECHNICAL PROVISIONS 2.093 2.288
IIII- OTHER PROVISIONS 9 20
IV- TAX PROVISIONS 10 11
V- SHAREHOLDERS' EQUITY 430 525
TOTAL LIAB. AND SHAREHOLDERS’ EQUITY 5.648 7.222
Anadolu Hayat Emeklilik Balance Sheet
48
(mio TL) 2012 / 03 2013 / 03
ASSETS
I- LIQUID ASSETS 124 146
II- MARKETABLE SECURITIES 2.441 2.617
IIII- RECEIVABLES 3.485 4.591
IV- INVESTMENTS 9 9
V- FIXED ASSETS 24 27
VI- OTHER ASSETS (NET) 16 19
TOTAL ASSETS 6.099 7.409
LIABILITIES AND SHAREHOLDERS’ EQUITY
I- PAYABLES 3.543 4.652
II- TECHNICAL PROVISIONS 2.104 2.222
IIII- OTHER PROVISIONS 10 20
IV- TAX PROVISIONS 15 9
V- SHAREHOLDERS' EQUITY 427 506
TOTAL LIAB. AND SHAREHOLDERS’ EQUITY 6.099 7.409
Corporate Profile
Lines of Business - Life & Pensions
Financials
49
Stock Data
Anadolu Hayat Emeklilik Stock Data
50
Year MCAP(Million $)
2005 393
2006 447
2007 558
2008 180
2009 723
2010 798
2011 414
2012 693
2013 / 4 972
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Website:
www.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. can not guarantee the accuracy, completeness or correctness of such information. This document has been issued for information purposes only. The financial reports and statements announced by Anadolu Hayat Emeklilik A.Ş. to the public and relevant corporations are accepted to be the sole material. Anadolu Hayat Emeklilik A.Ş. does not accept any liability whatsoever for any direct or consequential loss arising from any use of this document or its contents due to the misleading information in this document. All estimations contained in this document are opinions of Anadolu Hayat Emeklilik A.Ş. and can be subject to change without notice. This document can not be interpreted as an advice to the investors and Anadolu Hayat Emeklilik A.Ş. can not be held responsible for the results of investment decisions made on account of this document. This document has been issued specially to the person, whom the document is concerned and may not be reproduced, distributed or shared with third parties for any purpose.
