Investor Presentation Istanbul, Turkey March 2020 Agenda 1. - - PowerPoint PPT Presentation

Investor Presentation

Istanbul, Turkey – March 2020

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 Glance

Growing Economy

0% 1% 2% 3% 4% 5% 6% 7%

1990-1999 2000-2009 2010-2018 GDP Average Annual Growth*

Turkey OECD Euro-15

* OECD National Accounts Data, **IMF, ***Turkish Statistics Institute, ****World Bank National Accounts Data

• 6%
• 5%
• 4%
• 3%
• 2%
• 1%

0%

Budget Balance (% of GDP)**

Euro Area EM Turkey 0% 5% 10% 15% 20% 25%

CPI*** and Interest Rates****

CPI Interest Rates

5

• 8%
• 6%
• 4%
• 2%

0% 2% 4%

Current Account Balance (% of GDP)*

Euro Area EM Turkey

Turkey at a Glance

Urgent Need to Increase Domestic Savings

* IMF ** CBT Financial Stability Report: All data represents 3rd quarter figures, except for 2012 which shows the year-end figures.

0% 1% 2% 3% 4% 5% 6% 7% 250 500 750 1000 1250 1500 1750

2011 2012 2013 2014 2015 2016 2017 2018 2019 Weight of Pension Funds in Household Savings (TRY billion)**

Pension Funds Total Household Savings Weight of Pension Funds

Republic of Turkey – 11th Development Programme Article 222: The main aim of the development programme is to increase the amount of domestic savings and to direct these savings to the prioritized sectors and to financing of productive investments. 11th Development Programme (2019-2023), prepared by the Presidency of Strategy and Budgeting was approved by the Grand National Assembly of Turkey on 18.07.2019, and published in Official Gazette No. 30840 (repeated) on 23.07.2019.

10% 15% 20% 25% 30% 35%

Domestic Saving Rate (% of GDP)*

Euro Area EM Turkey

6

Turkey at a Glance

Demographic Opportunity Window

2018 2080 Population (millions) : 82.4 107.1 Median Age : 32.0 45.0 Fertility : 2.10 1.65* Proportion of Elderly Population : 8.8% 25.6%

2020 January

Population 15 Years And Over (thousands) : 62,015 Labor Force (thousands) : 31,629 Employed (thousands) : 27,266 Labor Force Participation Rate : 51.0% Unemployment Rate : 13.8% Non-Agricultural Unemployment Rate : 15.7%

Source: Turkish Statistics Institute - The World Bank – IMF * As of 2050 Decreasing fertility and increasing longevity means a demographic transition.

• 47 percent of the population is under 30 years old.
• Only 9 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.

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% 9,0%

Population by Age 2018 2080

Our Markets

Private Pension System Life Insurance

8

Our Markets

Private 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 by 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 Markets

Pillar III Private Pension System: Important Features Defined contribution and voluntary participation. Funds are managed by asset management companies. Minimum retirement age: 56 Completion of 10 years. Started in 2003. 17 companies in 2020. 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) ✓Ministry of Treasury and Finance ✓Ministry of Labor and Social Security ✓Pension Accounts Administered by Pension Companies ✓Pension Funds Managed by Asset Management Companies

Our Markets

Regulation Administration Monitoring

11

Our Markets

Pillar III Private Pension System: Incentives

For Participants For Employers

• Contributions with a cap of

annual legal minimum wage is subject to 25% state contribution.

• State contribution is %10 for

the Turkish citizens who live abroad and paying contributions based on foreign currency

• Investment income of

pension funds are tax exempt.

• Transaction of pension

funds are exempt of fees and taxes.

• Withholding tax applies only
• n the investment income:

5% (completion of 10 years in the system & 56 years of age) 10% (completion of 10 years in the system) 15% (before completion of 10 years in the system)

Contribution Stage Investment Stage Benefit Payments Employer contributions are deductible from tax base up to 15% of gross salary with a cap of annual legal minimum wage.

• 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

12

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 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 Markets

Pillar III Private Pension System: Growth Accelerated with Increased Government Support

Under Discussion Implemented

• 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 started in 2017
• Integration of Employee

Termination Benefits (Severence Payments) with Auto Enrolment

• Private Pension for Minors
• Withdrawing Some of the Funds

from Pension Account

* Funds from associations, foundations, provident funds and other organizations with retirement provisions. Source: Pension Monitoring Center as of 31.03.2020

20 40 60 80 100 120 140 AUM State Contribution

Pension AUM Growth

(TRY billion)

1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000

Number of Participants

(Thousands)

14

Our Markets

Pillar III Private Pension System: Big Growth Potential

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 6.9 Million Social Security Participants 22.2 Million Work Force 32.7 Million Working-Age Population 61.8 Million

Total Population 82 Million

Source: OECD Pension Markets in Focus 2019; Turkish Statistics Institute as of 31.10.2019; Social Security Institution as of 31.10.2019; Pension Monitoring Center as of 31.12.2019 %50 %3 %0 %25 %50 %75 %100 %125 %150 %175 %200 %225

Denmark Netherlands Iceland Canada Switzerland Australia United States United Kingdom Sweden OECD Total Jamaica Korea Japan New Zealand Uruguay Spain Bulgaria Slovak Republic Belgium Maldives France North Macedonia Norway Italy Czech Republic Romania Turkey Serbia Greece Ukraine

Pension Funds as a Percentage of GDP

15

Our Markets

Pillar III Private Pension System: Key Highlights

Key Figures

Participants : 6.9 Million Participant Funds : TRY 105.2 Billion State Contribution Funds : TRY 16.9 Billion Assets Under Management : TRY 122.1 Billion Pension Companies : 17

4,6% 23,8% 33,2% 26,3% 12,1% 0-25 25-34 35-44 45-55 56+ Participant Age Distribution*

Individual 75,1%

Non- Sponsored Groups 17,2%

Employer Sponsored Groups 7,7%

Total Amount of Contributions by Contract Type *

Bank 69% Other 6% Direct Sales 9% Corporate Sales 4% Agent 12%

Distribution of Contributions by Marketing Channel *

1.000 1.500 2.000 2.500 3.000 3.500 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average of Total Amount of Regular Contributions per Year (TRY) *

Source: Pension Monitoring Center * As of 31.12.2019

16

Our Markets

Private Pension System: Pension Funds*

Equity 11,0% Repo and Money Market Instruments 5,4% International Securities 1,6% Government Bonds 61,5% Corporate Bonds 8,5% Other 12,0%

Asset Allocation of Pension Funds Number of Funds : 407 Total AUM : TRY 130,9 Billion Return on Pension Funds (2004-2020) Nominal : 643,2% Real : 71,7%

* Includes Auto Enrolment Funds , as of 31.03.2020

24% 20% 11% 18% 10% 23% 10% 0% 18% 0% 15% 3% 11% 15% 13% 27% 1%

13%

11% 1% 9%

• 1%

16% 3%

• 9%

11%

• 7%

6%

• 5%

2% 3%

• 7%

14%

• 1%

Nominal & Real Investment Return of Pension Funds

Nominal Return Real Return

17

Our Markets

Private Pension System: New Frontiers

Integration of Employee Termination Benefits (Severence Payments) with Auto Enrolment Withdrawing Some of the Funds from Pension Account Private Pension for Minors

18

Our Markets

Auto 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 initiation period**. Voluntary opt-out at any time Law enacted in 2016, in force by 2017. All six phases were completed.

Structural changes in marketing, sales and service model SME & Corporate

*Based on the Law enacted in August 2016 and the complementary legislation. ** The statement of 'Initiation period' was brought instead of "Call Back Period" based on the legislation change made as of 5 December 2018

No employer contribution

19

Our Markets

Auto 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
• f 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.

• Additional state contribution has a limit of

multiplication of number of months remained in the system and the monthly minimum wage at the retirement date.*

Contribution Stage Investment Stage Retirement Stage

*In force through the legislation change made on 5 December 2018.

20

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 August 2016, no management or entrance fee is allowed in Auto Enrolment System. Fund Management Fee is capped at a maximum of 0.85%.

21

Our Markets

Auto Enrolment - New Target Market

WORKFORCE*

* Social Security Institution October 2019, Turkish Statistics Institute, October 2019 ** Estimated as 75% of the 4a and 4c participants

Eligible Employees (age less than 45)** 13.2 Million Social Security Participants (4a&4c) 17.6 Million Social Security Participants 22.2 Million Employed 28.3 Million Work Force 32.7 Million 3.1 Million (4c public sector) 12.9 Million

(4a private sector)

1.6 Million

(4a public sector)

SOCIAL SECURITY PARTICIPANTS (4A&4C)

22

Our Markets

Auto Enrolment – Market Preview

Market Size*

Number of Employees 6,163,599 Number of Certificates 6,608,844 Total Funds (TRY) 8,785,771,145

*Source: Pension Monitoring Center as of 31.03.2020

Staging Process All phases of Auto Enrolment were completed.

Date Target get

2017 7 Janua nuary ry Priva vate te compa mpani nies with 1,00 000+ 0+ emplo ploye yees 2017 7 April Priva vate te compa mpani nies with 250 250-999 999 emplo ploye yees Public admi dmini nistra stratio tions ns 2017 7 July Priva vate te compa mpani nies with 100 100-249 249 emplo ploye yees 2018 8 Janua nuary ry Priva vate te compa mpani nies with 50 50-99 99 emp mployee yees Public ente nterprise prises and loca cal admi mini nistra stratio tions ns 2018 8 July Priva vate te compa mpani nies with 10 10-49 49 emp mployee yees 2019 9 Janua nuary ry Priva vate te compa mpani nies with 5-9 9 empl mploye yees

23

Our Markets

Life Insurance: Underpenetrated Market

17 110 127

1,978 1,298 3,276 370 312 682 Life Insurance Non Life Insurance Total Insurance Turkey Advanced EMEA World Insurance Premium per Capita (USD) Global Comparison (2018) Source: Sigma, SwissRe

Country / Region Life GWP (in % of GDP) Share of World Market (in %) Turkey 0.2 0.05 Advanced EMEA 4.6 33.1

World 3.3

• Life insurance market has great potentials in Turkey.

Turkey’s life insurance market is extremely underpenetrated as life premiums’ weight in GDP 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.

24

Our Markets

Life Insurance Total GWP

(TRY million)

3,350 3,229 3,701 4,963 6,766 6,835 11,360 1.323 2.796

• 4%

15% 34% 36% 1% 66%

• 50%
• 40%
• 30%
• 20%
• 10%

2013 2014 2015 2016 2017 2018 2019 2019/02 2020/02 Term Life Endowment / Saving Annuity

Life Insurance GWP

(by 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: Life Insurance Information and Monitoring Center

Life Insurance

YoY (TOTAL) L) : 111% Term rm Life : 113% Endowm wment / / Savi ving : : 100 100% Annuity ty : : -59 59%

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Anadolu Hayat Emeklilik

Corporate Profile

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Anadolu Hayat Emeklilik

At a Glance

Free Float 15% İşbank 64% Anadolu Sigorta 20% 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 TRY 27.5 billion

SECTOR’S LEADER

Life and Private Pension Funds TRY 25.9 Billion

SECTOR’S LEADER

Private Pension Contracts 2.2 Million * The rate of publicly traded shares is 17%. As at 30 June 2019, İşbank owns the 1.89% of the publicly traded shares.

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Anadolu Hayat Emeklilik

At a Glance I

Organization

Headquartered in Istanbul Customer Service Center in İstanbul 11 District Sales Offices Branch Office in TRNC

II

Human Resources

HQ and Regions : Direct Sales Team : Total : 575 499 1,074

III

Financial Metrics

Total Assets : Shareholders’ Equity : Gross Profit : Market Value : TRY 27,525 Million TRY 1,060 Milion TRY 162 Million TRY 2,279 Million

IV

Brand Value

Top of Mind Brand 42*

V

Market Position

Private Pension and Auto Enrolment Contracts : Participants : Assets Under Management : #1 – %15 #1 – %15 #2 – %18 Life Insurance AUM (Mathematical Reserves) : Gross Written Premium : #1 – %24 ** #2 – %9 * Source: TNS, as of December 2019 ** As of February 2020

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Anadolu Hayat Emeklilik

Financial Highlights

Key Financial Metrics 2018 2019 ROAE 29% 35% Expense Ratio 24.8% 19.9% P/E Ratio 10.2 8.2 P/B Ratio 2.7 2.3 Earnings per Share 0.59 0.83 ((TRY Million) 2018 2019 Change 2019Q1 2020Q1 Change Total GWP and Net Contributions 2,032.5 3,148.7 55% 482.7 1,336.0

177%

Life Mathematical Provisions 1,740.3 2,231.8 28% 1,715.2

2,317.9 35%

Pension AUM 16,937.6 22,913.7 35% 17,533.7

23,337.5 33%

Total Assets 20,221.5 27,134.8 34% 20.860,6

27,525.0 32%

Shareholders Equity 940.6 1,273.7 35% 853.4

1,060.5 24%

Total Technical Profit 237.6 353.7 49% 66.7

130,8 96%

Non Life

• 1.1
• 1.0
• 5%
• 0.1
• 0.7

608%

Life 151.1 264.1 75% 42.6

108.1 154%

Private Pension 87.6 90.7 4% 24.2

23.4

• 4%

Financial Income 133.7 167.3 25% 46.4

45.4

• 2%

Profit for the Period 322.2 476.8 48% 96.9

161.5 67%

Net Profit 253.6 357.5 41% 72.6

125.1 72%

2019Q1 2020Q1 29% 39%

24.4% 14.2% 9.4 5.6 2.8 2.1 0.59 0.95

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Anadolu Hayat Emeklilik

Lines of Business

Private Pension Individual Plans Non- Sponsored Group Plans Employer Sponsored Group Plans Income Drawdown Plans Life Insurance Annuities Term Life Savings & Endowment Personal Accident Insurance Group Accident Insurance Personal Accident Insurance Conservative Balanced Dynamic

• Money Market
• Conservative

Flexible

• Participation

Standard

• Private Sector

Debt Instruments

• Group

Conservative

• Initial
• Initial

Participation

• Auto Enrolment

Conservative

• Auto Enrolment

Standard

• Auto Enrolment

Participation Standard

• Bond
• Balanced

Flexible

• Group Bond
• Group Debt

Instruments

• Debt Instruments
• Standard
• Auto Enrolment

Balanced

• First Debt

Instruments

• Second Debt

Instruments

• Developed

Countries Flexible

• Dynamic Flexible
• Auto Enrolment

Dynamic

• Auto Enrolment

Dynamic Participation

Lines of Business Pension Funds

Auto Enrolment Auto Enrolment Plans Aggressive

• Equity Fund
• BRIC Plus
• Aggressive

Flexible

• Gold
• Group Equity
• Second Equity
• Isbank

Subsidiaries Index

• Auto Enrolment

Aggressive

• Auto Enrolment

Aggressive Participation

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Anadolu Hayat Emeklilik

Distribution Network

26 District Sales Offices 1.260 Branches 2.521 Licensed Intermediaries 66 Licensed Tele-Sales Agents 11 District Sales Offices Branch in Northern Cyprus 12 Regional Sales Manager 51 Regional Sales Supervisor 498 Direct Sales Team 241 Agencies 406 Licensed Intermediaries 113 Branches 3 Branches 1 Branch

Private Pensions New Business Channel Mix (Contributions) – 2019

(Branch+DS+TS) 86,5%

Tele Sales 3,3% Agency 11,1% Others 2,4% İşbank

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Anadolu Hayat Emeklilik

Deep Bench with Lots of Talent

Total Number

• f Employees:1,074

6% 23% 33% 23% 11% 3% 1% 18-24 25-29 30-34 35-39 40-44 45-49 50+

Young & Energetic

0,4% 1,8% 89,6% 8,2% Primary Level High School University Graduate

Educated

62% 38% Female Male

Diverse

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Anadolu Hayat Emeklilik

Corporate 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

• pportunities

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 Enhance collaboration and interaction within teams Become the first choice for employees through high performance teams

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Anadolu Hayat Emeklilik

Strong 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

• ld legacy system. Second phase of the Project,

covering life insurance operations has started with credit linked term life products and its first delivery is aimed to go live by the second half of 2020. While designing the new infrastructure, processes covering all operational processes were created. Thus, it is enabled to follow the steps, perfect the integration points and minimize the risks. While the processes were designed, flexibility, agility, speed and savings were prioritized, so, it was aimed to perfect the experiences of both our company employees and our customers. Within the scope of the transformation project, all steps that require collaboration with Isbank in the Life Insurance cycle will be carried out quickly and safely through a platform that will be used jointly.

CRM

(Microsoft Dynamics)

Hardware Architecture Transformation

(Exadata)

Payment and Collection Processes Module

(Payment HUB)

Commission and Intermediary Campaigns Rule Engine Operational Excellence Digital Corporate Identity

(AHEŞUBE, AHEMOBİL, AHEWISE)

Financial Systems Transformation

(GL / FAH)

Insurance Applications Transformation

Integrated BI and Reporting Platform

(Atlas)

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Anadolu Hayat Emeklilik

Perfect Customer Experience

Internet Branch Mobile App Best Advice Robo Advisor Operational Excellence Customer Experience Projects & Operational Excellence Among the vision

• f

‘Perfection in Customer Experience’, there are 5

• ngoing

projects.. Our new and modernised Mobile app was presented to our customers in April. «Standard Critical İllness product» besides «Youth Pension Plan» has been started to be sold online, via our web site. Return analysis and Risk Analysis reports have been added on Fonmatik Robo dashboards. Project activities in Internet Branch Project has gained momentum. Operational Excellence Project continues with Auto-enrolment process improvements and discontinuation processes.

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Anadolu Hayat Emeklilik

Focus on Customer Retention

98 99 100

Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Mar-20

Continuity Index* (%)

AHE System Sector Average

* Pension Monitoring Center data as of March 2020 ** Pension Monitoring Center data as of March 2020 (last 12 months’ average)

• Key account management
• Consultancy through investment managers
• Exclusive customer service on call center
• Special customer loyalty programs
• Premium gifts for special days

Lowest churn rate in peer group

• 1.1% monthly churn rate** (1.1% 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
• Churn analysis

VIP segment focus

• Reduce churns, increase cross-selling,

improve customer interaction and keep it alive, inform, raise regular contributions, avoid nonpayment

• Emphasis of benefits in outbound calls
• Differentiation of target audience according

to customer profiling Outbound retention calls

• Customer experience program
• Customer satisfaction surveys & researches
• Customer journeys based on different personas
• Enabling our customers to perform all transactions through our

digital channels without leaving their home, in order to keep them safe and healthy

• Quick actions taken about cancellation processes of life insurance

policies and deferred payment requests for bank loans in order to prevent any victimization of customers Customer Experience Management Collections Performance

• Campaigns to raise regular and additional

contributions

• Automated collection warning mechanisms
• Offer for increasing the contribution amount to

get maximum state subsidy by incoming and

• utbound call

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Anadolu Hayat Emeklilik

A Strong Brand Name

*SocialBrands Data Analytics Awards evaluate brands’ performance according to the SocialBrands social media brand index which is consolidated from independent data

The first and only UNEP-FI member of Turkish insurance sector Became Women’s Empowerment Principles (WEPs) signatory. A carbon neutral company since 2017 Received golden prize in 2019 SocialBrands Data Analytics Awards among private pension and life insurance firms.* Received «Customers’ Friend» award by international certification association ICERTIAS Awarded as best-in-class private pension company at customer experience in 2019 at A.L.F.A awards . Received bronze award in Stevie Awards 2019 with its new website

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Anadolu Hayat Emeklilik

A Strong Brand Name

FonmatikROBO service has been ranked second in IDC Finance Awards 2019. Our Project and Portfolio Management tool «Bitalep» has been awarded as 2nd by IDC in Finance Awards, Change Management category. Our Customer Service building is entitled to receive a «Leed Gold» certificate issued by the American Green Building Council (USGBC) to sustainable and environmentally friendly

• ffices.

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Anadolu Hayat Emeklilik

Strong Market Positioning in Private Pensions

1,026,593 1,120,505 1,148,956 1,114,224 1,092,911 1,102,002 1,102,559

2015 2016 2017 2018 2019 2019Q1 2020Q1

16% 17% 17% Market Share

YOY 0%

Participants (Pillar III)

8,945 11,366 14,579 16,510 22,075 17,027 22,425

2015 2016 2017 2018 2019 2019Q1 2020Q1

19% 19% 19% 19% Market Share

Assets Under Management (Pillar III) (TRY million)

6,831 8,189 9,652 10,790 12,447 11,032 13,183

2015 2016 2017 2018 2019 2019Q1 2020Q1

Contributions (Pillar III) (TRY million)

Source: Pension Monitoring Center

18% 18% 18% 18% Market Share 17% 16% 19% 18% 16% 16% 18% 19% 18% 18%

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Anadolu Hayat Emeklilik

Strong Market Positioning in Private Pensions

340,583 590,403 771,227 621,895 794,049

2017 2018 2019 2019Q1 2020Q1

10% Market Share

Participants (Auto Enrolment)

184 485 866 564 918

2017 2018 2019 2019Q1 2020Q1

10% 10% Market Share

Assets Under Management (Auto Enrolment) (TRY million)

174 428 689 487 779

2017 2018 2019 2019Q1 2020Q1

Contributions (Auto Enrolment) (TRY million)

Source: Pension Monitoring Center

10% Market Share 12% 11% 13% 11% 11% 13% 12% 10% 10% 11% 11%

40

402,1 501 574,7 639,2 1,229.0 181,4 510,0

2015 2016 2017 2018 2019 2019Q1 2020Q2

Anadolu Hayat Emeklilik

Strong Market Positioning in Life Insurance

10% 11% 10% Market Share

Life Insurance GWP (TRY million)

259,0 395,0 459,4 449,9 910,6 131,4 356,0

2015 2016 2017 2018 2019 2019Q1 2020Q1

9% 8% 9% Market Share

Term Life GWP (TRY million) Mathematical Reserves – Life Insurance Fund Size

Market Share* AHE 22% Others 78%

Market Leader with 2.5 billion TRY AUM

*As of 28.02.2020

7%

Term Life 70% Saving/ Endowment 29% Annuity 1%

2020Q1

9% 7%

Source: Insurance Association of Turkey , Life Insurance Information and Monitoring Center

8% 10% 10% 9% 10%*

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Anadolu Hayat Emeklilik

Statutory Financials

175,9 229,8 279,8 322,2 476,8 96,9 161,5

2015 2016 2017 2018 2019 2019Q1 2020Q1

108,3 133,0 199,2 237,6 353,7 66,7 130,8

2015 2016 2017 2018 2019 2019Q1 20120Q1

Technical Profit (TRY Million) Gross Profit for the Period (TRY Million)

86,5 112,5 132,6 151,1 264,1 42,6 108,1

2015 2016 2017 2018 2019 2019Q1 2020Q1

Life Technical Profit (TRY million)

22,0 21,1 67,1 87,6 90,7 24,3 23,4

2015 2016 2017 2018 2019 2019Q1 2020Q1

Pension Technical Profit (TRY million)

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Anadolu Hayat Emeklilik

Statutory Financials

Net Distributable Profit / Dividend to Shareholders (TRY Million) Dividend Payout Ratio (%)

142 186 221 255 346 100 140 170 130 280

2015 2016 2017 2018 2019

Net Distributable Profit Dividend to Shareholders

70 75 77 51 81

2015 2016 2017 2018 2019

Cash Dividend / Net Distributable Profit (%)

184 215 249 268 330 789 877 949 968 1313

2015 2016 2017 2018 2019

Required Capital Total Capital

2015 2016 2017 2018 2019 2020Q1

ROAE 20% 24% 26% 29% 35% 39% Dividend per Share Gross (TRY) 0,24 0,33 0,40 0,30 0,65

• Shareholders’ Equity and Capital Adequacy Ratio (TRY Million)

430% 408% 381% 361% Capital Adequacy Ratio 397%

43

Anadolu Hayat Emeklilik

Statutory Financials

108,3 133,0 199,2 237,6 353,7 66,7 130,8 270,4 318,9 352,5 440,1 573,3 117,7 189,3

2015 2016 2017 2018 2019 2019Q1 2020Q1

Technical Profit Operating Expenses Technical Profit / Operating Expenses (TRY Million)

Marketing Expenses 4% Employee Benefit Expenses 27% Commission Expenses 56% Administration Expenses 13%

Operating Expenses – 2020 Q1

15,6 17,2 16,0 24,8 19,9 24,4 14,2 2015 2016 2017 2018 2019 2019Q1 2020Q1

Expense Ratio (%) (*)

(*) G&A Expenses / Contributions+GWP

44

Anadolu Hayat Emeklilik

Statutory Financials

Summary of Income Statement

(mio TRY) 2015 2016 2017 2018 2019 CAGR 2019Q1 2020Q1 YOY Non-Life Technical Profit / Loss

• 0.24
• 0.57
• 0.54
• 1.08
• 1.03

44%

• 0.09
• 0.69

608% Life Technical Profit / Loss 86.48 112.49 132.61 151.10 264.08 32% 42.56 108.12 154% Pension Technical Profit / Loss 22.02 21.09 67.12 87.56 90.68 42% 24.25 23.35

• 4%

General Technical Profit / Loss 108.26 133.01 199.19 237.58 353.73 34% 66.72 130.78 96% Net Investment Income 72.07 101.88 98.20 98.28 109.47 11% 32.33 32.41

• Other Income/Expenses
• 4.48
• 5.09
• 17.58
• 13.65

13.64

• 2.19
• 1.66
• 24%

Profit Before Taxes 175.85 229.80 279.81 322.21 476.84 28% 96.86 161.53 67%

45

Anadolu Hayat Emeklilik

Statutory Financials

Pension Technical Profit

(mio TRY) 2015 2016 2017 2018 2019 CAGR 2019Q1 2020Q1 YOY Pension Technical Income 209.06 236.76 300.55 369.19 427.72 20%

100.88 118.10 17%

1- Fund Management Income 144.26 173.82 216.74 256.42 304.27 21% 68.61 83.27 21% 2- Management Fee 26.38 21.20 32.96 46.36 58.86 22% 14.77 18.49 25% 3- Entrance Fee Income 32.05 37.08 42.60 53.89 49.51 11% 14.06 11.49

• 18%

4- Other Technical Income 6.37 4.66 8.25 12.52 15.08 24% 3.44 4.85 41% Pension Technical Expense

• 187.04
• 215.67
• 233.43
• 281.63
• 337.04

16%

• 76.63
• 94.75

24% 1- Total Fund Expenses

• 22.34
• 24.57
• 31.08
• 23.57
• 27.17

5%

• 6.98
• 3.37
• 52%

2- Operating Expenses

• 157.26
• 181.71
• 187.91
• 237.97
• 286.89

16%

• 64.13
• 85.27

33% 3- Other Technical Expenses

• 7.44
• 9.39
• 14.44
• 20.09
• 22.98

34%

• 5.52
• 6.11

11% Pension Technical Profit 22.02 21.09 67.12 87.56 90.68 42% 24.25 23.35

• 4%

46

Anadolu Hayat Emeklilik

Statutory Financials

Life Technical Profit

Technical Margin (Technical Profit / Earned Premiums) 22.1% 23.7% 24.4% 24.2% 22.1% (mio TRY) 2015 2016 2017 2018 2019 CAGR 2019Q1 2020Q1 YOY Life Technical Income 602.51 700.85 741.97 1,004.27 1,493.82 25% 274.98 650.13 136% 1- Earned Premiums (Net of Reinsurer Share) 391.78 475.43 544.07 625.55 1,193.75 32% 172.61 501.10 190% 2- Investment Income 202.87 214.83 190.80 368.91 291.74 10% 100.14 145.78 46% 3- Other Technical Income 7.86 10.59 7.10 9.80 8.33 1% 2.23 3.25 46% Life Technical Expense

• 516.03
• 588.36
• 609.36
• 853.17
• 1,229.74

24%

• 232.42
• 542.01

133% 1- Incurred Losses (Net of Reinsurer Share)

• 426.60
• 448.86
• 403.40
• 491.12
• 597.01

9%

• 153.04
• 166.21

9% 2- Change in Provision for Bonus and Discounts

• 0.15
• 0.14

0.16

• 0.12

0.02

• 0.01

0.17

• 3- Change in Life Mathematical Provisions

26.54 2.27

• 36.53
• 155.21
• 335.82
• 24.39
• 267.61

997% 4- Change in Other Technical Provisions

• 3.11
• 4.96
• 5.81
• 5.67
• 11.70

39%

• 1.63
• 4.61

182% 5- Operating Expenses

• 112.71
• 136.67
• 163.78
• 201.05
• 285.23

26%

• 53.35
• 103.75

94% Life Technical Profit 86.48 112.49 132.61 151.10 264.08 32% 42.56 108.12 154% 24.7% 21.6%

47

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