Presentation to Investors FY 2019 Earning Release February 2020
Historical Track Record of Value Creation CAGR 2016 2017 2018 2019 2015 2015-19 11.8 bTL 15.3 bTL 17.3 bTL 23.1 bTL 26% 9.2 bTL Pension AUM (inc AE) 42% 240 mTL 317 mTL 471 mTL 565 mTL 988 mTL Total GWP (Life+PA) 22% 250 mTL 288 mTL 378 mTL 472 mTL 553 mTL Total Technical Profit 50,1% 45,6% 13 pts 58,2% 55,8% 44,7% Expense Ratio (1) 105 mTL 145 mTL 201 mTL 241 mTL 40% 63 mTL Profit for the Period (IFRS) 15 pts 18,3% 26,8% 29,6% 34,3% 33,7% ROE (IFRS) 63 mTL 102 mTL 191 mTL 215 mTL 86% 18 mTL Profit for the Period (SFRS) 22 mTL 48 mTL 100 mTL 160 mTL 51% 31 mTL Dividend Payout TL (2) Note: (1) Expense ratio=(Opex-AE Related Expenses-Sales Expenses)/(Opex-AE Related Expenses-Sales Expenses+IFRS Proft Before Tax) « Opex=G&A+Financial Expense » (2) 2019 figure is Dividend proposal subject to General Assembly approval 2 AvivaSA: Şirkete Özel (Internal)
Solid Financial Foundations 2019 YoY /Δ AvivaSA continues to maintain its #1 position in terms of total AuM Pension AUM (inc AE) 23.1bTL 34% (#1 position in private pension and #1 position in private companies ’ AE) Focus on standalone products (ROP) and launch of long-term credit life product Total GWP (Life+PA) 988 mTL 75% helped to increase 75% YoY Total Technical Profit 553 mTL Steady increase resulting from high profitability in life and pension scalability 17% Expense Ratio (1) 44.7% The increase is mainly due to increase in sales commission expenses 0.9 pts In addition to increase in technical profit, financial income is strong with higher Profit for the Period (IFRS) 241 mTL 20% interest rates and bigger assets Strong profit combined with lean capital ROE (IFRS) 33.7% -0.6 pts Profit for the Period (SFRS) SFRS Profit growth is lower than IFRS due to increasing growth in top line 215 mTL 12% Dividend Proposal (2) Strong dividend growth in accordance with growth in SFRS profit and solvency ratio 160 mTL 60% Significant YoY growth achieved thanks to protection business VNB 423 mTL 81% Note: (1) Expense ratio=(Opex-AE Related Expenses-Sales Expenses)/(Opex-AE Related Expenses-Sales Expenses+IFRS Proft Before Tax ) « Opex=G&A+Financial Expense » (2) First installment (100 mTL) will be paid in March 2020, and second installment (60 mTL) will be paid in September 2020 subject to General Assembly approval 3 AvivaSA: Şirkete Özel (Internal)
A Story of Solid Profitable Growth Shareholders’ Equity and Solvency Ratio (TLm) Profit for the Period (TLm) Solvency Ratio CAGR: +27% 20% 139%* 150% 172% 193% 176% CAGR: +23% 804,7 30% 621,1 549,4 240,5 92,0 427,7 200,6 355,5 29,1 144,7 105,0 62,9 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 ( restated ) (restated) Steady increase in shareholders’ equity reflects active management of 2015 capitalization to fund business growth 2016 2017 2018 2019 (restated) ROE Capital- light business, which benefits from AvivaSA’s measured approach to risk 18%* 27% 30% 34% 34% and new product introduction *Before write-off RoE is 26%,Solvency ratio is 154% Additional ROP DAC impact is calculated beginning from 2015 and has been reflected on 2019 opening equity, amount of 8.3 m TL. Source: Company information. Note: Analysis on profitable growth derives from segmental information on this and following pages of the section, unless otherwise stated.. 4 AvivaSA: Şirkete Özel (Internal)
Business Lines 5
Differentiated Management of Trends & Dynamics per Segment Pension* Life Protection Personal Accident AUM – Inc. State contribution (TLm) Gross Written Premium (TLm) Gross Written Premium (TLm) FMC % (inc. State contribution) CAGR: 16% CAGR: 49% 9% 1,6 1,5 1,5 1,4 1,3 87% 896,4 82,4 CAGR: 26% 75,4 34% 68,8 23.133 17.300 52,1 480,2 45,7 15.325 392,6 11.792 9.212 254,2 181,0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 (restated) Technical Profit (TLm) Technical Profit (TLm) Technical Profit (TLm) As Percentage Of Net Earned Premium As Percentage Of Net Earned Premium CAGR: 15% 4% 54 57 57 65 60 49 34 41 40 48 CAGR: 33% CAGR: 12% 242,7 34% 233,8 25% 270,5 207,1 35,3 202,4 155,7 28,3 138,7 23,9 144,1 22,2 111,8 16,7 86,1 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 (restated) Source: Company information. 6 *Pension figures are including AE AvivaSA: Şirkete Özel (Internal)
Pension* Sustainable Growth and Scale Ambitions Pensions AUM including State Contribution (TLm) Technical Profit (TLm) CAGR: +15% CAGR: +26% 23.133 34% 4% 242,7 233,8 17.300 207,1 15.325 11.792 155,7 138,7 9.212 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 AE AuM (m tl) 165 432 774 Market Share Of AvivaSA % (in terms of AUM) Inc. AE Number of Participants (x1000) 2015 2016 2017 2018 2019 CAGR: +16% Pension 19,2 19,4 19,5 19,2 18,8 6% 1514 AE - - 9,2 9,4 9,4 1429 1214 Total - - 19,2 18,7 18,2 594 752 330 876 825 Average Monthly Contribution Size / Policy (TL) Inc. AE 2015 2016 2017 2018 2019 884 835 762 Pension 261 288 259 337 518 AE 77 60 66 2015 2016 2017 2018 2019 Source: Company information. 7 *Pension figures are including AE AvivaSA: Şirkete Özel (Internal)
One of the Leading Company in Auto Enrolment Market Supported by Selective Presence Resu esults s and and Less Lessons s Lea Learned So So Far ar More fragmented than regular pensions Servicing capability is very important Banks play a key role: AvivaSA achieved it’s targets mainly utilizing Akbank potential Cannibalization on private pension system was lower than expected Average opt-out ratio ~60% in the market Source: EGM 8 AvivaSA: Şirkete Özel (Internal)
Life Protection Sustainable and Resilient Growth Model Fuelled by Bancassurance GWP (TLm) Technical Profit (TLm, %) CAGR: +49% CAGR: +33% 87% 896,4 34% 270,5 202,4 144,1 480,2 392,6 111,8 86,1 254,2 181,0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 (restated) (restated) Claims and Commission Ratios (%) Sector Life GWP (TLm) (Excluding state companies) (Excluding Life Savings) CAGR: 32% 7.792 62% 2015 2016 2017 2018 2019 4.818 Claims Ratio* 22,3% 20,4% 13,3% 9,8% 7,1% 4.557 3.185 2.583 Comm. Ratio** 17,9% 18,4% 26,5% 26,1% 32,6% * Total Claims (exc. Surrender) / NEP ** Commission expenses net of income / NEP 2015 2016 2017 2018 2019 Source: Company information, TSB Note: (1) Technical Margin calculated as Technical Profit over NEP. 9 AvivaSA: Şirkete Özel (Internal) (2) Sector GWP figures are shown as Total life GWP.
Personal Accident A Complementary Profit Pool for the Group GWP (TLm) Technical Profit (TLm) CAGR: +12% CAGR: +16% 25% 9% 35,3 28,3 82,4 75,4 23,9 68,8 22,2 52,1 16,7 45,7 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Sector GWP (TLm) (Excluding state companies) Claims & Commission Ratio (%) CAGR: +19% 467 442 2015 2016 2017 2018 2019 375 5% 271 Claims Ratio 5,1% 19,4% 11,5% 10,7% 5,8% 232 Comm Ratio* 46,0% 46,0% 45,6% 48,1% 46,2% * Commission Expenses, net of income / NEP 2015 2016 2017 2018 2019 Source: Company information, TSB 10 Note: (1) Calculated as % of NEP AvivaSA: Şirkete Özel (Internal)
New Action Plan to Expand Life Protection + Personal Accident 2019 / 2018 Total Premium Growth Rate DSF+Agency * Non-Credit Linked 33% 300,8 mTL (31%) Bancassurance 54% 260,8 mTL (27%) Non-Credit Linked 161% 417,2 mTL (42%) Bancassurance Credit Linked 76% 978,8 mTL (Total Company) (Total Company) * Including Corporate and Telemarketing (non bancassurance) 11 AvivaSA: Şirkete Özel (Internal)
Financials 12
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