Presentation to Investors FY 2018 Earnings Release February 11, - PowerPoint PPT Presentation

Presentation to Investors FY 2018 Earnings Release February 11, 2019

Solid Financial Foundations and Historical Track Record of Value Creation YoY /Δ 2018 Pension AUM (inc AE) 13% 17.3bTL ● AvivaSA has maintained #1 position in terms of AuM ● Focus on standalone products (ROP) helped to move #5 position in GWP market share Total GWP (Life+PA) 20% 565 mTL Total Technical Profit 20% ● Steady increase thanks to pension scalability and high profitability in protection segments 454 mTL Expense Ratio (1) 4.6 pts 45.6% ● The decrease is due to higher increase in profit compared to the expense base for the ratio ● In Addition to 20% increase in technical profit, financial income is higher than prior year due to Profit for the Period (IFRS) 201 mTL 39% higher interest and f/x income ROE (IFRS) +4.6 pts ● Strong profit combined with lean capital 34.3% ● SFRS Profit started to converge to IFRS Profit Profit for the Period (SFRS) 88% 191 mTL ● Strong dividend growth in accordance with strong growth in SFRS profit, Dividend (proposal) 107% 100 mTL while maintaining the Solvency1 Ratio >150% MCEV 1,882 mTL 13% ● MCEV has continued its growth underpinned by the quality of the in-force book VNB 233 mTL 0% ● Nogrowth due to lower pension volume in a challenging environment 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

Differentiated Management of Trends and 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: 14% CAGR: 25% 1,6 1,6 1,5 1,5 1,4 75,4 68,8 480,2 CAGR: 25% 17.300 392,6 52,1 15.325 10% 45,7 45,4 11.792 254,2 13% 22% 9.212 196,9 181,0 7.127 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 (restated) Technical Profit (TLm) Technical Profit (TLm) Technical Profit (TLm) As Percentage Of Net Earned Premium As Percentage Of Net Earned Premium CAGR: 20% 233,8 60 54 57 57 59 41 49 34 41 40 207,1 CAGR: 16% CAGR: 17% 184,6 155,7 28,3 13% 138,7 144,1 23,9 22,2 114,2 111,8 103,4 28% 16,7 18% 86,1 15,2 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 (restated) Source: Company information. 3 *Pension figures are including AE

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 as of 28.12.2018 4

New Action Plan to Expand Life Protection + Personal Accident 2018 / 2017 YoY Total Premium Growth Rate DSF+Agency * Non-Credit Linked 66% 226,4 mTL (41%) Bancassurance Non- 41% 169,4 mTL (30%) Credit Linked -22% 159,7 mTL (29%) Bancassurance Credit Linked 20% 555,6 mTL (Total Company) (Total Company) * Including Corporate and Telemarketing (non bancassurance) 5

A Story of Solid Profitable Growth Shareholders’ Equity and Solvency Ratio (TLm) Profit for the Period (TLm) Solvency Ratio CAGR: +23% 225% 139%* 150% 172% 193% CAGR: +17% 621,1 549,4 39% 92,0 0 200,6 427,7 29,1 144,7 355,5 333,7 13% 105,0 87,1 62,9 2014 2015 2016 2017 2018 (restated) 2014 2015 2016 2017 2018 ( restated ) Technical Profit After G&A (TLm) ≈ EBIT 2015 2014 2016 2017 2018 (restated) CAGR: +23% ROE 156,3 29% 18%* 27% 30% 34% *Before write-off RoE is 26%,Solvency ratio is 154% 117,9 33%  Steady increase in shareholders’ equity reflects active management of 79,9 67,7 65,8 capitalization to fund business growth  Capital- light business, which benefits from AvivaSA’s measured approach to risk and new product introduction 2014 2015 2016 2017 2018 (restated)  IFRS 15 Impact is calculated beginning from 2013 and has been reflected on 2018 opening equity, amount of (43.9) m TL. Source: Company information. 6 Note: Analysis on profitable growth derives from segmental information on this and following pages of the section, unless otherwise stated..

… Solid and Resilient Technical Profitability with Operating Leverage Potential… Expense Ratio (%) Technical Profit (TLm) Expense ratio=(Opex-AE Related Expenses-Sales Expenses)/(Opex-AE Related Expenses-Sales Expenses+IFRS Proft Before Tax) 62,0% 56,0% 53,3% 50,1% 45,6% CAGR: 18% 454,0 CAGR: 15% 378,1 20% 2014 2015 2016 2017 2018 297,6 * 287,8 260,2 Breakdown of Gen. Expenses, IFRS (2018) 249,9 235,6 207,9 Marketing Expenses Other 184,0 168,0 2% 23% 14% Sales Personnel Expenses 32% 2014 2015 2016 2017 2018 (restated) HO Personnel Expenses Technical Profit G&A IT Expenses 27% 11% Sales Expenses 5% Source: Company information 7 *Excluding write-off

Summary of P&L from IFRS Segmental Reporting 2015 2014 2016 2017 2018 CAGR YoY (restated) Pension Technical Profit 114,2 138,7 20% 13% 155,7 207,1 233,8 Life Protection Technical Profit 103,4 86,1 111,8 144,1 184,6 16% 28% Life Savings Technical Profit 2,9 2,9 3,6 3,0 7,3 26% 141% Personal Accident Technical Profit 15,2 22,2 16,7 23,9 28,3 17% 18% Total Technical Profit 235,6 249,9 287,8 378,1 454,0 18% 20% General and Administrative Expenses -168,0 -184,0 -207,9 -260,2 -297,6 15% 14% Total Technical Profit after G&A Expenses 67,7 65,8 79,9 117,9 156,3 23% 33% Total Investment Income & Other 42,2 49,8 52,3 63,3 102,6 25% 62% Profit Before Taxes 109,9 115,6 132,2 181,2 258,9 24% 43% Profit for the Period (Before Write-Off) 87,1 92,0 105,0 144,7 200,6 23% 39% One-off Asset Write-Off Effect (net of tax) -29,1 Profit for the Period (After Write-Off) 87,1 62,9 105,0 144,7 200,6 23% 39% One-off Asset Write-off: An IT project has been started at the end of 2012 in order to standardize all core insurance systems into a single application and integrate this core system with the peripheral systems. Although the project still continues, it has been decided to discontinue the development of the new core insurance application. Instead, current core systems will be modernized with a more agile methodology. Total capitalized costs related with this project was 48.7 Mtl, and TRY 36.3 Mtl of this cost (around 75%) has been written off in accordance with the aforementioned decision. Source: Company information, IFRS and segmental reporting. 8

AvivaSA Mobil App is in live… ≈ 100k Downloads 4.7 Rating from Customers • Pension & Life policy summary & detail monitoring • Pension basic transactions & changes • Pension contribution change and lum-sum payment • FonPro- Robo advisory tool • Pension demo calculations & Tax Advantage Calculation Tool • Product Application Request • Push Notifications – State Contribution and ve Unpaid period notifications • Live Chat • Customer loyalty campaigns & Life side benefits • Financial News • Life Insurances – Risk test and product suggestions 9

Captive Agency Leveraging Existing Direct Sales Force Team and Providing True Customer Composite with Health & GI Products Captive Agency Model  Creating a separate business entity in the form of an agency that will make DSF financial advisors eligible to sell also health insurance and GI products in addition to existing life & pension products, which will leverage the potential of direct sales force and provide True Customer Composite.  According to existing regulations, pension and life insurance companies are not allowed to sell non-life insurance products. Our strategy is, by making our current strengths stronger, « Customer Focus » Providing all insurance products and services by a GI & Health single financial advisor: One-stop shop concept Third Party Ins. Company Large « Efficient DSF» Strong Brand Experienced GI & Health GI & Health Customer Base Equity Sales Team Know-How Increasing productivity and supporting extra income Products opportunity with new products To imagine a « Lifelong» insurance shopping friend who knows you better than anyone else and chooses for you 10

2019 Outlook  Strengthening the customer experience with digital and user friendly solutions  Maintaining leadership in terms of pension AuM with ~20% y-o-y growth with support of higher customer retention and better fund returns  Selective presence approach while acquiring auto enrolment customers  Accelerating the high performance in life business  Controlled increase in expenses for the upcoming periods  Improving technology by stabilizing IT infrastructure  Strong RoE level at ~30% Source: Company information 11

Going Forward IFRS 9 IFRS 16 IFRS 17 12

Market Consistent Embedded Value Disclosures 13

Proven track record of embedded value growth 13% 2.000 1.882 1.750 1.662 1.475 1.500 1.248 1.204 1.250 Million TL 955 1.000 740 750 682 570 474 460 441 500 250 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Years 11 Note: Company data, 2017 unaudited results