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Investor PresentationIstanbul, Turkey – March 2017
2
Agenda
1. Turkey at a Glance
2. Our Markets
• Private Pension System
• Life Insurance
3. Corporate Profile
4. Financial Results
Turkey at a Glance
4
Turkey at a GlanceA Fast Growing Economy
0%
1%
2%
3%
4%
5%
6%
1990-1999 2000-2009 2010-2016
GDP Average Annual Growth*
Turkey OECD Euro-15
Source: *OECD National Accounts Data, **IMF, ***Turkish Statistics Institute, ****World Bank National Accounts Data
Over the last decade and half, Turkey
successfully stabilized its macro economy.
After the 1999–2001 economic crises, Turkey
maintained a highly successful policy of
macroeconomic stabilization.
-5%
-4%
-3%
-2%
-1%
0%
2011 2012 2013 2014 2015 2016
Budget Balance (% of GDP)**
Euro Area EM Turkey
0%
10%
20%
30%
40%
50%
60%
70%
80% CPI*** and Interest Rates****
CPI Interest Rates
5
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
2011 2012 2013 2014 2015 2016
Current Account Balance (% of GDP)*
Euro Area EM Turkey
Turkey at a GlanceUrgent Need to Increase Domestic Savings
* 2016 figures are IMF estimates
** All data represents 3rd quarter figures, except for 2012 which shows the year-end figures
Source: *IMF and **CBT Financial Stability Report
0%
1%
2%
3%
4%
5%
6%
7%
0
250
500
750
1,000
1,250
2011 2012 2013 2014 2015 2016
Weight of Pension Funds in Household Savings (TRY billion)**
Pension Funds Total Household Savings Weight of Pension Funds
Republic of Turkey – Medium Term Programme
Article 81: “Charging ratio will be converged
to international levels in the private pension
system and “auto enrolment system” will be
implemented. Life insurance and long-term
(over one year) private health insurance will
be developed.”
Medium Term Programme (2016-2018), prepared by Ministry
of Development was adopted by Cabinet Decree No.
2015/8355, 29.12.2015 and published in Official Gazette No.
29590, 11.01.2016.
10%
15%
20%
25%
30%
35%
2011 2012 2013 2014 2015 2016
Domestic Saving Rate (% of GDP)*
Euro Area EM Turkey
6
Turkey at a GlanceDemographic Opportunity Window
2016 2050
Population (millions) : 79.8 93.5
Median Age : 31,4 43
Fertility : 2.14 1.65
Proportion of Elderly Population : 8.3% 20.8%
2017
January
Population 15 Years And Over (thousands) : 59,493
Labor Force (thousands) : 30,658
Employed (thousands) : 26,672
Labor Force Participation Rate : 51.5%
Unemployment Rate : 13.0%
Non-Agricultural Unemployment Rate : 15.2%
Source: Turkish Statistics Institute – The World Bank - IMF
Decreasing fertility and increasing longevity means a demographic transition.
• 48 percent of the population is under 30 years old.
• Only 8 percent of the population is over 64 years old.
• The youth dependency ratio is relatively high.
• More people are living off retirement savings, thus a decrease in the saving rate
is a common issue.
• In the interim period when the youth dependency ratio is falling fast and the old-
age dependency ratio is only increasing modestly; larger potential labor force and
higher private saving to fund investment is a major demoghraphic advantage.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Population By Age
2016 2050
Our Markets
Private Pension System
Life Insurance
8
Our MarketsPrivate Pension System: Positioned in Pillar III
Three-Pillar System
Pillar I
State Pension
Mandatory
Securing a minimum
standard of living
Retirement, health,
disability and
unemployment
Pillar II
Occupational
Pension
Workplace Pensions
with Auto Enrolment
started in 2017
Maintenance of
current living
standards in terms of
replacement rate
Pillar III
Private Pension
Voluntary
Opportunity to
increase retirement
income
Available since 2003
9
Our MarketsPillar III Private Pension System: Important Features
Defined contribution and
voluntary participation.
Funds are managed by
asset companies.
Minimum retirement age: 56
Completion of 10 years.
Started in 2003.
18 companies in 2017.
Participants can switch funds,
pension plans and transfer
between companies.
Incentives for both
participant and employer.
10
Pillar III Private Pension System: Well Designed Structure
Pension
Monitoring Center
(EGM)
ISE Settlement
and Custody
Bank
(Takasbank)
Capital Markets
Board (SPK)
Undersecretariat
of Treasury
Ministry of Labor
and Social
Security
Ministry of
Finance
Pension
Accounts
Administered by
Pension
Companies
Pension Funds
Managed by
Asset
Management
Companies
Our Markets
Regulation Administration Monitoring
11
Our MarketsPillar III Private Pension System: Incentives
For Participants For Employers
• Contributions with a cap of
annual legal minimum wage is
subject to 25% state
contribution.
• Vesting Period:
% 15 at the end of 3 years
% 35 at the end of 6 years
% 60 at the end of 10 years
% 100 at retirement date or
death/disability cases
• Investment income of
pension funds are tax
exempt.
• Transaction of pension
funds are exempt of fees
and taxes.
• Withholding tax applies only
on the investment income:
5% (completion of 10 years in
the system & 56 years of age)
10% (completion of 10 years in
the system)
15% (early leave, before
completion of 10 years in the
system)
Contribution Stage Investment Stage Benefit Payments Employer contributions are
tax deductible up to 15% of
gross salary with a cap of
annual legal minimum wage.
12
Our MarketsPillar 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
monthly legal minimum wage
• Applicable for the first 5 years of
the contract.
• One common cap for entrance fee
and management fee.
Fund Management Fees
• Money market funds: 1.09%
• Fixed income & index funds: 1.91%
• Equity and managed funds: 2.28%
• State contribution funds: 0.36%
Rebate Structure
• Beginning with 2.5% by the 6th
year of the contract.
• 2.5% gradual increase each year.
• Maximum 25% after the 15th year.
• Rebate is not applicable below
1.1% of pension assets.
13
Our MarketsPillar III Private Pension System: Growth Accelerated with Increased Government Support
Und
er
Dis
cu
ssio
n
Imp
lem
ente
d
• 25% State Contribution since 2013
• Withholding tax limited to capital
gains
• Pension fund transfers from
provident funds* by the end of 2017
• Fee Structure Efficiency
• Auto-Enrolment starting in 2017
• Severance Payments
* Funds from associations, foundations, provident funds and other organizations with retirement provisions.
Source: Pension Monitoring Center as of 31.03.2017
0
10
20
30
40
50
60
70
2009 2010 2011 2012 2013 2014 2015 2016 2017Q1
AUM State Contribution
Pension AUM Growth(TRY billion)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2009 2010 2011 2012 2013 2014 2015 2016 2017Q1
Number of Participants(Thousands)
14
Our MarketsPillar III Private Pension System: Big Growth Potential
123.6%
49.5%
5.5%
0% 25% 50% 75% 100% 125% 150% 175% 200%
Netherlands
United States
Weighted average
United Kingdom
Finland
Ireland
Simple Average
Japan
Spain
Portugal
Slovak Republic
Poland
Slovenia
Germany
Austria
Belgium
Turkey
Hungary
Pension Funds as a Percentage of GDP
Turkey
OECD Simple Average
OECD Weighted Average
Big Growth Potential
The Turkish pension market has a very low level of GDP
penetration compared to other countries with similar GDP
per capita.
This illustrates a huge growth potential when combined
with the demographic opportunity window.
Pension Participants
6.7 MillionSocial Security Participants
21.1 Million
Work Force
30.7 Million
Working-Age Population
59.5 MillionTotal Population
79.8 Million
Source: OECD; Turkish Statistics Institute as of 31.01.2017, Social Security Institution as of 31.12.2016;
Pension Monitoring Center as of 31.03.2017
15
Our MarketsAttractive Market
10 109
6 65
4
13 1314
1718
19 19
2009 2010 2011 2012 2013 2014 2015
Life Private Pension
The Number of Companies*
55%61%
73% 74%69%
65% 65%
51%
36% 37% 39%
45%
52%54%
2009 2010 2011 2012 2013 2014 2015
Paid-In Capital GWP
Foreign Investment Share
The pension system started with 11 companies in 2003.
Due to strong growth expectations and government support,
the system attracted more local and international groups.
Source: Treasury, Insurance and Private Pensions Annual Reports, 2015
* Active companies
16
Our MarketsPillar III Private Pension System: Pension Funds
Equity10.9%
Repo and Money Market Instruments
7.7%
International Securities
2.9%
Government Bonds51.2%
Corporate Bonds10.1%
Time Deposits17.2%
Asset Allocation of Pension Funds
Number of Funds : 287
Total AUM : 65.3 Billion TRY
Return on Pension Funds (2004-2017Q1)
Nominal : 364.7%
Real : 58.5%
23.9%
19.6%
11.1%
18.4%
9.5%
23.3%
9.6%
0.1%
17.9%
-0.2%
14.5%
3.0%
10.9%
4.6%
13.3%11.0%
1.3%
9.2%
-0.5%
15.8%
3.0%
-9.4%
11.0%
-7.1%
5.9%
-5.4%
2.2%0.3%
Nominal & Real Investment Return of Pension Funds
Nominal Return Real Return
As of 31.03.2017
17
Our MarketsPillar III Private Pension System: Key Highlights
Key Figures
Participants : 6.7 Million
Participant Funds : 57.1 Billion TRY
State Contribution Funds : 8.2 Billion TRY
Assets Under Management : 65.3 Billion TRY
Intermediaries : 40,698
Pension Companies : 18
Pension Funds : 287
6.0%
29.3%
33.9%
22.5%
8.2%
0-25 25-34 35-44 45-55 56+
Participant Age Distribution
Individual75%
Non-Sponsored
Groups21%Employer Sponsored
Groups 4%
Contributions Total Amount by
Contract Type
Bank73%
Other2%
Direct Sales9%
Corporate Sales4%
Agent12%
Distribution of Contributions
by Marketing Channel(2015 total)
1,000
1,500
2,000
2,500
3,000
2008 2009 2010 2011 2012 2013 2014 2015
Average of Total Amount of Regular Contributions per Year (TRY)
Source: Pension Monitoring Center
As of 31.03.2017
18
Our MarketsPrivate Pension System: New Frontiers
Auto
Enrolment
Severance
Payments
Simplification
of Fund
Choices
19
Our MarketsAuto Enrolment: Basic Features*
Automatic
enrolment of
current and new
employees under
age 45
Gradual
implementation
based on
company
scale
Minimum
contribution
amount
set as
%3 of
monthly
wage
State contribution:• 25% on contributions
• 1,000 TRY initial bonus
• 5% of assets at
annuity phase
Simplified
fund menu
Simplified and
automated
enrolment and
collection
process
2 months of call
back period.
Voluntary opt-out
at any time
Law enacted
in August 2016;
in force by 2017.
Structural changes
in marketing, sales
and service model
SME & Corporate
* Based on the Law enacted in August 2016 and the complementary legislation.
Automatic re-
enrolment of
employees
that
withdraw
or leave the system
in every two years
20
Our MarketsAuto Enrolment System: Incentives
For Participants
• Contributions with a cap of annual legal
minimum wage is subject to 25% state
contribution. This limit is set independently
of Pillar III contracts.
• Initial 1,000 TRY bonus if the employee
stays in the system.
• Vesting Period For State Contribution
% 15 at the end of 3 years
% 35 at the end of 6 years
% 60 at the end of 10 years
% 100 at retirement date or death/disability
cases
• State contributions are booked in a separate
account as a commitment and will be
subject to revaluation indexed to CPI. The
accrued amounts will be funded gradually
according to the vesting schedule.
• Investment income of auto enrolment funds
are tax exempt.
• Additional state contribution equal to 5% of
savings at retirement date is provided in
case of transfer into an annuity contract with
a minimum term of ten years.
Contribution Stage Investment Stage Retirement Stage
21
Our MarketsAuto 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
August 2016, no management or
entrance fee is allowed in Auto
Enrolment System.
Fund Management Fee is capped at
a maximum of 0.85%.
22
Our MarketsAuto Enrolment - New Target Market
DatePrivate
Sector
Public
Sector
Number of
Employees***%
2017 January 1,000+ - 2.2 Million 15
2017 April 250 – 999 Public administrations 4.0 Million 28
2017 July 100 – 249 - 1.5 Million 11
2018 January 50 – 99Public enterprises +
local administrations1.3 Million 9
2018 July 10 – 49 - 2.7 Million 19
2019 January 5 - 9 - 2.5 Million 17
Total 14.2 Million 100
WORKFORCE*
* Social Security Institution, Turkish Statistics Institute, December 2016
** Estimated as 75% of the 4a and 4c participants *** Target market estimated by Undersecretariat of Treasury
Eligible Employees
(age less than 45)**
12.6 Million
Social Security Participants
(4a&4c)
16.8 Million
Social Security Participants
21.1 MillionEmployed
26.7 MillionWork Force
30.7 Million
3.0 Million (4c public sector)
12.7 Million(4a private sector)
1.1 Million (4a public sector)
SOCIAL SECURITY PARTICIPANTS (4A&4C)
Staging Process
Staging process defined in the complementary legislation
Public sector in 2017
Gradual staging for private sector beginning with large scale
companies (+1,000 employees)
23
Our MarketsAuto Enrolment – Market Preview
Market Size*
Number of Employees 669,126
Number of Certificates 671,823
Total Funds (TRY) 106,908,996
*Source: Pension Monitoring Center as of 31.03.2017
Staging Process
First phase of Auto Enrolment has been
completed.
The employees of private companies over 1,000
employees has been enrolled in one of auto
enrolment plans.
Date Target
2017 January Private companies with 1,000+ employees
2017 AprilPrivate companies with 250-999 employees
Public administrations
2017 July Private companies with 100-249 employees
2018 JanuaryPrivate companies with 50-99 employees
Public enterprises and local administrations
2018 July Private companies with 10-49 employees
2019 January Private companies with 5-9 employees
24
Our MarketsLife Insurance: Underpenetrated Market
17124 141
987
647
1,634
346276
621
Life Insurance Non Life Insurance Total Insurance
Turkey Euro Area World
Insurance Premium per Capita (USD)
Global Comparison (2015)
Source: Sigma, SwissRe
Country /
Region
Life GWP
(in % of GDP)
Share of World Market
(in %)
Turkey 0.2 0.05
Euro Area 4.2 34.4
OECD 4.2 78.1
World 3.5 100
Life insurance market has great potentials in Turkey.
Turkey’s life insurance market is extremely
underpenetrated as life premiums per capita is only 1/20
of OECD average.
Low penetration level - when combined with favorable
demographics and strong government support for saving
and annuity products - demonstrates high growth
potential.
25
Our MarketsLife Insurance
Life Insurance Total GWP(TRY million)
2,679
3,350 3,229
3,701
4,963
1,080
1,638
1%
25%
-4%
15%
34%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
-500.00
500.00
1,500.00
2,500.00
3,500.00
4,500.00
5,500.00
2012 2013 2014 2015 2016 2016Q12017Q1
Life Total GWP (million TRY) Growth Rate
2012 2013 2014 2015 2016
Term Life Endowment / Saving Annuity
CAGR 17%
Life Insurance GWPby Product Category
Life Insurance Market in Turkey is dominated by credit linked products.
Term life market is dependant on consumer loan cycles. To offset this dependancy there is an increasing emphasis on stand alone products.
The saving product market is under pressure of expanding private pension products.
Annuity market is in a regulatory transition phase. New generation products will be launched after legal framework is finalized.
Source: Insurance Association of Turkey, Life Insurance Information and Monitoring Center
Anadolu Hayat Emeklilik
Corporate Profile
27
Anadolu Hayat EmeklilikAt a Glance
Free Float15%
İşbank64% Anadolu
Sigorta20%
Milli Reasürans
1%
Ownership Structure
Established in 1990 as a subsidiary of İşbank
First life insurance company in Turkey
The first publicly traded Life & Pension Company since 2000
Operating in pension business since 2003
Strong market position in life insurance and private pension
businesses
Strong shareholder structure
Sector’s leader in total assets with 15.2 Billion TRY
SECTOR’S
LEADERLife and Private
Pension Funds
13.9 Billion TRY
SECTOR’S
LEADERPrivate Pension
Contracts
1.3 Million
28
Anadolu Hayat EmeklilikAt a Glance*
I OrganizationHeadquartered in Istanbul
11 District Sales Offices
Branch Office in TRNC
IIHuman
Resources
HQ and Regions :
Direct Sales Team :
Total :
523
516
1,039
IIIFinancial
Metrics
Total Assets :
Shareholders’ Equity :
Gross Profit :
Market Value :
15,170 million TRY
766 million TRY
63 million TRY
2,172 million TRY
IV Brand ValueHighest brand value in the sector
First remembered private pension company
Private Pension NPS 38 (sector benchmark 5)**
38% ***
VMarket
Position
Private Pension
Contracts :
Participants :
Assets Under Management :
#1 – 16%
#2 – 17%
#2 – 19%
Life Insurance
AUM (Mathematical Reserves) :
Gross Written Premium :
#1 – 29%
#3 – 9%
*As of 31.03.2017 **IPSOS ***TNS
29
Anadolu Hayat EmeklilikFinancial Highlights
* Q1 calculations are based on trailing five quarters’ data.
(Million TRY) 2015 2016 Change 2016Q1 2017Q1 Change
Total GWP and Net Contributions 1,736.8 1,859.3 7% 369.5 458.5 24%
Life Mathematical Reserves 1,700.2 1,682.4 -1% 1,665.8 1,703.1 2%
Pension AUM 8,933.6 11,359.4 27% 9,606.9 12,173.8 27%
Total Assets 11,889.2 14,391.7 21% 12,499.8 15,170.2 21%
Shareholders Equity 778.2 860.9 11% 738.7 766.3 4%
Total Technical Profit 108.5 133.0 23% 28.6 43.0 50%
Life 86.5 112.0 29% 22.1 31.2 41%
Private Pension 22.0 21.0 -5% 6.5 11.8 81%
Financial Income 87.5 123.4 41% 30.7 32.6 6%
Profit for the Period 175.8 229.8 31% 50.4 63.4 26%
Net Profit 145.1 190.3 31% 41.4 51.7 25%
Key Financial Metrics
ROAE* 20% 23%
Expense Ratio 15.6% 17.2%
P/E Ratio* 17.1 11.2
P/B Ratio 3.2 2.5
Earnings per Share* 0.35 0.44
21% 25%
18.5% 17.5%
15.0 10.8
3.1 2.8
0.37 0.47
30
Anadolu Hayat EmeklilikLines of Business
Private
Pension
Individual
Plans
Non-
Sponsored
Group Plans
Employer
Sponsored
Group Plans
Income
Drawdown
Plans
Life
InsuranceAnnuities Term Life
Savings &
Endowment
Personal
Accident
Insurance
Group
Accident
Insurance
Personal
Accident
Insurance
Low RiskMedium
Risk
High
Risk
Bond Fund
Bond Fund(HSBC)
Money Market Fund
ConservativeFund
Group Bond Fund
GroupConservativeFund
Standard Fund
State ContributionFund
Alternative StateContribution Fund
Initial Fund
Initial AlternativeFund
Eurobond $ Fund
Eurobond € Fund
International
Mixed Fund
Balanced Fund
Alternative Income
Fund
Dynamic Flexible
Fund
Private Sector
Bonds Fund
Group Mixed
Eurobond Fund
Gold Fund
Equity Fund
Equity Fund
(HSBC)
Aggressive Fund
BRIC Plus Fund
Group Equity
Fund
Isbank
Subsidiaries Fund
Lines of Business Pension Funds
Auto
Enrolment
Auto
Enrolment
Plans
31
Anadolu Hayat EmeklilikDistribution Network
25 District Sales Offices
1,373 Branches
1,819 Licensed Intermediaries
67 Licensed Tele-Sales Agents
11 District Sales Offices
Branch in Northern Cyprus
45 Regional Sales Managers
471 Direct Sales Team
276 Agencies
556 Licensed Intermediaries
108 Branches
3 Branches
1 Branch
Private Pensions New Business
Channel Mix (Contributions) – 2017Q1
(Branch+DS+TS)
84%
Tele Sales8%
Agency11%
Others5%
İşbank
Anadolu Hayat EmeklilikDeep Bench with Lots of Talent
Total Number
of Employees: 1,039
4%
33%
34%
18%
6%
4%
1%
18-24
25-29
30-34
35-39
40-44
45-49
50+
Young & Energetic
1%
4%
87%
8%
Primary Level
High School
University
Graduate
Educated
59%
41%
Female
Male
Diverse
33
Anadolu Hayat EmeklilikCorporate Strategy
Finance
Become the market leader among private
pension and life insurance companies
Customer
Optimize customer and product portfolio to
make the best use of sales potential
Process
Design cost oriented simple processes for
top-notch customer experience
Improvement
and Learning
Continuously develop business model and human
resources to become the leader in all arenas
Become both the private
pension and life insurance
market leader
Optimize operational
profitability and efficiency
Optimize ROE and risk
portfolio
Utilize the Bancassurance
channel in the most
effective way
Make the best use of up
and cross selling
opportunities
Extend quality customer
base
Develop integrated, agile
and solution focused
systems
Optimize acquisition and
service related costs by
digitalization
Become a superb service
provider
Differentiate through new
infrastructure and
business model
Execute sales-oriented
transformation
Become the first choice for
employees through high
performance teams
34
Anadolu Hayat EmeklilikStrong Infrastructure
Core System Transformation
Project
The first phase of the
transformation project to serve
private pension operations
established in February 2017
including a huge migration from
the old legacy system. Second
phase of the project covering life
insurance operations is scheduled
in 2017.
New IT infrastructure is flexible,
modular and state of the art which
will reduce reliance on IT
resources, reduce the time to
market for new products, gain
process efficiencies with
automation for a unique
customer experience, reduce
operational risk, increase the
ability to deal with
regulatory change.
CRM
Hardware Architecture
Transformation(Exadata)
Payment and Collection
Processes Module(Payment HUB)
Commission and
Intermediary Campaigns
Rule Engine
Mechanization of
Operational Processes
Digital Corporate Identity(AHEŞUBE, AHEMOBİL, AHEPAD)
Financial Systems
Transformation(GL / FAH)
Insurance Applications
Transformation
Integrated BI and
Reporting Platform(Atlas)
35
Anadolu Hayat EmeklilikFocus on Customer Retention
Lowest churn rate
in peer group• 0.7% monthly churn rate* (1.2%
sector average)
Extensive use of
CRM
• Campaign, lead and customer
complaints management, key
account management
Predictive
Modeling
• Churn risk ratios based warning
& action processes
• Customer profiling
• Offers based on customer
behaviors
VIP segment
focus
• Campaigns to raise regular and
additional contributions
• Automated collection warning
mechanisms.
Collections
Performance
• Key account management
• Consultancy through investment
managers
• Exclusive customer service on call
center
• Special customer loyalty programs
97
98
99
100
Oct-
03
Jan
-04
Ap
r-04
Jul-0
4
Oct-
04
Jan
-05
Ap
r-05
Jul-0
5
Oct-
05
Jan
-06
Ap
r-06
Jul-0
6
Oct-
06
Jan
-07
Ap
r-07
Jul-0
7
Oct-
07
Jan
-08
Ap
r-08
Jul-0
8
Oct-
08
Jan
-09
Ap
r-09
Jul-0
9
Oct-
09
Jan
-10
Ap
r-10
Jul-1
0
Oct-
10
Jan
-11
Ap
r-11
Jul-1
1
Oct-
11
Jan
-12
Ap
r-12
Jul-1
2
Oct-
12
Jan
-13
Ap
r-13
Jul-1
3
Oct-
13
Jan
-14
Ap
r-14
Jul-1
4
Oct-
14
Jan
-15
Ap
r-15
Jul-1
5
Oct-
15
Jan
-16
Ap
r-16
Jul-1
6
Oct-
16
Jan
-17
Continuity Index (%)
AHE System Sector Average
* Pension Monitoring Center data as of February 2017
36
Anadolu Hayat EmeklilikA Strong Brand Name
Turkey’s best life
insurance company
- 2nd time -
Turkey’s most admired
private pension company *
-5th time-
Awarded by Middle East
Insurance Forum (MEIF)
as the best performing
insurance company in
Levant region **
* «Turkey’s Most Admired Companies 2016» survey conducted by Capital Magazine.
** MEIF Awards takes into account key financial metrics and provides industry participants an objective peer-to-peer ranking.
Levant region: Turkey, Cyprus, Egypt, Iraq, Israel, Jordan, Palestine, Syria.
*** Voice of the Customer Survey carried out by Turkish Society for Quality and Ipsos in 2016
The life insurance and
private pension company
with the highest customer
loyalty in Turkey ***
37
Anadolu Hayat EmeklilikStrong Market Positioning in Private Pensions
629,123733,137
863,365
1,026,5931,120,399
1,058,2901,126,904
0.00
200,000.00
400,000.00
600,000.00
800,000.00
1,000,000.00
1,200,000.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
20% 18% 17% 17% 17%
Market Share
Participants
Technical Profit (mio TRY)
4,2785,243
7,394
8,945
11,366
9,620
12,185
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
14,000.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
21% 20% 20% 19% 19%
Market Share
Assets Under Management (mio TRY)
3,340
4,333
5,497
6,831
8,189
7,103
8,507
0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
Contributions (mio TRY)
Source: Pension Monitoring Center
21% 20% 19% 18% 18%
Market Share
19.5
-11.1
3.7
22.0 21.1
6.5
11.8
-15.00
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
17% 17% 19% 19%
18% 18%
38
367.0 394 364.7402.1
500.6
97.0140.8
0.00
100.00
200.00
300.00
400.00
500.00
600.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
Anadolu Hayat EmeklilikStrong Market Positioning in Life Insurance
14% 12% 11% 11% 10%
Market Share
Life Insurance GWP (mio TRY)
Technical Profit (mio TRY)
153.3186.2 198.2
259.0
395.0
71.6
114.0
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
7% 6% 7% 8% 9%
Market Share
Term Life GWP (mio TRY)
Mathematical
Reserves –
Life Insurance
Fund Size
Market Share
AHE29%
Others71%
Market
Leader with
1.7 bio TRY
AUM
Source: Insurance Association of Turkey , Life Insurance Information and Monitoring Center
33.4
63.4 63.8
86.5
112.5
22.231.2
0.00
20.00
40.00
60.00
80.00
100.00
120.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
9% 9% 7% %8
Term Life81%
Saving15%
Annuity4%
2017Q1
39
Anadolu Hayat EmeklilikStatutory Financials
105.7 99.0
134.8
175.9
229.8
50.463.4
0.00
50.00
100.00
150.00
200.00
250.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
52.9 52.3
67.5
108.3
133.0
28.6
42.9
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
Gross Profit for the Period (mio TRY)
Technical Profit (mio TRY)
121 124 128 184 215
525620
710
789
877
0
200
400
600
800
1000
1200
2012 2013 2014 2015 2016
Required Capital Total Capital
433% 500% 553% 430% 408%
Capital Adequacy Ratio
Shareholders’ Equity and Capital Adequacy Ratio (mio TRY)
2012 2013 2014 2015 2016
ROAE 17% 15% 16% 20% 23%
40
Anadolu Hayat EmeklilikStatutory Financials
Net Distributable Profit / Dividend to Shareholders (mio TRY) Dividend Payout Ratio (%)
79 8290
142
186
4050
60
100
140
0
20
40
60
80
100
120
140
160
180
200
2012 2013 2014 2015 2016
Net Distributable Profit Dividend to Shareholders
51
61
6770
75
2012 2013 2014 2015 2016
Cash Dividend / Net Distributable Profit (%)
0.13 0.14 0.16 0.24 0.33
Dividend per Share Gross (TRY)
41
Anadolu Hayat EmeklilikStatutory Financials
52.9 52.367.5
108.3
133.0
28.642.9
175.4
215.4
241.7
270.4
318.9
68.380.4
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
2012 2013 2014 2015 2016 2016Q1 2017Q1
Technical Profit Operating Expenses
Technical Profit / Operating Expenses (mio TRY)
MarketingExpenses
8%
Employee BenefitExpenses
33%
Commission Expenses
41%
Administration Expenses
18%
Operating Expenses – 2017 Q1
16.215.5 15.8 15.6
17.2
18.517.5
2012 2013 2014 2015 2016 2016Q1 2017Q1
Expense Ratio (%) (*)
(*) G&A Expenses / Contributions+GWP
42
Anadolu Hayat EmeklilikStatutory Financials
Summary of Income Statement
(mio TRY) 2012 2013 2014 2015 2016 CAGR 2016 Q1 2017 Q1 YOY
Non-Life Technical Profit / Loss 0.01 0.02 -0.03 -0.24 -0.57 - -0.17 0.01 -
Life Technical Profit / Loss 33.42 63.41 63.80 86.48 112.49 35% 22.24 31.16 40%
Pension Technical Profit / Loss 19.50 -11.14 3.69 22.02 21.09 2% 6.53 11.83 81%
General Technical Profit / Loss 52.93 52.29 67.46 108.26 133.01 26% 28.60 43.00 50%
Net Investment Income 56.33 48.39 69.61 72.07 101.88 16% 24.57 25.79 5%
Other Income/Expenses -3.58 -2.20 -2.30 -4.48 -5.09 9% -2.79 -5.43 94%
Profit Before Taxes 105.68 98.48 134.77 175.85 229.80 21% 50.38 63.36 26%
43
Anadolu Hayat EmeklilikStatutory Financials
Pension Technical Profit
(mio TRY) 2012 2013 2014 2015 2016 CAGR 2016 Q1 2017 Q1 YOY
Pension Technical Income 139.03 132.00 166.57 209.06 236.76 14% 55.22 65.55 19%
1- Fund Management Income 88.47 90.76 113.57 144.26 173.82 18% 39.62 49.20 24%
2- Management Fee 33.95 17.77 21.58 26.38 21.20 -11% 4.58 6.03 32%
3- Entrance Fee Income 16.12 20.24 26.13 32.05 37.08 23% 9.98 9.16 -8%
4- Other Technical Income 0.49 3.23 5.29 6.37 4.66 76% 1.04 1.16 12%
Pension Technical Expense -119.53 -143.14 -162.88 -187.04 -215.67 16% -48.69 -53.72 10%
1- Total Fund Expenses -15.07 -16.30 -16.99 -22.34 -24.57 13% -6.13 -7.32 19%
2- Operating Expenses -102.99 -125.96 -144.11 -157.26 -181.71 15% -40.75 -43.24 6%
3- Other Technical Expenses -1.47 -0.88 -1.78 -7.44 -9.39 59% -1.81 -3.16 75%
Pension Technical Profit 19.50 -11.14 3.69 22.02 21.09 2% 6.53 11.83 81%
44
Anadolu Hayat EmeklilikStatutory Financials
Life Technical Profit
(mio TRY) 2012 2013 2014 2015 2016 CAGR 2016 Q1 2017 Q1 YOY
Life Technical Income 502.68 598.51 550.43 602.51 700.85 9% 125.86 190.27 51%
1- Earned Premiums (Net of Reinsurer Share) 346.81 382.88 353.32 391.78 475.43 8% 91.71 132.13 44%
2- Investment Income 149.64 206.89 188.62 202.87 214.83 9% 32.34 55.90 73%
3- Other Technical Income 6.23 8.74 8.49 7.86 10.59 14% 1.81 2.24 24%
Life Technical Expense -469.26 -535.10 -486.63 -516.03 -588.36 6% -103.62 -159.11 54%
1- Incurred Losses (Net of Reinsurer Share) -454.75 -527.63 -542.81 -426.60 -448.86 -0,33% -143.23 -114.97 -20%
2- Change in Provision for Bonus and Discounts -0.26 0.13 -0.03 -0.15 -0.14 - -0.25 0.00 -
3- Change in Life Mathematical Provisions 59.54 83.43 155.52 26.54 2.27 - 68.20 -5.70 -
4- Change in Other Technical Reserves -1.71 -2.00 -2.19 -3.11 -4.96 - -0.88 -1.44 64%
5- Operating Expenses -72.08 -89.03 -97.12 -112.71 -136.67 17% -27.46 -37.00 35%
Life Technical Profit 33.42 63.41 63.80 86.48 112.49 35% 22.24 31.16 40%
Technical Margin
(Technical Profit / Earned Premiums)9.6% 16.6% 18.1% 22.1% 23.7% 24.3% 23.6%
45
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 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 cannot be
interpreted as an advice to the investors and Anadolu Hayat Emeklilik A.Ş. cannot 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
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