AgeSA Hayat ve Emeklilik Anonim Sirketi : FY 2022 Earnings Release

AgeSA

FY 2022 Financial Results

Earnings Release

February 16, 2022

Kahramanmaraş Earthquake

We are deeply saddened by the earthquakes that took place in Kahramanmaş and the surrounding 10 provinces on February the 6th, 2023. We offer our deepest condolences to the families of those affected and a speedy recovery to all those injured. As always, we at AgeSA are committed to walk hand-in-hand with the people of Turkey in every way possible including covering the claims occurred by our customers at the earliest opportunity.

At this time, we would like to reassure our shareholders that we do not foresee any material effect to our 2023 profitability or balance sheet due to the events of last week as AgeSA holds reinsurance to cover such catastrophic risk events.

In the meantime, we pledge to continue to provide exceptional service to our customers.

#1 Leadership Position in Pension AuM and Total Life & PA GWP among private companies

AgeSA maintains Pension&AE AuM leadership and ranked as leader in Life & PA business among private companies with support of sustainable growth in Life business driven by the success of long term credit life product (Kredim Güvende) and strong RoP portfolio.

AgeSA reached successful results in net profit, thanks to strong technical income growth resulting from high profitability in life and pension scalability and financial income increase despite economic volatilities.

FINANCIAL HIGHLIGHTS

• The Pension Assets under Management (AuM) has grown by 73% yoy and reached 72.8 billion TL as of FY 2022.
• Auto Enrolment AuM increased by 105% yoy resulting mainly from the increasing inforce volume. AgeSA is one of the leader companies in terms of private sector participants and AuM.
• Total protection premiums grew by 76% yoy, driven by 106% growth in stand-alone(non-credit linked) life protection underpinning AgeSA's diverse business model and product positioning.
• Inflation accounting is not applied for 30 September 2022 Financial Statements, all financial figures represent Management Reporting (IFRS Financials excluding inflation accounting effect)
• Management Reporting Net Profit is higher than prior year by 108% at 1.127 mTL mainly due to strong growth in all major business lines (Pension, Credit Life and RoP) and increase in net financial income resulting from higher interest and f/x rates.
• Total technical profit has increased by 68% yoy driven by the growth in life protection volumes and pension AuM.
• RoE is 58.9% as of FY 2022.
• Statutory profit is 875 mTL with an increase of 94% due to mainly growth in life protection technical profit and increase in financial income.

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Şirkete Özel (Internal) Note: Management Reporting: IFRS Financials excluding inflation accounting effect

STRATEGIC HIGHLIGHTS

• AgeSA serves 3.3 million customers through an extensive distribution structure, comprised of a bancassurance network, which it established with Akbank, the industry's most productive direct sales team, an exclusive agency network, corporate projects and telesales.
• AgeSA achieved to maintain our strong presence in the private pension market.
• AgeSA has expanded its life insurance business even further by enriching its product range and services through customer-oriented and innovative solutions. Resulted in leadership position among private companies in terms of premium production.
• In order to respond to shifting market and customer dynamics, AgeSA continued to improve its distribution capabilities in Q4 2022, in particular with the growth of the direct sales channel.
• In addition to providing financial assurance to customers, AgeSA has developed innovative business models and projects for sustainable growth. Parallel with the changes in global demographics, Turkey's elderly population is growing rapidly with a lack of qualified services for an ageing population necessitating new initiatives, services and products. The problems faced by senior citizens also come within the scope of our corporate social responsibility project, "Her Yaşta", which addresses a wide range of the age-related issues faced by individuals and society.
• AgeSA's "Life Cycle" Pension Funds allows customers to access three different "fund of funds" options, which offer stable and sustained returns in the long run in parallel with investor profiles. These funds offer agile and professional investment alternatives, especially during volatile economic conditions.
• AgeSA also released its new product, "Sustainability Funds" for pension business, which allows customers to invest in companies that embrace Environmental, Social and Governance values in order to obtain high real returns for long term perspective.

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Şirkete Özel (Internal) Note: Management Reporting: IFRS Financials excluding inflation accounting effect

TOPLINE HIGHLIGHTS

• AgeSA is the market leader in terms of Pension AuM since June 2015 among the private pension companies.
• Supported by the strong asset performance despite the volatility in financial markets Total AuM has reached 75.6 bnTL with 1.7m participants, including AE.

			AuM (mTL)	2.882	# of Total Participants	Total APE (mTL) *
			74%	75.640	1.572.677	8%	1.696.421		131%	3.743
							7%				1.156
Pension	1.408	43.502					980.728		67%
			913.092
								1.618
(inc. Auto
Enrolment)							9%		692	179%	2.586
		42.094		72.758		659.585		715.693	926
		2021		2022		2021		2022	2021		2022

Source: Pension Monitoring Center 31.12.2022

*Before opt-out

• AgeSA is the market leader in terms of Total Life & PA Premium among private companies as of December'22
• Total Protection gross written premiums reached 3.612 mTL; higher than prior year by 80% continuing the momentum in a sustainable manner.

Credit Linked Life Protection	Non-Credit Linked Life	Personal Accident GWP (mTL)
	GWP (mTL)	Protection GWP (mTL)		42%
	63%		97%
943	1.541	1.014	1.994	54	77
2021	2022	2021	2022	2021	2022
		Total Protection GWP (mTL)
			80%

2.011	3.612
2021	2022

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Şirkete Özel (Internal) Note: Management Reporting: IFRS Financials excluding inflation accounting effect

AGESA MANAGEMENT REPORTING SEGMENT RESULTS

(mTL)	2021	2022	Change
Life Protection	765	1.334	74%
Personal Accident	31	41	34%
Savings	5	14	186%
Pension	349	547	57%
Total Technical Income	1.150	1.936	68%
Total General Expenses	-621	-1.152	85%
Net Technical Profit	529	784	48%
Total Investment & Other Income	200	602	200%
Total Tax	-188	-259	37%
Net Profit	541	1.127	108%

• Total technical income grew by 68% mainly driven by protection and pension profitability growth.
• • Pension technical profit increased by 57% mainly due to higher total fund management fee regarding AuM increase
  • Life protection technical profit increased by 73% due to increase in premiums thanks to both our credit linked and non-credit linked RoP products.
  • Personal accident technical profit increased by 34% due to higher premium production.
• General expenses are 1.152 mTL with a yoy increase of 85% mainly due to high inflationary environment for major cost items (i.e. Personnel, IT, Outsourcing, Consultancies)
• Total investment and other income is 602 mTL with a yoy increase by 200% mainly due to higher interest gains, returns and f/x rates, in addition to higher shareholders' fund.

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Şirkete Özel (Internal) Note: Management Reporting: IFRS Financials excluding inflation accounting effect

AGESA STATUTORY / SFRS SEGMENT RESULTS

(m TL)	2021	2022	Change
Life	375	553	48%
Non-Life	6	12	95%
Pension	-112	-431	286%
Net Technical Profit	269	134	-50%
Total Investment & Other Income	339	910	169%
Tax	-156	-169	8%
Net Profit	452	875	94%

• Net profit for the period is 875 mTL with an increase of 94% mainly due to growth in Life technical profit and financial income.
• Total net technical profit increase;
• • Life net technical profit is higher than prior year by 48% due to increasing volume; even though the SFRS profitability is negatively impacted from the commissions paid which are not deferrable in SFRS.
  • Non-life(personal accident) net technical profit after general expenses is higher than prior year by 95% mainly due to higher premium production.
  • Due to higher expense allocation, which is done according to the local regulation rules, pension net technical profit after general expenses is lower than prior year. Since new business sales commissions are not deferrable in SFRS, higher NB results in lower SFRS profit for the year.

BRIDGING FROM MANAGEMENT REPORTING TO STATUTORY PROFIT

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Şirkete Özel (Internal) Note: Management Reporting: IFRS Financials excluding inflation accounting effect