Annual Report - Anadolu Sigorta

Transcription

2014
ort
Annual Rep
Content
1 General Information
2 Corporate Profile
3 Our Vision, Our Mission, Our Corporate Values
4 Message from the Chairman
6 Message from the CEO
12 The Organization, Capital and Shareholder Structure of the Company
12 Organization Chart
13Capital and Shareholder Structure
13 Disclosures on Preferred Shares
14 Governing Body, Executives and
the Number of Employees
14 Board of Directors
16 Declarations of Independence by Independent Members of the Board of Directors
18 Executive Committee
20 Heads of Units Under the Internal Systems
20 Average Number of Employees by Categories During the Reporting Period
21 Financial Affairs and Actuarial Unit Managers
21 Financial Rights Provided to the Members of the Governing Body and Executives
21 Financial Rights
21 Other Means
24 Research and Development Activities of the Company
24 Research and Development Pertaining to New Services and Business Activities
26 Company Activities and Major Developments in Activities
26 2014-2015 Primary Goals, Policies
27 Information on the Company’s Investments
28 Internal Control System and Internal Audit Activities
28 An Assessment of 2014 by the Board of Inspectors
29 Internal Control System and an Assessment by the Governing Body
30 Information on Associates
30 Repurchased Own Shares by the Company
30 Disclosures Concerning Special Audit and Public Audit
30 Lawsuits Filed Against the Company and Potential Results
30 Disclosure of Administrative or Judicial Sanctions Against the Company and/or Board of Directors Members
30 Assessment of Prior Period Targets and General Assembly Decisions
30 Expenses Incurred in Relation to Donations and Grants and Social Responsibility Projects
31 Commitment to Social Responsibility
33 The Company’s Transactions with the
Risk Group
36 Financial Status
36 Summary Report by the Board of Directors
38 Financial Information and Indicators
40 2014 Economic Overview
44 An Overview of the World Insurance Industry
47 Developments and Changes in Legislation
50 An Assessment of Anadolu Sigorta in 2014
58 Assessment of the Company Capital and Comments
59 Profit Distribution Policy
62 Risks and an Assessment by the Governing Body
62 Risk Management Policies Adhered to by Types of Risks
65 Activities of the Committee of Early Determination of Risk
67 Other Matters and Financial Statements
67 Report on the Audit of Board of Directors’ Annual Report Based on Standards on Auditing which is a Component of the Turkish Auditing Standards Published by the Public Oversight Accounting and Auditing Standards Authority (“POA”)
70 An Assessment of the Board Directors by the Corporate Governance Committee
72 Corporate Governance Principles Compliance Report
85 Committees Operating Within Anadolu Sigorta and an Assessment by the Board of Directors
89 An Assessment of the Operation of the Independent Audit Firm in 2014 Activity Period via the Audit Committee
90 Human Resources Practices at Anadolu Sigorta
92 Agenda of the Annual General Assembly Meeting
93 Dividend Distribution Proposal
94 2014 Profit Distribution Table
95 2014 Annual Report Compliance Statement
96 Detailed Income Statement
98 31 December 2014 Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon
179 31 December 2014 Consolidated Financial Statements Together with
Independent Auditors’ Report Thereon
180 Information on Consolidated Subsidiaries
262 An Assessment of Financıal Standing, Profitability and Solvency
263 Information on Financial Structure
264 Summary Financial Information for the Last 5 Years Including the Reporting Period
General Information
Anadolu Anonim Türk Sigorta Şirketi
2014 Annual Report.
Corporate Title
Website
www.anadolusigorta.com.tr
Anadolu Sigorta Trade Registration No:
4593/557
Directory
Head Office
Address: Rüzgarlıbahçe Mah. Kavak Sok.
No: 31 34805 Kavacık/İSTANBUL
Tel: +90 850 744 0 744
Fax: +90 850 744 0 745
E-mail: bilgi@anadolusigorta.com.tr
Corporate Insurance Department
Tel: +90 850 744 0 744
Fax: +90 850 744 0 745
E-mail: ksm@anadolusigorta.com.tr
Motor Claims Department
Tel: +90 850 744 0 744
Fax: +90 850 744 0 182
E-mail: otohasar@anadolusigorta.com.tr
İstanbul Regional Branch
Address: Beytem Plaza Büyükdere Cad. 20/B
34394 Şişli/İSTANBUL
Tel: +90 850 744 0 744
Fax: +90 850 744 0 753
E-mail: bolge11@anadolusigorta.com.tr
Kadıköy Regional Branch
Address: K2 Plaza Sarıkanarya Sok. No: 14
34742 Kozyatağı/İSTANBUL
Tel: +90 850 744 0 744
Fax: +90 850 744 0 754
Mediterranean Regional Branch
Address: Konyaaltı Cad. No: 78
07050 ANTALYA
Tel: +90 850 744 0 744
Fax: +90 850 744 0 752
2 / Anadolu Sigorta Annual Report 2014
Western Anatolia Regional Branch
Address: Atatürk Cad. No: 92
Anadolu Sigorta Binası 2 35210 İZMİR
Tel: +90 850 744 0 744
Fax: +90 850 744 0 747
Middle Black Sea Regional Branch
Address: Kale Mah. Ziya Paşa Sok. No: 4
Kat: 7 55030 İlkadım/SAMSUN
Tel: +90 850 744 0 744
Fax: +90 850 744 0 750
Southern Anatolia Regional Branch
Address: Reşatbey Mah. 62029. Sok. 16/A
01120 Seyhan/ADANA
Tel: +90 850 744 0 744
Fax: +90 850 744 0 746
Central Anatolia Regional Branch
Address: Cinnah Cad. Farabi Sok. No: 43
06690 Kavaklıdere/ANKARA
Tel: +90 850 744 0 744
Fax: +90 850 744 0 749
Black Sea Regional Branch
Address: Karşıyaka Mah. 4 Nolu Sok. No: 479
61040 TRABZON
Tel: +90 850 744 0 744
Fax: +90 850 744 0 751
Marmara Regional Branch
Address: Odunluk Mah., Akademi Cad., Zeno İş
Merkezi, A Blok No10/5 Kat: 1 Daire: No: 6-10
16110 BURSA
Tel: +90 850 744 0 744
Fax: +90 850 744 0 748
Turkish Republic of Northern Cyprus Branch
Address: Memduh Asaf Sok. 8
Köşklüçiftlik Lefkoşa/TRNC
Tel: +90 392 227 95 95
Fax: +90 392 227 95 96
Tanzimat
(Reform)
Era-1925
s
e
l
p
m
a
x
E
t
Firs
e
c
n
a
r
u
s
n
I
f
o
in Turkey…
nce business
ra
su
in
f
o
eration for
• The birth
egulated op
-r
n
o
n
f
o
d
o
• The peri
al…
ation
foreign capit
m) Era, legisl
(Refor
ed
re Tanzimat
. Having turn
an State befo
non-existent
e
er
In the Ottom
w
e
nc
ate began
ra
St
su
in
an
t
m
ou
to
ab
Ot
e
or rulings
imat Era, th
ious scholars
ith the Tanz
s. While relig
,
westward w
various field
from sharia
in
s
te
ra
rm
pa
fo
se
re
nt
introducing
ecial covena
60 as
sp
18
a
in
as
d
e
he
nc
is
ra
bl
defined insu
regulation pu Regarded as a
dressed in a
ce.
it was first ad
e of Commer
dominated
ut
at
St
e
th
to
lations that
of the capitu
an addendum
e
ained
us
m
ca
re
e
be
ranc
tivity
1500s, insu
nce
foreigner’s ac
ry since the
reign insura
ito
fo
,
rr
te
89
18
an
m
In
quired
ion.
re
is
e
the Otto
rv
er
pe
w
su
l
ry
rnmenta
toman territo
Ot
e
in
nc
e
ra
beyond gove
at
su
er
in
16, when
ishing to op
companies w by getting a license. In 19 ates were illegal;
ic
ed
nd
er
sy
to be regist
registering,
sociation of
ere formally
ged to the As
d
companies w
ate was chan
days, the wor
ic
e
nd
os
Sy
th
e
In
th
.
of
ey
od to mean
so the name
ating in Turk
to
er
rs
Op
de
es
un
ni
lly
mpa
usua
Insurance Co
e country,
ble, as it was
that shook th
as objectiona
‘syndicate’ w
1908 strikes
. At the time,
e
ns
th
io
g
at
in
w
rpor
Follo
the Law of Co
‘labor union’.
by
surance
n
in
n
de
ig
id
fore
was forb
, all of them
rs
be
syndication
hen İşbank
em
w
,
m
25
19
ion had 81
lasted until
e
as
ph
the Associat
e Republic.
n
th
io
of
n
The Associat
proclamatio
e
th
r
te
companies.
af
e
su
insurance is
tackled the
1935-1950
+
s
e
l
t
t
e
S
m
Syste
g
n
o
r
t
S
s
w
o
r
G
s…
ce companie
onal insuran
Sigorta
ti
a
lu
n
o
f
d
o
a
r
n
e
A
b
num
dled by
n
a
h
o
li
fo
• Increasing
rt
po
c institution
• The publi
…
ty
re
ti
en
r other
almost in its
uragement fo
of Güven
ed as an enco
a serv
hment
the establis
adolu Sigort
with
hment of An
unded. With
fo
ring its ties
ve
be
se
to
y
e
el
er
The establis
et
w
mpl
n Group,
mpanies that
u Sigorta co
io
co
ol
e
Un
ad
e
nc
th
An
ra
of
su
ith
in
dw
part
company an
ny that was
companies
and foreign
rance compa
Türk Sigorta
mi-national
rketi, an insu
se
dustry
Şi
l,
i
in
e
ill
na
M
nc
tio
ı
ra
na
ad
su
g
İttih
ents in the in of Ankara Türk
shared amon
as
pm
w
lo
ve
lio
fo
de
t
rt
ding
the po
t importan
was the foun
WWII took
e of the mos
World War II
ents during
in 1939. On
the start of
e developm
d
tiv
an
business
ga
e
36
ne
nc
e
19
ra
a. Th
insu
between
adolu Sigort
the Turkish
d
An
in
an
by
rs
l,
i
el
re
et
w
su
rk
rein
Sigorta Şi
e industry as
and
However, no
the insuranc
umstances,
rc
ter its onset.
ci
af
e
ar
w
tim
their toll on
e
ar
th
w
r
e
of
s
er
de
w
ril
un
ts
s
pe
e
ke
ril
th
ar
m
e pe
had to cover
t against thes . Since London and Paris
nded suppor
lian market
ed
te
Ita
in
ex
e
ta
th
pe
ob
to
ro
be
Eu
not
rned
e war had
verage could
olu Sigorta tu
the end of th
years, Anad
sufficient co
lasted until
ring the war
at
gorta had
du
th
Si
h
d
u
ac
ol
rio
re
ad
pe
of
An
ed
out
d late 1940s.
This distress
ar
d from the
e.
w
nc
pe
to
ip
ra
rt
sh
su
fo
in
ls
m
ia
for re
economic co
the aid mater
ith
r
w
fo
e
ed
nc
ac
ra
pl
been re
e cargo insu
e third of th
provided on
shall Plan.
ar
M
e
th
r
U.S.A. unde
1925-1935 ital
p
a
C
l
a
n
o
i
t
Na
n
o
i
t
a
v
i
t
o
M
d
+ Action an
ce industry...
onal insuran
ti
a
n
e
th
f
o
s
e foundation
nts, laying th
e
c era…
-year
li
m
b
st
u
p
ve
e
in
R
f
o
blic from a 13 ough
a, early
rt
odern Repu
o
th
m
ig
al
a
,
S
• Inception
as
es
lu
d
iv
o
at
ge
d
iti
er
em
ry in
tion of Ana
lcük was
blic. Having
duty indust
rd unit in Gö
t of the Repu
rtake heavyya
en
de
ip
• Incorpora
un
.
hm
sh
is
to
st
bl
t
fir
ta
of the
as abou
and Ankara
the es
since
n İstanbul
re, Turkey w
construction
just one year
trip betwee
olving empi
til then. The
iving
It had been
ger aircraft
en
red as a diss
a needle un
ld be the dr
te
ss
as
ou
en
pa
h
w
d
st
t
uc
ha
fir
m
ha
it
so
,w
ing
the
war period
and then by
manufacture
national bank national identity in bank
s,
to
st
ay
y
fir
lit
ilw
e
bi
th
Ra
,
pa
e
k)
ca
at
a
an
St
of
e
şb
t
of
(İ
th
ui
n
ı”
io
rs
of
t
is
as
pu
lacking the
nk
perv
the
hmen
.
“Türkiye İş Ba
the establis
under the su
first phase of
nce business
carried out
followed by
rporation of
mpleted the
tional insura
saw the inco
ent. That co
ign trade was
na
ar
re
of
pm
ye
fo
n
lo
e
n,
io
ve
m
at
tio
de
sa
or
ta
ion that,
ic
rp
or
in
The
om
co
sp
op
in
on
g
an
e
tr
ec
lin
th
s
e
ai
n’
in
to
le
prev
e natio
ugh mar
of these
set an obstac
they had the
engine of th
nducted thro
. In the light
pital, which
siness, since
e. Mainly co
e companies
by foreign ca
insurance bu
nc
surance
ed
e
ra
in
at
th
and insuranc
l
su
in
of
na
in
m
n
n
tio
do
io
ig
na
at
re
mpanies
eti”, the first
ies paid to fo
the nationaliz
rk
r
on
Şi
fo
m
a
e
insurance co
re
rt
si
th
go
de
of
Si
ined in the
able in view
Anonim Türk
atürk.
Exporters jo
not be achiev
nk, “Anadolu
tafa Kemal At
ofits would
dation of İşba
ative of Mus
un
iti
fo
in
e
e
th
th
r
otherwise, pr
te
at
af
ed
ts, one year
as incorporat
developmen
of Turkey, w
the Republic
of
ny
pa
m
co
1960-1980 eness +
r
a
w
A
g
n
i
s
i
a
R
s
n
o
i
t
a
t
c
e
p
Growth Ex
of growth
-realization
n
o
n
,
ss
e
n
re
phase
growth.
f future awa
n, and
• A planned
and achieve
ation, lack o
y
iz
it
n
and migratio
iv
a
ct
rb
u
u
d
t
a
ro
tion moves
p
ts
the
za
p
ni
se
ith
m
a
ba
W
e
e
.
ur
tt
cr
70
to
A
19
•
tum
rives to in
d 3 million in
st
ded momen
s.
se
a
ad
es
as
rt
ts
en
rp
o
ar
en
su
ig
d
aw
S
em
n ha
future
al mov
• Anadolu
ul’s populatio
ion and soci
surance and
it
rently,
creased in
w constitut
1960, İstanb
on liras. Appa
ould gain in
8 million in
1960, the ne
nted to 2 billi
gradually. 1.
the society w
lopments of
growth
ou
at
ng
ve
ed
si
th
am
de
at
l
ea
ly
al
ip
fu
cr
ic
re
tic
pe
in
lit
ba
d
Po
as ho
the an
began
the 1970s ha
such,
e industry w
sues added,
of big cities
sums, and as
the middle of
economic is
the insuranc
populations
ached large
population,
ith periodic
collected by
inated
re
s
n
w
m
m
ld
s;
ba
do
iu
or
es
ur
lly
w
d
en
em
e
ia
se
ar
pr
th
nt
l
aw
ta
ta
of
increa
other parts
all efforts, to
stry was subs
tion of future
arce, and
in
ea
ite
du
sc
rs
cr
e
in
sp
re
e
e
er
de
su
th
w
,
th
r
e
in
d
er
by
, an
ranc
ed fo
Howev
me the ‘70s
ms collected
than expect
der the insu
Co
iu
bor, and
er
un
s.
la
em
ng
m
ed
lo
pr
ng
ct
ra
,
vi
ke
lle
og
nd
sa
co
d
t pr
r ha
would ta
d. The funds
s’ investmen
oductivity an
On the othe
ue
ie
pr
e.
y using
rs
tr
liz
el
ng
pu
un
ia
si
tiv
y
co
er
ea
ac
r
lic
at
cr
in
s fo
gan
n” po
did not m
ds aimed at
u Sigorta be
e largest fund the “import substitutio
ho
ol
th
et
gorta
ad
m
of
Si
An
e
u
ed
s,
ol
on
oy
ad
pl
1960
constituted
a result of
company. An
st half of the
olu Sigorta em
companies as
1965 went up
hines (IBM)
From the fir
in
ac
.
period, Anad
M
as
is
ng
ss
lir
th
hi
n
ne
yt
In
io
si
er
l.
by domestic
ill
ia
ev
m
ional Bu
were not cruc stable growth in spite of
oximately 40
the Internat
investments
iums of appr
its
eration with
maintaining
total net prem 10 years.
ks to a coop
:
in
an
d
74
th
de
19
gy
ee
d
lo
cc
an
su
in
65
chno
times its size
d between 19
offered by te
grew to six
leap forwar
the facilities
ly dramatic
the company
,
al
ci
ds
pe
or
w
es
r
an
he
made
74. In ot
n liras in 19
to 225 millio
1950-1960 structuring
e
R
+
a
r
E
w
Ne
ing policies…
on and lend
rary donati
rty era, arbit
a
stry, multi-p
e of the indu
as a rapid
su
is
n
io
is
50s, there w
a…
. From the 19
tions
46
ec
• The superv olicy of Anadolu Sigort
el
19
e
in
th
d
d
rio
re
p
y
ulti- party pe
ies, they ente
it
m
rt
rta
il
e
b
pa
go
th
a
Si
al
d
u
ic
st
re
ol
lit
e
te
• Th
ing of po
tion Anad
Turkey en
es. The dona
orations
the state fund
lation when
ng corp
n about
compani
the popu
no regulatio
d insurance
e risk of pulli
ard
segments of
rporated th
e there was
om banks an
to affect all
co
nc
fr
1960, the Bo
d
in
Si
y
te
ay
nl
s.
ns
M
ar
ai
ie
st
tio
m
lic
27
s
t
na
ic
of
e po
do
ppor
Polit
military coup the coup, appointed
r of insuranc
wever, these
e
asking for su
be
Ho
th
m
by
r
y.
s
te
nu
ar
e
nd
Af
om
fu
th
s.
50
ing
cust
rise in
obtained
d with
during the 19 that ruled Turkey follow
had become
means, and
ection time
es over this
lations aligne
by their own
tary officers
ies during el
had difficulti
, certain regu mpanies was enacted
rt
ili
a
es
m
rt
pa
su
of
go
al
is
p
Si
ic
t
u
lit
ou
en
ol
acem
the gr
e co
made to po
of fact, Anad
ision and pl
Committee,
d by Ziraat
n of insuranc
As a matter
with superv
tional Unity
e supervisio
as establishe
into politics.
dustry dealt
ncerning th
rged. The Na
ny, which w
in
co
raat Bank
ha
pa
e
Zi
w
sc
m
th
la
e.
di
n
co
ic
st
e
as
he
rv
fir
w
w
nc
e
se
d
of Directors
Başak insura
g insurance
In this perio
insurance. Th
in
as
s.
w
id
of
or
d
ov
ct
ea
rio
pr
re
ar
e
Di
pe
en
th
of
be
that
ed in
a new Board
rta had long
r highlight of
ere introduc
Anadolu Sigo
ry norms w
Code. Anothe
and to which
contempora
Commercial
ny
e
.
th
pa
m
of
60
co
n
19
e
io
g of
icat
rs of th
the beginnin
after the ratif
n shareholde
Sigorta from
the two mai
t of Anadolu
en
Bank, one of
ag
an
as
d acting
discontinue
1980-2000 + Technological
s
n
e
o
i
v
t
i
i
t
t
a
e
i
t
p
i
n
m
I
o
l
C
a
b
o
l
G
d
n
a
s
nt
e
m
e
c
n
a
v
d
A
gress, new
technical pro
reign
products, fo
mic policies,
d sustains
beral econo
li
o
e
n
y
b
ical profit an
d
n
ze
ch
ri
e
te
ct
n
o
ra
s
a
ces emphasi
• A period ch
e industry…
strength, pla
ination of th
ve
ti
m
ti
o
e
d
p
l
a
m
it
p
ca
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General Information / Corporate Profile
Corporate Profile
In 2014, Anadolu Sigorta expanded
its total premium production by 9.3%
year-on-year to TL 3,005 million and
controlled a 13.2% share of the overall
market among non‑life companies.
Anadolu Sigorta pursues its operations
via nine regional branches across the
nation and one branch in the Turkish
Republic of Northern Cyprus. The
company had 1,050 employees on its
payroll as at 31 December 2014.
Anadolu Sigorta registered its highest
premium production in the motor
vehicles branch with TL 824million,
followed by motor vehicle liability with
TL 780 million in 2014. Trailing these
two branches, in order, were fire and
natural disasters with TL 503 million,
illness/health with TL 280 million,
general losses with TL 239 million and
general liability with TL 105 million.
Turkey’s first national insurance
company and the pioneer in the sector
that will celebrate its 90th anniversary
in 2015, Anadolu Sigorta will keep
contributing to the advancement of the
insurance business in Turkey in the
light of its mission and vision. Anadolu
Sigorta will remain the insurance
company taken as benchmark in the
sector and further build on its solid
position.
General Information / Our Vision, Our Mission, Our Corporate Values
Our Vision, Our Mission, Our Corporate Values
Our Vision
Our Mission
• To make Anadolu Sigorta the
insurance brand preferred by
everyone who needs insurance.
In keeping with the deeply-rooted,
pioneering, honest, and solid corporate
values of Anadolu Sigorta to:
• To achieve a strength that makes it
a reference point in the worldwide
insurance industry as well.
• Lead the sector,
• Help create a broad public awareness
of insurance in Turkey,
• Implement a customer-focused
approach to service,
• Increase our financial strength to
international standards,
• Enhance the value of our company.
Our Corporate Values
A Company Entrenched In History:
• It was founded in accordance with
the instructions given by Mustafa
Kemal Atatürk.
• It is Turkey’s first national insurance
company.
• It has a powerful corporate structure
built on its knowledge of insurance
accumulated through the years.
Pioneership:
• Pioneer in creating product;
Integrity:
• It has ethical merits;
• Pioneer in technology;
• It inheres in transparency as
principle;
• Pioneer in service;
• With its self-renewing ability
preserves its pioneering position;
• It plays a pioneering role in social
responsibility.
• It fulfills its promises definitely;
• It never abandons human values.
Powerful Structure:
• It has a stable financial power;
• It has an extended and efficient
service network;
• It has a sophisticated and high
qualified human source;
• It gains power from the synergy
created by İşbank.
General Information / Message from the Chairman
Message from the Chairman
rong
th its st
i
w
n
o
the
rying
een car aining loyal to of
b
s
a
h
ta
e
ays rem
u Sigor
cal cod
Anadol nce 1925, alw lues and ethi
si
va
growth ted corporate ced.
o
ra
deep-ro hat it has emb
tt
conduc
The low growth performance of the
world economy passed on to 2015.
Loss of pace sustained by developing
economies such as China and India,
combined with the growth issues in
developed economies, escalated the
concerns about the world economy in
2014. Although the global economy is
anticipated to pick-up, even if slightly,
in the second half of 2014 and early
2015, international institutions make
the observation that the damage the
global crisis did to economies reduced
potential growth, and the world
embarked upon a period of lower
growth rates.
Turkey, despite decelerated growth
rate, maintains steadfast growth.
The negative impact Turkey’s
international risk perception
suffered due to the developments in
geopolitically problematic regions
coupled with the outcomes of the Fed’s
tapering on capital movements, and
our country found herself amid rapid
hot money outflow at the onset of 2014.
With the picture further aggravated
by the fluctuating exchange rates
and the depreciated Turkish lira,
the Central Bank of the Republic of
Turkey’s (CBRT) rate hike decisions,
and the ensuing narrowing of credit
and credit card installment facilities in
an effort to reduce the current deficit,
the national economy was dominated
by a stagnant atmosphere throughout
the year. Decelerated domestic
demand and increased exchange rates
allowed net exports to lend a positive
contribution to growth after a long
time, and the current deficit to decline
significantly. However, inflation
surged, as unemployment climbed once
again to two-digit numbers.
In the Turkey Regular Economic Note
released in December 2014, the World
Bank revised 2014 growth estimate
downwards from 3.5% to 3.1%,
whereas 2015 projection was kept
unchanged at 3.5%. The Note reports
that Turkey’s growth prospects in the
medium term depend on the recovery
of private investment and a resumption
General Information / Message from the Chairman
of productivity growth, which relies
on the implementation of structural
reforms.
It is common knowledge that the
Turkish economy is unable to attain
growth without producing current
deficit, and is fragile in the face of
interrupted capital inflows due to its
inherent imbalances. In a conjuncture
of decreased global risk appetite, the
financing of growth will constitute
a highly critical agenda item for the
Turkish economy, and it will only be
enabled with the implementation of
structural reforms in a number of
aspects starting with the economy
and ranging from education to justice.
Within this context, it is crucial to
capitalize on the opportunity offered
by the oil prices that are projected to
continue at low levels with respect
to the enforcement of the “Priority
Transformation Programs” prescribed
in the tenth development plan.
The Fed’s decisions, geopolitical
developments, the course of oil
prices, and domestic political
agenda may lead to volatile periods
in economy in 2015.
The conjuncture described above
indicates at potential significant
deviations during the year in various
economic parameters, including
credit rates, loan utilization, housing
and car sales, which are interrelated
with the production performance
of the insurance industry. Yet, in
general, the insurance sector is
expected to perform more positively
in 2015 than it did in 2014. Indeed,
the contraction that inflicted the
automotive, construction and other
associated sectors throughout 2014,
which was driven by domestic events,
increased interest rates, higher
special consumption tax rates and
the restrictions the BRSA imposed on
credit transactions, began slowing
down late in the year.
With her dynamic economy,
young population and expanding
middle class, Turkey presents very
attractive opportunities for the
insurance industry.
Looking at a remarkable window of
opportunity, the Turkish insurance
industry will be able to claim its
deserved position in the world
insurance business, provided that
rapid steps are taken. The positive
developments that have been going
on for a rather long time both in
terms of applicable legislation and
implementation are appreciated,
as they facilitate more powerful
performance of the Turkish insurance
industry and the attainment of 2023
targets.
The pioneer and grande école of the
industry
Anadolu Sigorta is the first national
insurance company in Turkey and
it is the pioneer of the industry. Our
company has been carrying on with
its strong growth since 1925, always
remaining loyal to the deep-rooted
corporate values and ethical code of
conduct that it has embraced.
In a fashion befitting our position in
the sector and the role we have taken
on, we have been, and are, working
to inculcate broad populations with
the notion that insurance is a major
necessity and also a part of life.
We touch our customers at 5,000
points across 81 provinces of
Turkey via İşbank branches and our
agencies. We are striving to present
our policyholders with the best,
innovative services. In addition, we
are targeting to produce added value
from alternative delivery channels,
making maximum use of the facilities
technology has to offer.
Anadolu Sigorta employees, who are
united in the deep-seated and solid
İşbank culture and who are committed
to providing a better and safer future
to our people based on the faith they
have in the job they are doing, will
keep working to win together with our
country.
We would like to thank our
policyholders, all our employees and
shareholders, with whom we are
hoping to share many more and better
days.
Sincerely,
Caner Çimenbiçer
Chairman of the Board of Directors
General Information / Message from the CEO
Message from the CEO
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Our sector experienced the slowest
growth of the past five years.
According to data published by the
Insurance Association of Turkey,
premium production of all insurance
companies combined rose by 7.3%
from TL 24.2 billion in 2013 to TL
25.9 billion in 2014. Of this amount,
TL 22.7 billion was generated on
non-life insurance and TL 3.3 billion
on life insurance. On the basis of real
growth that is calculated net of annual
inflation, however, the sector narrowed
down by 0.8%.
Having succeeded in attaining twodigit growth rates since 2009 and
having captured a high level in 2013
with a nominal growth of 22.2% and
a real growth of 13.8%, the industry
experienced the slowest growth of
the past five years in 2014. The rise
in premium production in non-life
insurance was 9.1% in nominal terms
and 0.9% in real terms.
The primary factor that led to the
limited growth in the insurance
industry was the 11.6% decline in
automotive sales, which resulted
from the restriction the economy
administration imposed upon
consumer loans in an attempt to
increase savings rate. This, of course,
negatively reflected on premium
production in the motor own damage
and motor third party liability
branches, which are the driving
engines of the industry.
The insurance industry generated
the highest premium production on
motor third party liability branch
last year, booking TL 5.5 billion. The
production in the motor own damage
branch amounted to TL 5.1 billion.
Together, motor own damage and
motor third party liability branches
were accountable for 41% of premium
production.
Fire and natural disasters branch
ranked third with a production figure
of TL 3.8 billion, followed by health and
general losses with respective figures
of TL 2.9 billion and TL 2.4 billion.
On the basis of sales channels of
insurance products, agencies take the
highest share with 58.9% in premium
production. The agency network was
followed, in order, by banks with 22.6%
share, brokers with 10.9%, head office
with 6.2%, and other sales channels
with 1.4%.
While there were three companies
with a premium production of above
TL 3 billion in 2014, the companies
that went over TL 1 billion in premium
production numbered four.
Looking at 2014, we observe that the
extreme price competition of previous
years is starting to change in favor of
a more profit-driven understanding.
Furthermore, the negative impact of
operating costs that cannot be reduced
upon profit margins is also better
understood.
The key to preserving profitability
and increasing productivity is,
undoubtedly, control over claims
processes. The focal point of strategy
plans devised for controlling claims
processes is the prevention of fake
claims and ensuring customer
satisfaction. Playing a major role
at this point are the companies the
industry collaborates with and
outsourced loss services. Primary
important considerations include the
adjustment of supplier firms to the
processes of insurance companies,
their maximization of the speed and
quality of their services, and pursuance
of customer satisfaction. We can talk
about ideal profitability levels only to
the extent that all of these are secured
and the expected improvements in the
coming period materialize.
Anadolu Sigorta attained 9.3%
growth in premium production in
2014
Anadolu Sigorta ranked third in the
sector with a premium production of
TL 3 billion that it has generated based
on 9.3% production growth it has
achieved in 2014.
With its 2014 production performance,
Anadolu Sigorta preserves its 13.2%
market share. Motor vehicles branch
continued to claim the biggest share
of the total portfolio at 27.4%. This is
followed, in order, by motor vehicle
liability with 26%, and fire and natural
disasters branch with 16.7%.
We maintain our customer focus
We believe that customer management
processes need to be given priority so
that the insurance industry can get its
deserved share out of Turkey’s existing
economic growth. Accurate reading
of insurance customers’ attitudes and
their incorporation in strategies are
critical for customer satisfaction. In
a bid to strengthen the processes for
customers and sales channels, Anadolu
Sigorta uninterruptedly continues with
its investments in project, research and
development activities.
With our teams that analyze customer
needs and expectations, develop new
products accordingly, and reformulate
the existing products so as to best
respond to identified needs, we
undertake many activities ranging
from intelligible and plain policy
contents to offering the right product
packages to the right customers and
organizing advantageous campaigns
for our customers. Furthermore, we
continue with our publicity and social
media activities at full speed, whereby
we underline not only our products, but
also the importance of insurance.
Technology investment is a strategic
necessity
At Anadolu Sigorta, we are committed
to making optimum use of technology
on the axes of customer access, and
easy, high-quality and swift service
delivery. In this framework, we reflect
our innovative approach also in our
products and services.
We continuously carry on with our
innovative investments aimed at
further upgrading the customer
experience. With the “Claims Services
Hotline and Interactive Voice Response
System” and the “Online Claims File
Query Service” launched in 2014, we
have targeted to maximize customer
satisfaction.
Message from the CEO
Signing our name under an ambitious
application in mobile insurance, we
have introduced the new “Sigortam
Cepte” (“Insurance on My Mobile”)
mobile application that is compatible
with IOS and Android telephones.
This service gives Anadolu Sigorta
policyholders access to dozens of
services from a single screen, including
tracking their policy and claims data
and locating the nearest agency.
Intended to offer an interactive
experience, our “Sigortam Cepte”
application draws the attention also
with its customizable content and
enriched user-friendly design.
We are consolidating our
technological and innovative
character with digital channel use
Our company boasts an award-winning
corporate website, which gives users
easy access to information and acts as a
benchmark in the industry with its rich
content. In addition to our corporate
website, we also have risk analysis
service and different online facilities
such as the leaflet center for our
agencies. At present, we are in the final
stages of revamping these websites.
We have an active presence also on
digital media through our corporate
social media accounts opened with
the name Anadolu Sigorta. Our project
“Bir Usta Bin Usta” (One Master,
Thousand Masters) has a dedicated
website and an Instagram account. We
are using social media specifically to
increase brand awareness and enhance
communication with our target
audience.
We have also begun making more
frequent use of the digital media for
advertising and publicity purposes.
With our viral films developed
specifically for online media
as opposed to the conventional
advertising instruments, we are
receiving admiration, while keeping
the interest in our products and
services alive.
We enjoy distinctive competitive
strengths in bancassurance and
agencies channels
In view of the bancassurance dynamics
across the world, Turkey, undeniably,
has a long way to travel. However,
enjoying an increasing efficiency in
the insurance industry, bancassurance
has lately been serving to grow the
customer group that it is addressing
in retail and commercial fields, and in
turn, premium production. In parallel
with the expanding customer group,
types of products offered by the banks
are increasing at an equal pace in line
with the customer needs.
Within the framework of
bancassurance, Anadolu Sigorta works
in coordination with all bank branches
and its sales force in the field. Thanks
to increased awareness of insurance
and their growing experience, bank
employees are able to present new
solution proposals to diverse customer
groups that are aligned with their
expectations, and are instrumental
in achieving higher production and
profitability in this field through correct
risk selections.
Our high brand equity is an important
factor that contributes towards our
company’s strong agency organization.
Our agencies, which make up a
substantial portion of our sales
channels and are vital components
of the Anadolu Sigorta family, have
internalized our corporate values,
mission and vision. Our strong synergy
is underpinned by the capability to act
with shared wisdom with our agencies.
Our award-winning social
responsibility project leaves its fifth
year behind
Our project “Bir Usta Bin Usta” (One
Master, Thousand Masters) was named
the “Best CSR Social Solution 2014” at
the Corporate Social Responsibility
awards distributed within the scope
of the CSR Turkey Marketplace event,
co-organized for the sixth time in 2014
by the Corporate Social Responsibility
Association of Turkey (CSR Turkey) and
Kadir Has University.
Launched in 2010 by Anadolu Sigorta,
the project “Bir Usta Bin Usta” carried
its successful mission over to the new
fiscal year, while the courses held in
2014 were ‘Tile Working’ in Çanakkale,
‘Oltu Stone Working’ in Erzurum,
‘Art of Leather-Made Accessories’ in
Isparta, ‘Art of Felt-Made Accessories’
in İzmir and ‘Amber Working’ in
Şanlıurfa.
Under the project “Bir Usta Bin Usta”
that has been honored with a number
of national and international awards,
numerous masters-to-be were trained
to date. While participants receive
course completion certificates that
verify qualification as a master trainer
endorsed by the Ministry of National
Education upon graduation, the
courses are instrumental in keeping
local vocations alive on one hand,
and in creating new employment
opportunities, on the other hand.
Anadolu Sigorta: Dynamic and
forward-looking drawing on the
experience of 90 years
In setting its course, Anadolu Sigorta
is guided by service quality, product
diversity, and securing the balance
between premium production and
technical profitability on the basis
of fair price competition. In a bid to
increase the brand equity of Anadolu
Sigorta that has become synonymous
with trust owing to its character as a
pioneer for nine decades that has been
carrying the sector forward, we will
continue with our committed work,
hand in hand with all our employees,
towards our goal of improving
our market share while attaining
sustainable profitability in the year
ahead.
The young population of Turkey,
constantly increasing qualified human
resource potential and the new
regulatory arrangements governing
the insurance industry add to the
possibility that the interest of the
investors in Asia and Europe that
present decelerated consumption will
be directed towards Turkey. These
developments support our prediction
that the insurance industry will be in
leading and telling position in its own
geography in the future.
In this competitive environment,
risk-based pricing, formation of a
balanced portfolio, technology-backed
risk follow-up and management, and
the support to be lent by regulatory
arrangements will be key for profitable
and healthy growth of the market
players.
Our company continues to attach
importance to fundamental branches,
specifically motor own damage, health
and fire insurance. In addition to those,
we are targeting to increase our focus
on package products for the SMEs,
primarily professional and personal
liability policies, while building on our
strength in branches such as marine
and general liability insurance.
Backed by an experienced and
professional team, strong technological
and financial infrastructure, extensive
service platform, and an understanding
to constantly develop and upgrade
quality products and services, Anadolu
Sigorta is focused on the future.
I would like to extend my thanks and
my best wishes to our policyholders for
their unyielding trust, and to our team
and distribution/service organization
for their commitment and hard work,
who altogether make our company’s
consistently successful performance
possible.
Sincerely,
Musa Ülken
CEO
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The Organization, Capital and Shareholder Structure of the Company / Organization Chart
Organization Chart
Board of Directors
Coordination Department to the Board of Directors
Corporate Governance Committee
Audit Committee
Board of Auditors
Early Determination of Risk Committee
Chief Executive Officer
Musa Ülken
Risk Management and Internal Control Department
1st Deputy Chief Executive
Filiz Tiryakioğlu
Labor Law
Adviser
Ömer
Ekmekçi
Deputy Chief Executive
M. Metin Oğuz
M. Levent Sönmez
Erdinç Gökalp
Fatih Gören
Mehmet Abacı
Agency and
Channel
Management
Department
Motor Insurance
Department
Individual and
Commercial Insurance
Department
Actuarial Department
Legal
Affairs &
Subrogation
Department
Information
Technologies
Department
Bank
Insurance
Department
Health Insurance
Department
Corporate Insurance
Department
Enterprise
Architecture
Department
Accounting
and Finance
Department
Human
Resources
and Training
Department
Information and
Communication
Technologies Software
Development
Department
Regional Offices
Marine
Insurance Department
Reinsurance
Department
Non-Motor
Claims
Department
Board of Project and
Change Management
Risk Engineering
Department
Procurement
Department
Liability, Aviation and
Special Risks Insurance
Department
Management Reporting
Department
Corporate
Communication
Department
Southern Anatolia
Western Anatolia
Marmara
Central Anatolia
Middle Black Sea
Black Sea
Mediterranean
İstanbul
Kadıköy
TRNC Branch
Fire and Engineering
Insurance Department
Legal
Consultant
Samim Ünan
Headquarters
Consultant
Ahmet Hamdi
Başar
Motor
Claims
Department
The Organization, Capital and Shareholder Structure of the Company / Capital and Shareholder Structure
Disclosures on Preferred Shares
Capital and Shareholder Structure
Shareholder Structure (%)
Other
42.7
Milli Reasürans T.A.Ş.
57.3
Disclosures on Preferred Shares
No more preferred shares remained following the amendment to the Articles of Incorporation registered by the company on
11 April 2013.
Capital Increases and Their Sources
There were no capital increases in 2014.
Changes in the Articles of Association during 2014
At the Annual General Assembly Meeting held on 25 March 2014 based on the permission letters of the Republic of Turkey
Prime Ministry Capital Markets Board dated 27 February 2014, no. 29833736-110.03.02-412-2049, and of the Republic
of Turkey Ministry of Customs and Trade Directorate General of Domestic Trade dated 18 March 2014, no. 67300147431-02-2-413677-2725-1643, it has been agreed to amend “Article 4 – The Company’s Headquarters and Branches” of the
company’s Articles of Association; the said amendment was registered on 10 April 2014 and promulgated in the Turkish
Trade Registry Gazette issue 8551, dated 16 April 2014.
Governing Body, Executives and the Number of Employees / Board of Directors
Board of Directors
1
2
3
4
5
6
7
8
9
10
11
Information on Board of Directors Meetings:
During 2014, Board of Directors of Anadolu
Sigorta met 12 times and held its 1190th meeting
at the end of the year.
One member each was absent in two of these
meetings due to their justified excuses.
Ayşen Ayan
Board of Directors
Reporter
Topics discussed in the meetings generally
consist of the reports by the Board of Directors
Committees and by the Board of Inspectors,
executive reports, proposals laid down for
approval, informative memos, status reports
on the restructuring project, and working
study reports that deal with the bank insurance
activities.
The meeting documents are distributed to the
members approximately five days in advance of
the meeting date.
Governing Body, Executives and the Number of Employees / Board of Directors
1- Caner Çimenbiçer
Chairman
Born in 1952 in Bursa, Caner Çimenbiçer
graduated from the Business Administration
Department of the Faculty of Administrative
Sciences at the Middle East Technical University
in 1973. He began his career in İşbank in 1974 as
an assistant inspector on the Board of Inspectors.
After holding various positions in the Bank, he
was elected as Board of Directors member from
2005 to 2008 and the Chairman of the Board from
2008 to 2011. He also served as the Chairman
of the Board of Milli Re in 2008 and 2009. Mr.
Çimenbiçer was appointed as the Chairman and
Managing Director of Anadolu Sigorta on 1 April
2011 and was elected as the Chairman of the
Board on 25 March 2014.
2- Ahmet Doğan Arıkan
Deputy Chairman
Born in 1949 in Ankara, Ahmet Doğan Arıkan
graduated from Middle East Technical University
in 1971. He began his career as a systems analyst
at the General Directorate for the Turkish State
Meteorological Service and he joined İşbank in
1973. In 1974-1975 Ahmet Doğan Arıkan also
did his military service as a systems analyst and
programming officer. Returning to İşbank upon
completion of his military service, Ahmet Doğan
Arıkan continued to serve in various capacities
both in Turkey and abroad for about ten years,
becoming General Manager of an İşbank-owned
foreign trading company, Mepa Dış Ticaret
Sermaye Şirketi, in 1987. This was followed by
General Manager positions at two other bankowned companies: İzmir Demir Çelik Sanayi A.Ş.
in 1991 and Türkiye Şişe ve Cam Fabrikaları A.Ş. in
2000. Ahmet Doğan Arıkan retired from the latter
position on 16 September 2009. In the course of
his career, Ahmet Doğan Arıkan has served as a
Member or Chairman of the Boards of Directors
of firms in the textiles, automotives, maritime
shipping, lodging, tourism, manufacturing, and
banking industries.
3- Musa Ülken
General Manager and Director
Born in 1953 in Tarsus, Musa Ülken graduated
from the İstanbul Academy of Economic and
Commercial Sciences, Department of Economics
and Public Finance. He began his career at
Anadolu Sigorta Claims Department as a Clerk
on 01 November 1978 and subsequently rose
to the positions of Assistant Superintendent on
01 January 1984, Superintendent on 01 January
1988, Accident Department Superintendent on
07 February 1990, Chief Superintendent on 01
January 1991, Assistant Manager on 01 August
1992, Manager on 01 May 1993, Marmara Regional
Manager on 06 June 1997 and Kadıköy Regional
Manager on 01 June 2002. Having served in the
last position until 31 July 2004, Musa Ülken
became a Deputy Chief Executive Officer on 01
August 2004, I. Deputy Chief Executive Officer on
01 February 2008 and General Manager on May
2012.
4- Hakan Aran
Director
Born in 1968 in Antakya, Hakan Aran graduated
from the Middle East Technical University,
Department of Computer Engineering in 1990.
He started his career at İşbank as a Software
Specialist Trainee the same year, where he was
appointed as an Assistant Manager in 1999, and
promoted to Group Manager position in 2002.
He became Software Development Manager in
2005 and was finally appointed as Deputy CEO
on July 2008. Having completed his MBA on
scholarship from Başkent University, Institute
of Social Sciences in 2002, Hakan Aran has a
master’s dissertation on process management and
a model on Information Technologies supporting
customer-centric approach to banking. Hakan
Aran is currently Chairman of Boards at SoftTech
A.Ş., İş Net A.Ş., and Erişim Müşteri Hizmetleri.
5- Kubilay Aykol
Director
Born in Bolu in 1974, Kubilay Aykol graduated
from Middle East Technical University (Faculty
of Economics and Administrative Sciences)
department of Business Administration. He
began his career in 1997 at Türkiye İş Bankası,
as assistant inspector at Bank’s Board Member of
Inspectors. He was appointed as Merter branch
manager. He became an assistant manager in
Retail Banking Marketing Department in 2007. He
promoted as group manager in the Retail Banking
Marketing, unit of Micro Individual Segment in
2009. Since 2011, he has been serving as Retail
Banking Products Department Manager.
6- Faruk Karpuz
Director
Born in 1961 in Kahramanmaraş, Faruk Karpuz
began his career as an officer in Diyarbakır Branch
of İşbank in 1983. He later worked as assistant
to section head at İslahiye Branch in Gaziantep
(1988-1991), as section head at Erdemli Branch
in Mersin (1991-1995), as submanager at Elazığ
Branch (1995-1996), as manager at Cizre, Yenihal,
Akşehir, Fethiye and Afyonkarahisar branches
(1996-2007), as regional manager at Konya
Regional Directorate (2007-2012), and as manager
of Samsun Branch (2012). Faruk Karpuz currently
serves as manager in the SME and Commercial
Banking Sales Division, a position he holds since
August 2013.
7- R. Semih Nabioğlu
Director
Born in 1967 in Isparta, Semih Nabioğlu has
graduated from the Business Administration
department of Gazi Üniversitesi. He has got a
master’s degree in Accounting and Finance field
at the same university. In 1990, he started his
career as Assistant Specialist at İşbank, where
he still works as Unit Manager at the Equity
Participations Department. Semih Nabioğlu has
served as Board Member and Member of Board of
Auditors at various İşbank’s affiliates during his
career. Semih Nabioğlu is currently Board Member
at Anadolu Anonim Türk Sigorta Şirketi, Anadolu
Hayat Emeklilik and Milli Reasürans.
8- Fahri Kayhan Söyler
Director
Born in 1954 in Kadirli, Fahri Kayhan Söyler
graduated from Marmara University, Faculty
of Economics and Administrative Sciences,
Department of Economics. He started his career
as a Clerk at İşbank Galata Branch in 1976, where
he subsequently worked as a Service Officer and
II. Manager. He functioned as Assistant Manager of
Beşiktaş Branch in 1990, and as Branch Manager
of Yenibosna Branch in 1991, Dudullu Sanayi
Branch in 1992, Cağaloğlu Branch in 1996, Rıhtım
Kadıköy Branch in 1998, and Yenicami Branch in
2002. He served as a Deputy CEO from 2003 until
2010. Having voluntarily retired on 31 January
2010, Söyler also held memberships on the Board
of Auditors at Anadolu Sigorta, Executive Board
at Hizmet İşleri Ltd. Şti., Board of Directors at İş
Finansal Kiralama A.Ş. and was the Chairman of İş
Girişim Sermayesi A.Ş. during his career.
9- Prof. Savaş Taşkent
Director (Independent)
Born in İstanbul in 1943, Prof. Savaş Taşkent
graduated from the Faculty of Law, İstanbul
University. Having started his academic career
as an assistant in 1971 in the Department of
Law of the Faculty of Basic Sciences, İstanbul
Technical University (ITU), he received his
Ph.D. degree from the Faculty of Law of İstanbul
University, became assistant professor at ITU,
Faculty of Management and associate professor
in the Department of Labor and Social Security
Law and professor in the same Department in
1990. He served as the vice-dean and the vicerector at the same university. Savaş Taşkent
pursued research studies abroad, at Erlangen
and Heidelberg universities in 1982 and 1987. He
has numerous books and articles on labor law, as
well as many translations into Turkish from the
German law. Having assumed the position of the
head of the Department of Law at ITU, Faculty of
Management, Mr. Taşkent retired on 12 January
2010 due to age limit. He currently teaches “Labor
Law” and “Management Law” courses at the same
faculty. On 19 November 2013, Savaş Taşkent has
been assigned as advisor to the Rector related
to legal affairs by the ITU Rector. He also served
as an advisor to the Minister of Labor and Social
Security from 1991 until 2000, and attended
ILO Conferences held in Geneva from 1991 to
2003 as the advisor to the Government. Having
been elected as a Board of Directors member of
İşbank in 2005, 2008 and 2011, Prof. Taşkent has
been appointed, in tandem, as a member of the
Audit Committee in March 2008, TRNC Internal
Systems Committee in June 2009, and Corporate
Governance Committee in February 2013. He
resigned from İşbank effective March 2014.
10- Hasan Hulki Yalçın
Director
Born in 1964 in Ankara, Hasan Hulki Yalçın
holds a degree in Economics from the Middle
East Technical University and a Master’s Degree
in International Banking and Finance from the
University of Birmingham (UK). After serving
in various positions and capacities with İşbank
for fourteen years, he joined Milli Re in 2003 and
subsequently took part in a number of professional
training programs abroad. He has been appointed
as a member of Board of Directors and General
Manager on January 16, 2009. Hasan Hulki Yalçın
is also serving as a member of Board of Directors
in the Insurance Association of Turkey.
11- Assoc. Prof. Atakan Yalçın
Director (Independent)
Born in 1971 in İstanbul, Associate Professor
Atakan Yalçın is on the faculty of School of
Economics and Administrative Sciences at
Özyeğin University. He previously was on the
faculty of Koç University and has held visiting
positions at Brandeis University and Boston
College. Dr. Yalçın received an MBA degree from
Cox School of Business at Southern Methodist
University in 1996, and a Ph.D. degree in finance
from Carroll School of Management at Boston
College in 2002. Dr. Yalçın has taught courses in
Investment Management, Derivatives Securities
and Financial Management. His research interest
is in empirical asset pricing and empirical
aspects of financial economics. His work has
been published in such journals as the Journal
of Empirical Finance, Journal of Banking and
Finance, Journal of Financial Research, Quarterly
Review of Economics and Finance, and the
Journal of Marketing. Dr. Yalçın is a member of the
American Finance Association, Western Finance
Association, Financial Management Association
and the CFA Institute.
Governing Body, Executives and the Number of Employees / Declarations of Independence by Independent Members of the Board of Directors
Declarations of Independence by Independent
Members of the Board of Directors
15 April 2014
To: Anadolu Anonim Türk Sigorta Şirketi Corporate Governance Committee
I hereby declare that I satisfy the criteria of independence pursuant to applicable legislation within the framework of the criteria
covered in the Communiqué on the Determination and Implementation of Corporate Governance Principles, and submit my
candidacy as an independent member of the Board of Directors of Anadolu Anonim Türk Sigorta Şirketi.
Yours sincerely,
Prof. Savaş Taşkent
03 March 2014
candidacy as an independent member of the Board of Directors for your consideration at the General Assembly Meeting of
Anadolu Anonim Türk Sigorta Şirketi to be convened on 25 March 2014.
Yours sincerely,
Assoc. Prof. Atakan Yalçın
Governing Body, Executives and the Number of Employees / Declarations of Independence by Independent Members of the Board of Directors
03 March 2014
candidacy as an independent member of the Board of Directors for your consideration at the General Assembly Meeting of
Anadolu Anonim Türk Sigorta Şirketi to be convened on 25 March 2014.
Yours sincerely,
Prof. Turkay Berksoy
Governing Body, Executives and the Number of Employees / Executive Committee
Executive Committee
1
2
3
4
5
6
7
Governing Body, Executives and the Number of Employees / Executive Committee
1- Musa Ülken
General Manager
Born in 1953 in Tarsus, Musa Ülken graduated
from the İstanbul Academy of Economic and
Commercial Sciences, Department of Economics
and Public Finance. He began his career at
Anadolu Sigorta Claims Department as a Clerk
on 01 November 1978 and subsequently rose
to the positions of Assistant Superintendent on
01 January 1984, Superintendent on 01 January
1988, Accident Department Superintendent on
07 February 1990, Chief Superintendent on 01
January 1991, Assistant Manager on 01 August
1992, Manager on 01 May 1993, Marmara Regional
Manager on 06 June 1997 and Kadıköy Regional
Manager on 01 June 2002. Having served in the
last position until 31 July 2004, Musa Ülken
became a Deputy Chief Executive Officer on 01
August 2004, 1st Deputy Chief Executive Officer
on 01 February 2008 and General Manager on May
2012.
2- Filiz Tiryakioğlu
1st Deputy Chief Executive
Agency and Channel Management Department
Bank Insurance Department
Human Resources and Traning Department
Corporate Communications Department
Born in 1967 in İstanbul, Filiz Tiryakioğlu
graduated from Anadolu University, Faculty
of Business Administration, Department of
Business Administration. She started her career at
Anadolu Sigorta as a Clerk at the Fire Department
on 16 September 1985. She rose to Assistant
Superintendent position at the same department
on 01 January 1990. She was appointed to the
Claims Department on 01 February 1993 as
Superintendent, then rose to Chief Superintendent
on 01 May 1996, and Assistant Manager on
01 March 1998 at the same department. She
became a Manager at the Training Department
on 01 June 2000 and was then appointed as the
Human Resources and Training Manager on 01
August 2004. She was appointed as Deputy Chief
Executive Officer on 01 February 2008 and 1st
Deputy Chief Executive on 25 December 2013.
3- Mehmet Metin Oğuz
Regional Offices
TRNC Branch
Motor Insurance Department
Health Insurance Department
Born in 1959 in Çanakkale, M. Metin Oğuz
graduated from Middle East Technical University,
Faculty of Arts and Sciences, Department of
Physics and Mathematics, and holds a master’s
degree from Marmara University Institute of
Banking and Insurance, Department of Insurance.
M. Metin Oğuz began his career at Anadolu
Sigorta as a Clerk in the Accident Department
on 16 October 1985 and subsequently rose to
Assistant Superintendent on 01 February 1989,
Superintendent on 01 February 1992, Chief
Superintendent on 01 February 1995, Assistant
Manager on 01 May 1997, Manager on 01 March
1998, and Motor Insurance Manager on 01 June
2002. Having served in the last position until 31
July 2004, M. Metin Oğuz became a Deputy Chief
Executive Officer on 01 August 2004.
4- M. Levent Sönmez
Individual and Commercial Insurance Department
Corporate Insurance Department
Marine Insurance Department
Risk Engineering Insurance Department
Liability Aviation and Special Risks Insurance
Department
Fire and Engineering Insurance Department
Born in 1962 in Ankara, M. Levent Sönmez
graduated from İstanbul Technical University,
Faculty of Maritime Studies, Department of Marine
Engineering in 1985, got his master’s degree in
“Contemporary Management Techniques” from
Marmara University & Maine University and
completed the “SITC (Swiss Re) Marine Insurance”
program. Having participated in various training
programs in Turkey and abroad, M. Levent Sönmez
also holds “Chartered Insurance Institute/London
Dip. CII” degree. He started his career at Anadolu
Sigorta as a Specialist at the Marine Department
on 01 May 1991 and continued working with
same title till 30 April 1996. He subsequently
rose to Specialist position on 01 March 1994,
Chief Superintendent position on 01 May 1996,
Assistant Manager on 01 October 1997, and
Manager on 01 May 1999. M. Levent Sönmez has
become Bakırköy Regional Manager on 01 June
2002 and Kadıköy Regional Manager on 01 August
2004. He has been appointed as Deputy Chief
Executive Officer on 01 February 2008.
5- Erdinç Gökalp
Enterprise Architecture Department
Reinsurance Department
Procurement Department
Management Reporting Department
Born in 1967 in Ankara, Erdinç Gökalp graduated
from Kuleli Military High School and Turkish
Military Academy, Department of Business
Administration. He then got his master’s
degree in insurance from Marmara University,
Institute of Banking and Insurance. During his
employment with Anadolu Sigorta, he earned the
Atatürk scholarship granted by TSB (Insurance
Association of Turkey) and pursued his studies
abroad. Having started his career at Anadolu
Sigorta as Specialist at the Marketing Department
on 01 May 1991, Erdinç Gökalp was appointed to
the Reinsurance Department on 23 September
1991, rose to senior specialist position and
continued working till 30 April 1996 with the
same title. He promoted to Chief Superintendent
position on 01 May 1996 and to Assistant Manager
position on 01 October 1997, he was appointed
to the Marketing Department. Erdinç Gökalp
was appointed to the Accident Department on
26 December 1997 with the same title. He rose
to the position of Manager and was assigned to
the Reinsurance Department on 01 July 2001.
Erdinç Gökalp has been appointed as Deputy Chief
Executive Officer on 01 February 2008.
6- Fatih Gören
Legal Affairs & Subrogation Department
Accounting and Finance Department
Motor Claims Department
Non-Motor Claims Department
Born in 1969 in Ankara, Fatih Gören graduated
from Ankara University, Faculty of Political
Sciences, Department of International Relations.
He worked as a Specialist at Retail Banking and
Agricultural Loans Departments at Ziraat Bank
between 1991 and 1994. Having joined Anadolu
Sigorta as an Assistant Inspector on the Board
of Inspectors on 01 November 1994, Fatih Gören
rose to Senior Inspector on 01 November 1997 and
grade 3 Inspector on 01 November 1998. He was
appointed as Assistant Manager to the Accounting
and Finance Department on 01 June 2000, where
he was promoted to Manager position on 01
August 2004. Fatih Gören has been appointed as
Deputy Chief Executive Officer on 01 February
2008.
7- Mehmet Abacı
Information and Communication Technologies
Informations Technologies Department
Software Development Department
Board of Project and Change Management
Born in 1967 in Ankara. Mehmet Abacı, graduated
from the Department of Metallurgical and
Materials Engineering, Faculty of Engineering at
Middle East Technical University in 1991. Starting
his professional career at İşbank IT Department as
a Software Specialist the same year, Mehmet Abacı
was appointed as Assistant Manager in 1999, and
Unit Manager in 2004. He was promoted as Deputy
Chief Executive Officer at SoftTech in 2008, and
became Solution Development Manager and
Project & Change Manager at İşbank in 2010 and
in 2011 respectively. Mehmet Abacı was appointed
as Deputy Chief Executive Officer of SoftTech for
a second term, on 1 January 2011. As of June 2012,
he took office at Anadolu Sigorta as Deputy Chief
Executive Officer.
Governing Body, Executives and the Number of Employees / Heads of Units Under the Internal Systems
Average Number of Employees by Categories During the Reporting Period
Heads of Units Under the Internal Systems
Dr. İbrahim Erdem Esenkaya
Chairman of the Board of Inspectors
Born in 1969 in İstanbul. İbrahim Erdem Esenkaya
graduated from İstanbul University, Faculty
of Political Sciences, Department of Public
Administration. He then completed a master’s
degree without dissertation in the graduate
program for the management of financial
institutions at İstanbul University, Faculty of
Business Administration, Institute of Business
Administration. He earned his master’s degree
in business management and organization, and
his doctorate degree in accounting and auditing
from the Institute of Social Sciences at the same
university. He started his career at Anadolu
Sigorta as an Assistant Inspector at the Board of
Inspectors on 01 May 1995 till 31 May 2001. He
was appointed to the Accounting and Finance
Department on 01 June 2001 as an Assistant
Manager and to Internal Audit Department on
01 January 2005 as a Manager. İbrahim Erdem
Esenkaya has been appointed as the Chairman of
the Board of Inspectors on 01 June 2007.
Ömer Altun
Risk Management and Internal Control Manager
Born in 1970 in Malatya. Ömer Altun graduated
from Hacettepe University, Faculty of Science,
Department of Statistics. He began his career
at Anadolu Sigorta as a Clerk at the Accounting
and Finance Department on 01 May 1997, where
he subsequently rose to Specialist position on
01 February 1998 and continued working with
same title till 30 November 2005 and then he rose
to Assistant Manager position on 01 December
2005. On 01 February 2008, Ömer Altun has been
appointed as a Manager to the Risk Management
and Actuarial Department, which was renamed
to Risk Management and Internal Control
Department within the scope of the restructuring
of internal systems organization. He serves as the
Chairman of Anti-Money Laundering/Combating
the Financing of Terrorism (AFL/CFT) Committee
under the Insurance Association of Turkey.
Average Number of Employees by Categories During the Reporting Period
Senior level managers
Managers
Consultants
Middle level managers
Specialists/Officers/Other employees
Total
2014
7
37
3
142
799
988
Financial Affairs and Actuarial Unit Managers
Financial Rights Provided to the Members of the Governing Body and Executives / Financial Rights, Other Means
Financial Affairs and Actuarial Unit Managers
Murat Tetik
Accounting and Financial Affairs Manager
Born in 1968 in Eskişehir, Murat Tetik graduated
from İstanbul University, Business Administration
Department (English) and started his career in
our company on 01 May 1997 as an Assistant
Inspector on the Board of Inspectors. He was
promoted to Senior Assistant Inspector on 01
May 2000, to Class III Inspector on 01 June 2001,
to Class II Inspector on 01 June 2003, and to
Vice Chairman of the Board of Inspectors on 01
August 2004. He was appointed as an Assistant
Manager to the Accounting and Financial Affairs
Department on 01 January 2005, where he rose
to the position of Manager on 01 February 2008.
He is a member in the Insurance Association
of Turkey Financial Accounting Inspection and
Research Committee.
Taylan Matkap
Appointed Actuary/Manager
Born in 1978 in Antakya, Taylan Matkap
graduated from Ankara University, Department
of Statistics and completed his master’s degree in
the Department of Actuarial Science and Finance
at Boston University. He is currently pursuing
his doctorate studies at İstanbul University,
Department of Labor Economics and Industrial
Relations. He started his career at Anadolu Sigorta
on 01 December 2008 in appointed actuary/
manager position at the Actuarial Consultancy
Unit, and he has been transferred to the Actuarial
Department with the same title on 28 February
2011. In tandem with his post as the Secretary
General of the Actuarial Society of Turkey, Taylan
Matkap is responsible for improving the relations
with the Actuarial Association of Europe (AAE)
and the International Actuarial Association (IAA)
on behalf of the Society.
Financial Rights Provided to the Members of the Governing Body and Executives
Financial Rights
In the fiscal year ended on 31 December 2014, TL 4,949 in total has been provided in remunerations and similar benefits to the
governing body and senior executives such as the Chief Executive Officer and Deputy Chief Executive Officers. Further details are
presented in the relevant section of financial notes.
Other Means
The expenses incurred for the members of the company’s governing body and senior executives under other means such as business
related entertainment and travels amounted to TL 197 thousand.
1984
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Research and Development Activities of the Company / Research and Development Pertaining to New Services and Business Activities
Research and Development Pertaining to New Services
and Business Activities
• In 2012, bookkeeping and collection
transactions of Istanbul Regional
Branches and Health Insurance
Department were centralized
under the Accounting and Finance
Department (AFD) in keeping
with the targeted centralization
of bookkeeping and collection
transactions. Forming the next step
under the initiative, bookkeeping
and collection transactions of Middle
Black Sea and Mediterranean Regional
Branches were also centralized under
the AFD in 2013. With the migration
of the bookkeeping and accounting
transactions of the Central Anatolia,
West Anatolia, Marmara, Southern
Anatolia and Black Sea Regional
Branches to the AFD, centralization
has been completed for all regional
branches of Anadolu Sigorta in 2014.
• Legal affairs were centralized under
the Legal Affairs and Subrogation
Department (LASD) in order to
increase the efficiency and speed of
legal processes in regional branches.
• Situated in Merter, İstanbul Regional
Office was relocated to the office
in Şişli Beytem Plaza that enjoys
a central location, which has been
renovated in the same concept with
the Head Office.
• Under the initiative aimed at enabling
callers to easily access the required
service by dialing a single number,
the switchboard numbers for the
Head Office and regional branches
were eliminated, and Anadolu Sigorta
contact number at 0850 744 0 744
was introduced incorporating the
new announcement structure. In this
way, “Single Number – Single Menu”
implementation went live for nonclaims topics.
• Through improvements that
entailed provision of a single point
of contact for customer demands for
replacement vehicles, the process was
accelerated and customer satisfaction
was enhanced.
• Holding ISO 9001 Quality
Management System certification
since 2004, Anadolu Sigorta executes
processes with an eye on constant
improvement and development
within the frame of quality standards.
Work was carried out to launch a
web-based, more flexible and more
user-friendly application to replace
the existing Electronic Quality
Management System application,
which performs a significant function
for ensuring the continuity of the
Quality Management System at the
company, as a result of which the
relevant application was introduced.
• No irregularities were found in the
external audit conducted within
the scope of ISO 9001 2008 Quality
Management System, resulting in an
extension of the quality certification.
• As a result of joint efforts aimed at
creating a closer, one-to-one and
constantly interacting working
environment between İşbank and
Anadolu Sigorta and at enriching the
bancassurance transactions, Anadolu
Sigorta Bank Sales Leaders have
been assigned who will work out of
İşbank’s regional sales offices.
Research and Development Activities of the Company / Research and Development Pertaining to New Services and Business Activities
• Within the frame of efforts to improve
the Anadolu Sigorta Corporate
Information Portal, the section of
the existing Portal designed for
agencies has been rearranged, and
put into service as an Extranet Portal.
In addition, the legislation and
publications section on the Intranet
has been revised.
• Agencies Telephone Directory was
put into use for giving easier access
to contact numbers of the agencies
and their employees by incorporating
the agencies in the company phone
directory.
• The annual desk exercise was
carried out, which is required to
be performed within the scope of
Business Continuity Management
System activities. In the exercise, two
different scenarios were applied,
assessing the Incident Response
Team, which is formed by senior
management, and the departments
supporting this team, with respect
to their preparedness in case of an
incident causing interruption to
business processes.
• With units previously operating out
of different locations now brought
together under the Head Office roof
in Kavacık, the coordination, control
and management of policy printing
and correspondence tasks, which used
to be executed individually, are now
handled centrally by the Procurement,
Support and Construction
Department. The move was intended
to centralize these functions and allow
swifter and uniform action in cases
affecting these tasks.
• Archived auto and non-auto claims
documents have been revised,
resulting in improved archiving
processes and reduced number of
documents to be archived.
• ASOS, the new production and
collection platform, was introduced
with the personal health product. In
addition, it was decided to centralize
medical assessment and operational
transactions involved in personal
health insurance proposal and policy
production transactions under the
Health Insurance Department. The
purpose is to furnish faster service
to all sales channels and customers,
eliminate the potentially varying
approaches in medical assessments,
and ensure a more effective operation
in terms of workforce with the central
team.
Company Activities and Major Developments in Activities / 2014-2015 Primary Goals, Policies
2014-2015 Primary Goals, Policies
For all countries, developed or
developing, the level of economic
development and the development
level of insurance industry move
in parallel to a significant extent.
Particularly in developed countries,
the insurance industry is considered
as an important funding source for
the economy. Insurance and private
pension sector, which is an important
actor of the financial services market,
lends significant contributions to
the national economy, as it provides
efficient use of sources and also
serves to increase savings. Fulfilling
the functions of providing coverage
and enabling savings in our national
economy, insurance and private
pension sector keeps growing
consistently every year. In addition
to these developments, the global
economic and political risks that
have been growing in recent years,
combined with natural disasters,
obligate people to take measures
against these risks. Insurance, by
nature, comes at the top of the ways
to handle these risks. The altered
perception of the society, along with
the urge to be protected against risks,
caused insurance activities to increase
in Turkey. Although it is observed that
the insurance industry in our country
is not in the desired magnitudes
when compared with other parts of
the world, the share of the premium
production of the Turkish insurance
industry to GDP increased at a growing
pace in 2012, 2013 and 2014. In 2014,
banks maintained their dominance
in the financial services sector by
preserving their share of 87.4% (as at
June 2013) within the industry’s total
assets, and the share of the relatively
smaller insurance industry (inclusive
of private pension) remained flat at
4.6%.
The hike in exchange rates at the onset
of 2014 bore a short-lived impact on
the insurance industry, as it did on all
other sectors. This impact reflected
on the balance sheets of businesses
as higher loss items. In addition,
policies issued in a foreign currency
automatically resulted in increased
premiums in this period. The recovery
in exchange rates allowed this effect to
be transient.
The industry attained growth also in
the reporting period, on the back of
the motor own damage product that
was diversified as compared with the
previous years as a result of revised
general conditions for this product.
New product development activities
gained speed in 2014. Under the new
regulation prepared in relation to
private health insurance by the T.R.
Prime Ministry Undersecretariat
of Treasury, policyholders who
have qualified for lifelong renewal
guarantee will not lose this entitlement
from now on. They will neither be
exposed to increased risk premiums
nor restricted scope in the event of an
illness. The regulation about online
comparison of premiums for motor
TPL policies introduced some positive
changes of practice for the sector;
accordingly, companies are required
to make available a premium querying
screen on their official websites for
motor TPL insurance, and they are
free to set basic insurance premiums
by provinces a on the basis of vehicle
types. Meanwhile, acquisitions and
mergers continued. The official merger
of Allianz Sigorta group and Yapı Kredi
Sigorta Group as of October 2014 is an
important event that will affect the
balances in the industry.
Looking at 2014, it is observed that the
extreme price competition of previous
years is starting to change in favor of
a more profit-driven understanding.
Furthermore, the negative impact of
operating costs that cannot be reduced
upon profit margins is also better
understood.
Company Activities and Major Developments in Activities / 2014-2015 Primary Goals, Policies, Information on the Company’s Investments
Moreover, Consumer Protection
Law no. 6502 was published in the
Official Gazette issue 28835 dated
28 November 2013 to be enforced
6 months later. The key change the
new law introduces with respect to
insurance companies is the expanded
scope of consumer transaction so as
to incorporate insurance transactions,
thus making insurance transactions
a consumer transaction. The
requirements in the New Consumer
Law went into force on 28 May 2014.
The new regulation on insurance
agencies made some revisions to the
qualifications of people who will work
as insurance agents, their authorities
and responsibilities, and principles
and procedures in relation to their
activities, while the former Insurance
Agencies Regulation was superseded.
In the period ahead, it is projected
that the insurance industry will be
compelled to adopt diverse decisions
regarding pricing and operational
approaches due to weak investment
returns and low interest rates.
Technology investments aimed at
supporting the growth and improving
risk management will become a
strategic necessity for the insurance
industry. In terms of technical
profitability, on the other hand, efforts
will gain speed for risk-based pricing
and well-balanced portfolios.
Information on the Company’s Investments
The company’s outlays in 2014 amounted to TL 5.5 million for projects carried out for revising basic insurance
implementations, enhancing operational efficiency within the scope of the company’s information and communication
technology investments. These projects are detailed under the heading “Research and Development Activities of the
Company”.
Internal Control System and Internal Audit Activities / An Assessment of 2014 by the Board of Inspectors
An Assessment of 2014 by the Board of Inspectors
Pursuant to the Regulation on the
Internal Systems of Insurance and
Reinsurance and Pension Companies,
the internal audit activity at our
company is carried out by the Board of
Inspectors reporting to our company’s
Board of Directors. The Board of
Directors reviewed and acquainted
itself with the 2014 Activity Report of
the Board of Inspectors.
In 2014, 25 headquarters units, 9
regional branches and 1 branch adding
up to 35 units in total were audited
and the resulting determinations and
assessments were reported.
Initiated in order to monitor the extent
at which the audited units fulfill the
requirements of the reports resulting
from the audits conducted, follow-up
audits continued to be carried out in
2014. A total of 31 follow-up audits
were conducted during 2014, 19 of
which resulted from 2013 audits.
Auditing of agencies persisted
pursuant to the Regulation on the
Internal Systems of Insurance and
Reinsurance and Pension Companies
during 2014, and 1,108 agencies were
audited, and the results were reported.
On the other hand, based on Articles
16/1 and 17/2 of the Regulation on
the Internal Systems of Insurance and
Reinsurance and Pension Companies,
audits were conducted at all of the
agencies that remain after eliminating
those that were dissolved during
the reporting period from the 2,791
agencies that were listed in the audit
programs approved by the Board of
Directors and planned to be audited in
the 2012-2014 period.
In line with the experiences derived
from agency audits, agencies were
continued to be assessed through
scoring based on the financial data
for the past three years, within the
frame of efforts to further expand
and strengthen the central auditing of
agencies and to create early warning
systems that correctly identify and
reveal the risk elements in advance.
In 2014, 24 studies were completed: 10
investigations, 6 examinations and 8
other studies.
As of year-end 2014, the Board of
Inspectors was staffed by 20 board
members consisting of inspectors,
senior assistant inspectors, and
assistant inspectors. With the aim to
support professional development of
the Board members and to expand
their professional knowledge, their
participation in various seminars,
meetings and training programs
in Turkey and abroad have been
facilitated. In this frame, efforts were
carried on also in 2014 so that the
members of the Board of Inspectors
obtain nationally and internationally
recognized professional certificates.
Within the scope of the work aimed at
enhancing the level of standard and
quality of audits conducted, “Regional
Branches Performance” initiative was
brought to a certain point, and then
to completion with the support of
relevant Head Office units. The same
started to be used in the 2014 Regional
Branch Audit Reports.
Developments are carefully monitored
to ensure that the audits conducted and
the reports subsequently issued take
account of the “International Standards
for Internal Audit”, are risk-based,
provide assurance for risk management
and contribute added value to our
company and necessary revisions and
changes are made accordingly.
The Board of Inspectors will keep
carrying out the activities within the
context of the internal audit program
prepared, as well as other activities
outside of this scope, based on the
fundamental approach for maximizing
the benefits expected from internal
auditing.
Internal Control System and Internal Audit Activities / Internal Control System and an Assessment by the Governing Body
Internal Control System and an Assessment by the
Governing Body
Pursuant to the provisions of the
“Regulation on the Internal Systems
of Insurance, Reinsurance and
Pension Companies” enforced upon
its publication in the Official Gazette
issue 26913 dated 21 June 2008, the
Risk Management and Internal Control
Department was set up in a structure
so as to be conducted and administered
directly by the CEO, and vested in the
powers and responsibilities that will
allow the Department to assess the
risk exposure and internal control
environment in an independent/
impartial and effective fashion.
The Board Director responsible for
Internal Systems is also responsible
toward the Board of Directors for
the formation of the Department and
ensuring, monitoring and coordinating
its operability, adequacy and
effectiveness.
The duties, powers and responsibilities
of the individuals charged with the
operation and activities of the Internal
Control system, and for conducting the
activities are defined in the relevant
Operating Guidelines released. The
internal control system is set up as a
separate mechanism independent from
the internal audit system, based on
applicable legislation and numerous
references available in national and
international literature.
Centralized internal control activities
do not eliminate or modify, in part
or in whole, the relevant operational
and supervisory responsibilities of
the employees who are in charge of
conducting and/or managing these
activities. The Board of Inspectors
separately oversees the effectiveness
and adequacy of the internal control
system.
Within the scope of establishing an
effective internal control system
that is aligned with the nature,
complexity and risk structure of
the company’s operations; duly and
efficiently managing, mitigating and
controlling the risks involved in the
company’s operations; and employing
a risk-focused approach to the
conduct and management of review,
control, monitoring, assessment and
reporting activities concerning the
activities of the company’s units, all
of the company’s key processes were
schematized, and risk-control matrixes
detailing the control points were
prepared, thus completing the system
documentation.
A Contingency Action and Funding Plan
has been designed, which specifies
the actions to be taken in the event
of a liquidity crisis sustained by the
company due to negative market
movements beyond its control,
unexpected macroeconomic events,
catastrophic or big-ticket claims
payments and other reasons.
With the aim to prevent the company’s
exposure to various perils of differing
scales (machinery breakdown, human
errors, theft, fire, explosion, state
of war, sabotage, natural disasters,
terrorist acts, power outages, etc.)
and the losses resulting therefrom,
the Business Continuity Management
System has been set up to recover
as quickly as possible from the
interruption caused by such perils
and to enable resumption of key
activities. Within the scope of the
System, Headquarters Emergency
Response Plan, IT Continuity Plan,
System Guidelines, Business Continuity
Plan and Incident Management Plan
were drawn up and published on the
Electronic Document Management
System. The operability of the said
plans is tested at certain intervals.
It was targeted to secure alignment
with COBIT (Control Objectives for
Information and Related Technology)
in the execution of information
systems processes and functions, and
the relevant project launched was
finalized as at year-end 2012. The
following headings were addressed
under the COBIT Alignment Project for
Information Technology Governance
and Information Technology Processes:
• Devising the Information Technology
(IT) Governance Model
• Creating the Governance Processes
• Formulating the IT Service
Development Processes
• Developing the IT Service Delivery
and Operation Processes
• Creating the IT Support Processes
• IT Audit Management.
Accordingly, the Information Systems
Management Committee was set
up, which will report directly to
the Executive Board and will be
responsible for IT strategy and
steering activities. The Information
Systems Management Committee
was established with the purpose
of managing information systems in
alignment with the company’s strategic
goals, establishing the policies,
procedures and processes for ensuring
information security, and efficiently
managing the risks arising from the
use of information systems. Basically
the Committee will define, asses and
report on the risks arising from the
use of information systems; create the
guidelines for the management of these
risks, establish and monitor relevant
controls.
It has been considered that the internal
control policies and procedures
introduced and the internal control
activities carried out are aligned with
the company’s nature, the complexity
of its operations and risk structure,
and possesses the minimum elements
of an efficient internal control system.
Information on Associates
The de facto scope of Anadolu Hayat Emeklilik A.Ş. covers engaging in individual or group private pension activities; setting
up pension funds in this framework; creating fund bylaws for the funds to be set up; executing pension contracts, annuity
contracts, portfolio management contracts, custody agreements with the custodian for safekeeping of fund assets; and
offering individual or group life or whole life insurance policies and accident policies in connection therewith, as well as all
sorts of life policies, and carrying out reinsurance operations in relation thereto.
The company has 20% stakeholding in Anadolu Hayat Emeklilik A.Ş.
31 December 2014
Book Value (TL)
Shareholding (%)
Anadolu Hayat Emeklilik A.Ş.
391,400,000
20.0
Repurchased Own Shares by the Company
None.
Disclosures Concerning Special Audit and Public Audit
The company undergoes independent audits conducted by the independent audit firm, Akis Bağımsız Denetim ve Serbest
Muhasebeci Mali Müşavirlik Anonim Şirketi (KPMG) on its semi-annual financial statements at six-month intervals and on
its annual financial statements annually, as well as consolidation audits performed by İşbank at the end of first and third
quarters of the year. Due to being an associate of the Bank, the company is also subject to the annual information systems
audits banks conduct at their consolidated entities. In 2014, T.R. Ministry of Finance Tax Inspection Board conducted an
examination on scrap sales collections resulting from the claims paid by our company for total loss or theft incidents.
Lawsuits Filed Against the Company and Potential
Results
Lawsuits brought against the company and their possible results are presented under the heading “42 – Risks” in the notes to
the financial statements.
Disclosure of Administrative or Judicial Sanctions
Against the Company and/or Board of Directors
Members
During 2014, there were no penalties and/or sanctions of material nature imposed against the company and/or Board of
Directors members on account of acts in violation of the legislation.
Assessment of Prior Period Targets and General
Assembly Decisions
All decisions adopted in the Annual General Assembly meeting held on 25 March 2014 have been carried out.
Our company acts on the principle of providing quality service and it has preserved its leading position in terms of market
share in line with its targets by furthering innovation and customer-orientation concepts.
Expenses Incurred in Relation to Donations and
Grants and Social Responsibility Projects
Our company acts in awareness of its social responsibility and spent TL 628 thousand during the reporting period. The
activities carried out within the frame of social responsibility are detailed under the heading “Commitment to Social
Responsibility”.
Expenses Incurred in Relation to Donations and Grants and Social Responsibility Projects/ Commitment to Social Responsibility
Commitment to Social Responsibility
Within the frame of its commitment to
social responsibility, Anadolu Sigorta
extends support to education, academic
activities, sports organizations, and
cultural and artistic events.
Anadolu Sigorta’s approach to social
responsibility projects can be summed
up as one that encompasses not only
customers or agencies but the whole of
Turkey as a social stakeholder, and one
that seeks to contribute to the entire
society on this axis.
Anadolu Sigorta believes that
organizations that grow stronger
thanks to the society should give
back to the same society. Therefore,
to Anadolu Sigorta, it is crucial to
construct its social responsibility
projects in a human-oriented and
sustainable format.
Aspiring to crown its 85th anniversary
with an extensive project in 2010,
Anadolu Sigorta designed a social
responsibility project aligned with
the corporate strategy and the
expectations of the target audiences.
The project was named “Bir Usta Bin
Usta” (One Master, Thousand Masters),
perfectly corresponding to its scope
and content.
The objective of the project “Bir Usta
Bin Usta” (One Master, Thousand
Masters) is to focus the public attention
on vanishing crafts and local values,
to revive these crafts, and to be
instrumental in letting professional
craftsmen and artisans pass on their
experiences to the future.
The project is conducted under the
technical advisory of the Ministry
of Culture, Research and Training
Directorate. During the course of
the project, the Ministry of Culture
proposes cities and city-specific crafts
that are about to vanish, identifies
the NGOs, and guides Provincial
Directorates of Culture.
Under the project, five cities and
callings are selected from among those
proposed by the Ministry of Culture
every year, and 15 to 20 trainees
receive training for each vocation. The
company aims to extend support to 50
vocations and a total of 1,000 mastersto-be over the course of 10 years.
Expenses Incurred in Relation to Donations and Grants and Social Responsibility Projects/ Commitment to Social Responsibility
”
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Selected cities and crafts within the
scope of the “Bir Usta, Bin Usta” (One
Master, Thousand Masters) project are
presented below:
2010
• Karagöz (Turkish shadow play)
Figuration/Bursa
• Meerschaum Carving/Eskişehir
• Edirnekâri Art (traditional painting
and varnishing of wood or leather)/
Edirne
• Kutnu (traditional silk-based cloth)
Weaving/Gaziantep
• Kazaziye (traditional jewelry made
with threads of gold or silver)/
Trabzon
2011
• Kargı Cloth Weaving/Çorum
• Silk Weaving/Hatay
• Stone Working/Mardin
• Bone Combs/Sivas
• Savatlı Silver Work/Van
2012
• Mother of Pearl Inlaying/Ankara
• Rug and Carpetbag Weaving/Kars
• Glassblowing/Muğla
• Earthenware Pottery/Nevşehir
• Woodblock Printing (on cotton or
silk)/Tokat
0
0
0
,
1
2013
• Wood Carving/Kahramanmaraş
• Traditional Carpet Weaving of
Gördes/Manisa
• Needlepoint Art of Namrun/Mersin
• Basketry/Rize
• Hand Weaving of Karacakılavuz/
Tekirdağ
2014
• Tile Working/Çanakkale
• Oltu Stone Working/Erzurum
• Art of Leather-Made Accessories/
Isparta
• Art of Felt-Made Accessories/İzmir
• Amber Working/Şanlıurfa
The courses that will be launched in
2015 within the scope of the project are
Local Damal Doll Making of Ardahan,
Traditional Accordion Boot Making
of Söke, Aydın, Traditional Silver
Threading of Bartın, Puppet Making of
İstanbul, and Wooden Walking Cane
Making of Devrek, Zonguldak.
Under the project, an exclusive
initiative is being carried in
collaboration with İz TV, a national
documentary channel, under which
the documentaries of the courses are
produced.
In 2011, Anadolu Sigorta carried
out a special initiative with İşbank
concerning microloans. Accordingly,
“Bir Usta, Bin Usta” (One Master,
Thousand Masters) trainees, who shall
have acquired the necessary technical
know-how during the training, will
be able to utilize the loan entailing
special conditions designed by İşbank,
by presenting the participation
certificates given at the end of the
training. In this way, Anadolu Sigorta
will be lending support not only to
vocational training, but also to efforts
aimed at helping the crafts survive.
Anadolu Sigorta collaborates
with TURMEPA (Turkish Marine
Environment Protection Association)
to prevent marine pollution and to
contribute to the combat against
pollution. Based on the protocol
with TURMEPA, the Association that
spends efforts to clean the marine
environment in Turkey receives a
share from the revenues generated
by the insurance coverage sold to any
type of vessel. The protocol for this
cooperation has been in force since
2011.
The Company’s Transactions with the Risk Group
The Company’s Transactions with the Risk Group
Within the framework of the applicable
provisions of the Turkish Commercial
Code (TCC), our company is a
subsidiary of İşbank Group [during
2014 fiscal year]. Pursuant to Article
199 of the TCC, the company’s Board of
Directors presented the declaration
below in the conclusion of the
affiliation report issued in relation to
its relations with the controlling
company or an affiliate thereof:
Commercial transactions the company
realized with its controlling
shareholder and other Group
Companies during 2014, which are
detailed in the report, fall within the
company’s field of activity and were
carried out on an arm’s length basis. In
all of the transactions the company
realized in 2014 fiscal year with the
controlling company and its affiliates,
any and all legal acts carried out in
favor of the controlling company or its
affiliate with guidance from the
controlling company, and any and all
actions taken or avoided in favor of the
controlling company or its affiliates in
2014 have been reviewed according to
the conditions and circumstances
known to us. We hereby declare that
our company did not sustain any such
loss on account of any transaction
arising according to conditions and
circumstances known in relation to
2014 fiscal year.
Details of the company’s transactions
with the risk group during 2014 and
related disclosures are presented in
Note no. 45 under the notes to the
financial statements in the present
report.
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Financial Status / Summary Report by the Board of Directors
Summary Report by the Board of Directors
Dear Shareholders,
Before presenting the 2014 financial
statement figures covering the
company’s 89th year of operation for
your approval and comments, we deem
it useful to recap the changes and
developments in economic life and the
insurance sector.
In 2014, global economic recovery lost
some pace. While the issues caused
by the global crisis in developed
countries continued to repress their
growth performances, growth in
developing countries remained low as
compared both to the pre- and postcrisis recovery periods. Accordingly,
economic growth in 2014 is estimated
to be in parallel with that of the
previous year and stand at 3.3%. In its
report published in January, the IMF
estimates growth rates of 1.8% and
2.4% for developed countries in 2014
and 2015, respectively. Growth rates
of developing economies for the same
years are forecasted as 4.4% and 4.3%,
respectively.
The US economy unexpectedly shrank
in the first quarter of 2014, but the
recovery in the ensuing periods
showed that the weakness was
transient. The Eurozone economy,
on another front, came to a point of
standstill in the second quarter of
the year in line with the weak course
of investments and negative export
performance, and the risks in relation
to decelerated growth still persist. The
anticipated subsided global demand
for oil due to weak economic activity
in the Eurozone resulted in declined
oil prices. While geopolitical problems
gained the foreground as downside
risks on global growth in the second
half of the year, the turmoils in the
Middle East, in particular, along with
the tension between Russia and
Ukraine, have been the key factors to
put pressure on global economy.
On the side of the Turkish economy,
prudential measures introduced by late
2013 and early 2014 in an effort to take
under control private consumption
and to curb current deficit resulted in
weakened domestic demand. Having
grown 4.1% in 2013, the Turkish
economy expanded by 2.8% in the first
three quarters of 2014 as a result of the
local elections, monetary tightening
and macro-prudential measures.
In the report published in November,
the IMF estimated the Turkish
economy’s growth rate at the end of
2014 at 3%. The report also made
the determinations that the rapid
growth of the Turkish economy came
at the expense of large external
deficits, making the economy sensitive
to changes in external financing
conditions, and that macroeconomic
policies were adjusted to maintain the
current situation rather than fixing
economic imbalances. The report noted
that the financial system preserved
its strong structure and the main risk
for Turkey remains a capital flows
reversal. The IMF report of January
2015, on the other hand, projected a
growth rate of 3.4% for Turkey in 2015
and 2016.
The decline in the growth of premium
production in the worldwide insurance
industry in 2013 persisted in the first
half of 2014 in line with low economic
growth rates. However, premium
production growth is expected to
increase progressively from the second
half of 2014, and to reach 2.5% at the
end of the year, and 2.8% in 2015.
With low losses and new capital
that joined the reinsurance market,
reinsurance costs showed a descending
trend in all branches in 2014.
Positive results in catastrophe and
non-catastrophe losses gave rise to
improved renewal conditions. In 2014,
catastrophes around the world caused
insured losses of USD 22 billion, which
is below the ten-year average.
Financial Status / Summary Report by the Board of Directors
Increased insurance capital and scarce
catastrophe losses kept the demand
for the reinsurance market flat,
and the insurance capital available
globally expanded by 6% in the second
quarter of 2014. Besides falling prices,
improvements were witnessed in the
reinsurance renewal terms of certain
insurance companies.
The Turkish insurance industry’s
growth trend in real terms that had
been going on since 2008 could not
be sustained in 2014 as a result of the
economy administration’s measures
intended to take private consumption
under control. As at end-December,
the insurance industry narrowed
down by 0.8% in real terms. A review
of industry data reveals that the real
reason for the broken trend is the life
branch that shrank by 10.7% in real
terms, whereas the non-life branch
captured a real growth of 0.8% in the
same period. The non-life segment,
in which our company belongs, is
projected to attain nominal growth
also in 2015.
Although the financial statements of
the non-life sector showed generally
positive results in 2014, the technical
losses that arose particularly in
liability branches were noteworthy.
Based on the data for the first nine
months of 2014, motor vehicle liability
branch that represents the largest
portion of the market share posted a
technical loss of TL 429 million. Motor
vehicles (own damage) branch, i.e. the
other motor vehicle insurance branch,
registered a technical profit of TL 569
million. Following motor own damage,
the highest profit generators in the
industry were, in order, fire with TL
255 million and personal accident with
TL 213 million. Technical profit figure
for all branches combined was TL 813
million, whereas net profit after tax
was TL 569 million.
Looking at our company’s financial
standing and operating results, our
assets grew by 16% year-to-year
to TL 3,773 million, while premium
production went up by 9.3% in the
same period to TL 3,005 million. Our
company also increased its market
share to 13.2% on the back of the
premium growth it has achieved. Motor
vehicles branch claimed the biggest
share of our total premium production
with 27.4%. This was followed, in
order, by motor vehicle liability with
26%, fire and natural disasters branch
with 16.7%, and health branches with
9.3%. Based on the positive results
attained particularly in fire, motor
vehicles and accident branches in 2014,
technical results performed positively
and the company booked a profit of TL
92.6 million gross and TL 71.6 million
net at the end of the year.
Our company’s goal in 2015 will be
to improve the concepts of quality
service, leadership, innovation and
customer-focus, and to sustainably
increase the success captured in
profitability.
Financial Status / Financial Information and Indicators
Financial Information and Indicators
3,252,770
Claims Paid
1,553,197
1,249,199
Shareholders’ Equity
1,019,833
913,016
Pretax Profit/Loss
Net Profit/Loss
500,000
92,642
500,000
67,462
71,560
67,462
2.95
3.01
Capital Adequacy Ratios
Premiums Received/Shareholders’ Equity
Shareholders’ Equity/Total Assets
Shareholders’ Equity/Technical Provisions
0.27
0.28
0.45
0.49
0.60
0.55
13
Claims Paid
(TL thousand)
Current Ratio
Liquidity Ratio
Premium and Reinsurance Receivables/Total Assets
Receivables from Agencies/Shareholders’ Equity
1.22
1.53
0.21
1.22
1.53
Claims Payment Ratio
0.62
0.66
0.77
0.75
0.56
0.60
0.78
0.74
Profitability Ratios
Loss-Premium Ratio
Cost Ratio
Combined Ratio (Loss-Premium Ratio+Cost Ratio)
Pretax Profit/Premiums Received
Financial Profit (Gross)(**)/Premiums Received (*)
Technical Profit/Premiums Received
0.25
1.03
0.03
0.05
0.04
(*) Including premiums transferred to the Social Security Institution
(**) In the calculation of the financial profit, investment income that has been transferred from the
non-technical division to the technical division was excluded.
13
14
Net Profit/Loss
(TL thousand)
0.24
Operational Ratios
Retention Ratio (*)
1,249,199
Asset Quality and Liquidity Ratios
Liquid Assets/Total Assets
14
71,560
Paid‑in Capital
67,462
3,773,391
1,019,833
2,749,704
(TL thousand)
913,016
3,004,830
Total Assets
(TL thousand)
3,773,391
Total Assets
2013
1,553,197
Total Premium Production
2014
3,252,770
Financial Highlights (TL thousand)
0.27
1.01
0.02
0.03
0.04
13
14
13
14
Financial Status / Financial Information and Indicators
Premium Production (TL thousand)
Accident
Illness/Health
Motor Vehicles
2014
2013
Change (%)
79,755
50,494
57.9
811,525
1.6
279,983
229,008
12,563
10,099
24.4
49,343
33.8
249,689
-4.2
824,143
Aircraft
Watercraft
67,021
Marine
66,019
Fire and Natural Disasters
503,259
General Losses
239,216
22.3
63,534
5.5
463,414
8.6
Motor Vehicles Liability
780,421
703,489
10.9
General Liability
105,013
80,846
29.9
Financial Losses
8,500
Credit
1,127
Legal Protection
7,606
Total
3,004,830
Premium Growth Rate
(%)
Accident
Illness/Health
Motor Vehicles
Aircraft
Watercraft
Marine
-4.2
Aircraft Liability
1.6
22.3
5.5
8.6
29.9
-10.6 Financial Losses
Total
33.8
10.9
Credit
42.6
710
58.7
9,510
-10.6
2,749,704
9.3
6,860
10.9
Total Premium Production
(TL thousand)
24.4
13
General Losses
General Liability
Legal Protection
57.9
21,181
3,004,830
30,205
2,749,704
Aircraft Liability
14
42.6
58.7
10.9
9.3
Financial Status / Financial Information and Indicators / 2014 Economic Overview
2014 Economic Overview
The World Economy
Growth (%)
Global
Developed Countries
USA
Eurozone
Japan
Developing Countries
China
Brazil
Turkey
Inflation (%)
Developed Countries
Developing Countries
IMF World Economic Outlook, January 2015 (E): Estimated, (P): Projected
In 2014, global economic recovery lost
some pace. While the issues caused by
the global crisis in developed countries
continued to repress their growth
performances, growth in developing
countries remained low as compared
both to the pre- and post-crisis
recovery periods. Accordingly, the IMF
revised its growth projection for the
world economy downwards in the
World Economic Outlook released in
October, as it has been doing for the
last three years. Decreasing global
economic growth estimate for 2014
from 3.4% to 3.3%, the IMF also
revised its growth projection for 2014
from 4% to 3.8%. The World Economic
Outlook update published in January
2015, on the other hand, revised the
2015 figure once again, this time at
3.5%. The IMF estimates that the
growth rates to be registered by
developed countries and developing
economies in 2014 will be 1.8% and
4.4%, respectively.
2013
2014 (E)
2015 (P)
3.3
1.3
2.2
-0.5
1.6
4.7
7.8
2.5
4.0
3.3
1.8
2.4
0.8
0.1
4.4
7.4
0.1
3.0
3.5
2.4
3.6
1.2
0.6
4.3
6.8
0.3
3.0
1.4
5.9
In the said report, the IMF noted that
global economy displayed a recovery
that differentiated on the basis of
countries, rather than an overall
recuperation. The US economy
unexpectedly shrank in the first
quarter of the year, but the recovery in
the ensuing periods showed that the
weakness was temporary. The
Eurozone economy, on another front,
came to a point of standstill in the
second quarter of the year in line with
the weak course of investments and
negative export performance, and the
risks in relation to decelerated growth
still persist. While geopolitical
problems gained the foreground as
downside risks on global growth in the
second half of the year, the turmoils in
the Middle East, along with the
tensions between Russia and Ukraine,
put pressure on global economy.
Nevertheless, in its Global Financial
Stability Report, the IMF stated that,
six years after the global crisis,
worldwide economic recovery still
relies on supportive monetary policies
implemented by developed countries.
1.4
5.4
1.0
5.7
Suggesting that these policies that give
substantial support to economic
recovery increase the tendency to take
financial risks, it is underlined that
they have also given rise to higher
market and liquidity risks lately. The
IMF also reported that global risk
appetite increased, as compared to its
April report, and credit risk alleviated
in conjunction with the positive course
of financing terms within the frame of
the pursuit for high yields.
According to the US Department of
Commerce data announced in the last
week of October, seasonally adjusted
GDP grew beyond expectations and
registered 3.5% in the third quarter.
While the estimate that resulted from
the Wall Street Journal survey was
3.1%, the US economy displayed the
best half-year performance in more
than a decade when the figure for the
third quarter is evaluated in
conjunction with 4.6% growth
recorded in the second quarter. While
the positive outlook of the growth data
was driven especially by improved net
exports, household expenditures,
for
stimate ts
e
h
t
w
gro
ed i
onomic MF also revis
c
e
l
a
b
%.
sing glo to 3.3%, the I
% to 3.8
4
Decrea
m
%
o
r
.4
f
014
om 3
2014 fr ojection for 2
pr
growth
although slower than the first quarter,
supported growth. The US employment
data also exhibited a positive outlook.
Having started to decline from the first
quarter of 2014, the unemployment
rate retreated to the pre-crisis level
during the year, and was 5.6% at
year-end 2014, even below the
expectations.
The economic activity in the Eurozone
remains weak. Data announced in the
Eurozone point that the zone economy
continues to be under pressure. With
the effect of declined energy prices,
annual inflation was -0.2% in
December. On the other hand,
industrial production fell by 1.8%,
above projections, on a monthly basis
in August, and showed that the
negative course of production activities
continued. On another wing, ZEW index
that shows investors’ sentiments about
the economic future of Germany
dropped to -3.6 in October, acquiring a
negative value for the first time since
November 2012. The Federal Ministry
for Economic Affairs in Germany
revised growth estimations
downwards from 1.8% to 1.2% for
2014, and from 2% to 1.3% for 2015.
Acting as the driver of the Eurozone
since the global crisis, the German
economy’s slowdown comes to the fore
as a factor that aggravates the concerns
about the Eurozone. On the other hand,
GDP growth for the first quarter of
2014 in the Eurozone, previously
announced as 0.2%, was revised as
0.3%, while the second quarter growth,
which was announced to be flat, was
revised as 0.1%.
Having expanded by 7.5% in the second
quarter of the year, the Chinese
economy grew 7.3% in the third
quarter, surpassing the market
estimate of 7.2%. Despite beyondprojected growth, the data that was
indicative of the Chinese economy’s
worst growth performance in the
post-global crisis period was deemed
as a negative development.
In its guidance that followed the FOMC
meeting of 17 December, the US Fed
underlined that they would be patient
on deciding when to raise rates, instead
of their previous remark that interest
rates would be kept low for a
“considerable time”. The Fed noted that
this change of language is not a change
of guidance away from the
“considerable time” characterization.
Based on the expectation that the Fed
will take a step toward rate hike by
mid 2015 the latest, developing
economies are anticipated to suffer
from fund issues as a result of shrank
liquidity, and funding costs are
predicted to increase. In the event that
rates are raised, it is considered that
the course of liquidity in the world will
change and funds in search of a safe
haven will head toward the USA.
EUR/USD parity went up somewhat in
the first half of October. The
expectation that the Fed might start
rate hikes sooner than projected in line
with the positive course of the US
economy led the US dollar to grow
stronger in international markets from
July. Another contributor was the
further loosened monetary policy by
the European Central Bank (ECB).
EUR/USD parity dropped to 1.2499 as
of early October. Thereafter, the
lessened worries about faster and
earlier action to be taken by the Fed
with respect to its monetary policy
caused some depreciation of the US
dollar. However, the US currency
readopted an appreciating trend as the
recuperation of the economic outlook
in the US was more strongly underlined
in the Fed meeting ended on 29
October. Within this framework, EUR/
USD parity was in the order of 1.2163
at the end of December.
Besides the global economic growth
projections that were revised
downwards, the anticipated subsided
global demand for oil due to the weak
economic activity in the Eurozone
resulted in declined oil prices. In this
framework, crude oil price per barrel
that dropped to its lowest since
November 2010 lost value by 46% in
the aggregate in 2014, and closed at
USD 57 as at the end of December. This
situation will supposedly affect net
energy importing countries including
Turkey positively. Following a
downward course in parallel with the
strengthened US dollar, gold prices fell
rapidly in the last week of October, and
stood at 1,188 USD/ounce as at 31
December.
%
7
1
.
8
of
al rate
u
n
n
a
as
The
of CPI w
e
s
a
e
r
c
in
.
in 2014
8.17%
The Turkish Economy
As a result of the prudential measures
introduced by late 2013 and early
2014 in an effort to take private
consumption under control and to curb
current deficit in the Turkish economy,
domestic demand adopted a weakening
trend. Having grown 4.1% in 2013, the
Turkish economy’s growth was 2.8%
in the first three quarters of 2014 as a
result of the local elections, monetary
tightening and macro-prudential
measures.
Geopolitical repercussions of the
developments that take place in
our neighboring countries upon the
national economy, coupled with the
anticipated recovery in the European
Union that kept failing to match
projections, put pressure on growth
and acted as significant factors that
resulted in restricted economic
growth.
Remaining below the potential and
growing in the 2-4% interval since
2012, the Turkish economy is projected
to perform similarly also in 2015,
although the rate is expected to be
closer to the upper cap. This can be
considered as a more acceptable level
amid the new global equilibrium,
although it will be below the potential
level. The Medium Term Program 20152017 announced by the Government on
8 October 2014 estimated the annual
growth at the end of 2014 as 3.3%,
while projecting a growth rate of 4%
for 2015. It is stated that the increase
Medium Term Program 2015-2017 Data
Years
Growth GDP (%)
Inflation Rate (%)
2014
3.3
9.4
5.0
5.0
2015
4.0
2017
5.0
2016
in growth in 2015 will be driven
mainly by recovered global economy,
expected economic recuperation in
the EU, increased growth in Turkey’s
trading partners, and revived domestic
demand.
The IMF, on the other hand,
painted a more pessimistic picture
regarding Turkey’s economic growth
expectations and anticipated 3%
growth rate for 2014 and 2015 for
our national economy in its World
Economic Outlook published in
October. In the Article 4 Consultation
with Turkey Report published
in November, the IMF made the
determinations that the rapid growth
of the Turkish economy came at the
expense of large external deficits,
making the economy sensitive
to changes in external financing
conditions; and that macroeconomic
policies were adjusted to maintain the
current situation rather than fixing
economic imbalances. The report noted
that the financial system preserved
its strong structure and the main risk
for Turkey remains a capital flows
reversal.
6.3
5.0
The negative state that resulted from
increased volatilities in the financial
markets drove inflation outlook and
expectations away from the medium
term target in 2014. Moreover, the
effects of the declining oil prices
throughout the year have become
visible as of December. Consequently,
CPI cumulative increase rate went up
by 0.7%, below the projections, in the
twelve months to December 2014, and
stood at 8.17%. Plummeted oil prices
that decreased the Transportation
group prices, combined with the
seasonal decline in the clothing and
footwear group, have been influential
on the restricted cumulative growth
rate of CPI. Hence, the annual rate of
increase of CPI was 8.17% in 2014. The
economy administration projects the
2015 inflation at 6.3%, slightly below
the market.
Most certainly, inflation will be a
critical factor of balance in 2015. While
it is not anticipated to be widespread,
double-digit annual inflation figures
may be in question at certain periods
during 2015. Although inflation is
expected to decline with significant
y’s
econom 4
h
s
i
k
r
201
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2013, t ee quarters of ning
n
i
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te
4.1
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Having as 2.8% in th ctions, monet
w
le
growth t of the local e asures.
ul
me
as a res o-prudential
r
c
and ma
contribution from the base effect
advantage in the first half of 2015, the
important point is whether this decline
can be preserved until the end of the
year. The key dynamic at this point will
surely be the trend to be adopted by
food prices, which have a significant
share in the rise of inflation.
Increased uncertainties in global
economy resulted in fluctuations in
capital flows towards developing
countries and Turkey. When these
global uncertainties combined with the
political tensions in our country, the US
dollar saw sharp upturns particularly
early in the year. In an effort to counter
the resulting hike in the US dollar rate,
the CBRT increased the one-week repo
rate, i.e. the lead policy rate, by 550
basis points in the first month of the
year, which was followed by a decrease
of 175 basis points in the aggregate
in May-July period after the US dollar
slackened. From August, the CBRT
chose to keep this critical policy rate
indicator stable at 8.25%.
Behind the improved foreign trade
balance in 2014 were stronger exports
combined with the slowed down
imports. As at year-end 2014, exports
expanded by 3.9% on an annual basis
while imports declined by 3.7%, which
resulted in a significant downfall of
15.4% in foreign trade deficit.
It can be suggested that the increased
export was triggered by the
depreciated Turkish lira during the
reporting period, improvement in the
Eurozone although it incorporated
downside risks, and increased gold
exports. The primary drivers behind
decelerated imports included slow
domestic demand, lower energy prices
and slackened gold imports, as well as
the effect of the Turkish lira that lost
value.
Although the recovery in the European
Union economies failed to capture the
desired level and despite the weak
demand conditions, Turkey’s export to
the Eurozone in December went up by
1.8% year-to-year. In the same period,
EU’s share in Turkey’s total exports
was up from 40.0% in December 2013
to 40.2% in December 2014.
Overall, foreign trade data indicate
that the expansion in exports is
maintained to a large extent despite
the ongoing issues plaguing Turkey’s
export markets. The revival that can be
observed in domestic demand in line
with the lagging effects of the rate cuts
the CBRT realized in earlier months, on
the other hand, may lead to an upturn
in imports in the period ahead.
Nevertheless, the recent plummet in
oil prices is noteworthy. The price of
Brent oil, which averaged USD 109 per
barrel in 2013, plunged to USD 55 as
at 31 December 2014 in connection
with the increased worries about
global economic growth in 2014. If they
persist at this level in the period ahead,
oil prices will certainly contribute
towards keeping the foreign trade
deficit at its present level despite the
anticipated expansion in domestic
demand.
USD 160.5 billion. The same report
projects export and import figures at
USD 173 billion and USD 244 billion,
respectively, for 2015.
Unemployment rate data, which have
been displaying an upward trend
since the middle of 2012, continued to
rise throughout 2014. Having gained
momentum particularly in the second
quarter of 2014 and having reached
9.9% at the end of the first half of
the year, the rate of unemployment
maintained its climb in the November
data published by TurkSTAT and was
registered as 10.7%.
The anticipated policy rate hike
of the US Fed in keeping with the
economic improvement, the ECB’s
decision to continue with quantitative
easing for the purpose of supporting
economic recovery, and geopolitical
developments take the forefront among
the global headlines that will bear an
impact on national economy in 2015.
Key issues within national borders,
on the other hand, include the CBRT’s
commitment to fight inflation, the
performance of the current deficit,
steps to be taken with respect to
structural reforms, and the ongoing
election process.
The Medium Term Program issued by
the government estimates imports to
decrease to USD 244 billion at yearend 2014, while exports will preserve
its uptrend and finish the year at
Financial Status / Financial Information and Indicators / Overview of the Turkish Insurance Industry and Future Outlook
2.5%
m
premiu
e
d
i
w
d
l
is
Wor
growth .5%
n
o
i
t
c
h2
produ
to reac r.
d
e
t
a
a
m
esti
f the ye
o
d
n
e
at the
An Overview of the World Insurance Industry
Non-Life Insurance Worldwide Premium Production
Premium Production (USD million)
2014
2013
2012
World
2,083,671
2,032,850
1,968,677
Developed countries
1,681,120
1,653,018
1,623,616
Developing countries
400,723
379,832
345,060
Turkey
9,793
9,762
9,556
*2014 figures are estimated
Worldwide decline in the non-life
insurance premium production in 2013
persisted in the first half of 2014 in
line with low economic growth rates.
However, premium production growth
progressively increased around the
globe from the second half of 2014; it
is estimated to reach 2.5% at the end
of the year, and projected to be 2.8% in
2015 and 3.2% in 2016.
Owing to economic growth, increased
penetration and population, developing
markets are anticipated to claim
higher shares out of the total written
premiums by 2023. The table above
shows that this was also the case in the
2012-2014 period.
As at the year-end 2014, the rate of
premium growth is expected to gain
speed in developed countries, whereas
the same is anticipated to fall in
developing countries.
Increased capital available to the
global insurance industry and the low
level of catastrophe losses paved the
way for lower insurance prices in 2014.
The decline in fire and engineering
insurance was 4.6% as at the second
quarter. Decreased freights caused
downward trends in prices both in
hull and cargo insurances. Owing to
major passenger aircraft crashes that
occurred last year, insurance prices
applied to airline companies showed
some rises depending on losses.
However, in line with the trend in
other lines of business, the prices in
the general aviation insurance exhibit
a downturn due to abundance of
capacity. The overall downward trend
in prices manifested itself at a ratio of
0.6% in liability insurance and 2.3%
in financial risks insurance in the first
half of the year.
With low losses and new capital
that joined the reinsurance market,
reinsurance costs showed a descending
trend in all lines of business in 2014.
Positive results in catastrophe and
non-catastrophe losses gave rise
to improved renewal conditions. In
2013, catastrophes around the world
caused insured losses of USD 45 billion,
which is below the ten-year average
of USD 58 billion. This tendency
persisted through the first half of
2014, and insured losses amounted to
USD 22 billion. While meteorological
forecasts reported intensive North
Atlantic hurricanes, which make up
Inflation-Adjusted Change (%)
2014*
2013
2012
2.5
2.3
2.7
1.7
1.1
1.5
5.5
8.3
9.3
0.8
13.3
9.0
the cause of the biggest-ticket losses
for the insurance industry, 2014 saw
no hurricanes that made a significant
impact on the US coastline. In this
respect, the world insurance business
had yet another lucky year. A major
earthquake did not take place in the
reporting period either, and the highest
cat losses arose once again from
meteorological phenomena. However,
these events were far from affecting
reinsurance prices. According to
projections by Aon Benfield brokerage,
it will take a cat loss worth USD 100
billion for reversing global prices
upwards.
The size of the classic reinsurance
market expanded by USD 15 billion in
the second quarter of 2014 over the
first quarter figure and reached USD
570 billion. This magnitude translates
into a 6% rise as compared with
year-end 2013. The drivers behind
this increase were low cat losses,
unrealized financial returns, and the
contribution of unconventional capital
to the reinsurance market. The share of
unconventional capital to reinsurance
capital allocated for catastrophes
reached 14%. Unconventional capital
resources include capital market actors
Financial Status / Financial Information and Indicators / Overview of the Turkish Insurance Industry and Future Outlook
d
th tren
w
o
r
g
’s
008
stry
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n
a
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The Tu ms that had b s a result of th ke private
a
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ter
in real
in 2014 s intended to
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re
came to ation’s measu ol.
r
t
s
ntr
admini tion under co
p
consum
managing large sums such as hedge
funds, pension funds and the like.
Their contribution to the reinsurance
market continues at an increasing
rate. In the first half of 2014, cat bonds
worth USD 9.4 billion were redeemed,
representing 41% rise year-to-year.
Total amount of cat bonds traded on
the market in the second half of 2013
and in the first half of 2014 reached a
record USD 22.4 billion.
Alternative capital was up by 18% to
USD 58.6 billion as compared with
year-end 2013. Increased insurance
capital and scarce catastrophe losses
kept the demand for the reinsurance
market flat and the insurance capital
available globally expanded by 6% in
the second quarter of 2014. Besides
falling prices, improvements were
witnessed in the reinsurance renewal
terms of certain insurance companies,
such as an increased number of
replacements, expanded coverage
scope etc.
The bill in relation to Solvency II
that sets out the capital adequacy
requirements for the European
insurance industry was ratified in
the European Union Parliament on
11 March 2014, with its enforcement
date set as 1 January 2016. One of the
most crucial regulatory arrangements
of 2014, C-ROSS (China Risk Oriented
Solvency System) targets to develop
a risk assessment that is more
comprehensive than Solvency II.
With this implementation, non-life
companies are expected to optimize
their portfolios, and to arrange their
investment portfolios and reinsurers
in China, which charges ahead toward
becoming one of the world’s largest
insurance markets.
Rating agencies including A.M. Best,
Standard and Poors and Moody’s
revised the outlook for reinsurance
companies from stable to negative
during the reporting period, on
account of increased competition
and decreased demand, combined
with macroeconomic conditions.
If this tendency continues in 2015,
then it can be anticipated for the
conventional reinsurance industry
to opt for downsizing, and in return,
the insurance industry to reduce
cessions on one hand, while making
more frequent use of alternative risk
management instruments on the other.
Overview of the Turkish Insurance
Industry and Future Outlook
The Turkish insurance industry’s
growth trend in real terms that had
been going on since 2008 came to an
end in 2014 as a result of the economy
administration’s measures intended
to take private consumption under
control. On the basis of year-end
premium production figures, the
insurance industry narrowed down
by 0.8% in real terms in the reporting
period. In 2015, the sector is projected
to attain a nominal growth in nonlife branches in the range of 10-15%
depending on economic developments,
and thus, to recapture real increase.
Looking at the current situation of
the sector, it can be suggested that
the shrinkage resulted from the life
segment. While the non-life segment
registered 9.0% nominal growth at the
end of December, the same has grown
by 0.8% when the CPI rate of 8.17%
announced for the same period is taken
into consideration. Impacted by the
shrank bank loans, the life segment’s
downsizing of 3.4% in nominal and
10.7% in real terms resulted in a real
contraction of 0.8% for the overall
insurance industry.
According to December 2014 data,
non-life branches were accountable
for 87.4% of total production,
corresponding to a premium
production of TL 22,710 million.
Premiums written on life insurance
reached TL 3,280 million in 2014,
translating into 12.6% of total
production.
Based on the data for the first nine
months of 2014 for the non-life
segment, motor vehicle liability
branch that represents the largest
portion of the market share posted a
Financial Status / Financial Information and Indicators / Dünya ve Türkiye Sigortacılığının Genel Durumu ve Beklentiler
9.0%
Branch
Accident
Illness/Health
Motor Vehicles
Motor Own Damage
Rail Vehicles
Aircraft
Watercraft
Marine
General Losses
Motor Vehicle Liability
Motor Vehicle TPL
Aircraft Liability
Watercraft Liability
General Liability
Credit
Fidelity
Financial Losses
Legal Protection
Support
Total Non-Life
Total Life
Grand Total
Kaynak: TSB
ent
ife segm minal
l
n
o
n
no
The
ed 9.0% of
r
e
t
s
i
g
re
nd
at the e
growth r 2014.
be
Decem
31.12.2014
Premium
Production (TL)
1,035,675,457
2,930,346,787
5,085,067,734
5,085,067,734
10,586
58,724,204
140,455,545
488,871,753
3,844,573,725
2,429,292,744
5,528,325,411
5,070,820,284
92,765,288
9,409,070
634,407,542
138,958,449
26,554,285
178,765,763
84,360,711
2,984,038
22,709,549,092
3,280,003,588
25,989,552,680
technical loss of TL 429 million. In the
motor TPL segment that makes up a
substantial portion of this branch, on
the other hand, the loss figure goes
up to as high as TL 567 million. Motor
vehicles (own damage) branch, i.e. the
other motor vehicle insurance branch,
registered a technical profit of TL 569
million. Following motor own damage,
the highest profit generators in the
industry were, in order, fire with TL
255 million and personal accident with
TL 213 million. Technical profit figure
for all branches combined was TL 813
million. Nonetheless, the effect of the
amount of TL 919 million needs to be
taken into account, which has been
transferred from financial accounts
to the industry’s financial statement.
Market
Share%
4.56%
12.90%
22.39%
22.39%
0.00%
0.26%
0.62%
2.15%
16.93%
10.70%
24.34%
22.33%
0.41%
0.04%
2.79%
0.61%
0.12%
0.79%
0.37%
0.01%
87.38%
12.62%
100.00%
31.12.2013
Premium
Market Share
Production (TL)
%
887,277,513
4.26%
2,473,114,765
11.87%
5,025,804,558
24.12%
5,025,804,558
24.12%
5,286
0.00%
41,755,849
0.20%
139,916,316
0.67%
415,936,425
2.00%
3,324,489,251
15.96%
2,186,115,158
10.49%
5,382,930,772
25.84%
4,963,838,584
23.83%
69,721,106
0.33%
1,675,496
0.01%
508,124,765
2.44%
106,601,433
0.51%
24,702,020
0.12%
171,417,053
0.82%
67,218,062
0.32%
7,482,251
0.04%
20,834,288,079
85.99%
3,395,327,656
14.01%
24,229,615,735
100.00%
At the bottom line, non-life segment
booked a profit of TL 717 million gross,
and TL 569 million net in its financial
statements for the period ended 30
September 2014.
Having languished since 2012, the
acquisitions in the industry picked
up one again with Halk Bank’s
announcement on the Public Disclosure
Platform (in Turkish: KAP) in July. In
its disclosure, Halk Bank informed that
they have authorized the Head Office
for the disposal of Halk Sigorta A.Ş.
and Halk Hayat ve Emeklilik A.Ş., in the
capitals of which Halk Bank controls
the majority share.
Another piece of information
concerning the industry came from
Change (%)
16.73%
18.49%
1.18%
1.18%
100.27%
40.64%
0.39%
17.54%
15.64%
11.12%
2.70%
2.16%
33.05%
461.57%
24.85%
30.35%
7.50%
4.29%
25.50%
-60.12%
9.00%
-3.40%
7.26%
Sabancı Holding, which disclosed that
it would carry out a public offering
for 19.66% of the shares in AvivaSA
Emeklilik ve Hayat A.Ş. With the
book building having taken place
in the first week of November, the
price for the AvivaSA Emeklilik ve
Hayat A.Ş. IPO was set at TL 47. With
this development, the number of life
companies traded on Borsa İstanbul
went up to two, including our associate
Anadolu Hayat Emeklilik.
The merger process that was initiated
in July 2013 with the acquisition of
Yapı Kredi Sigorta by Allianz was
concluded on 1 October 2014 when the
two companies began pursuing their
activities as a single entity under the
name Allianz.
Financial Status / Financial Information and Indicators / Developments and Changes in Legislation
Developments and Changes in Legislation
Summary information about the key
changes in the legislation published
during the fiscal year, which concern
the company’s operations and operating
results, are presented below.
Consumer Protection Law
Consumer Protection Law no. 6502
was published in the Official Gazette
issue 28835 dated 28 November 2013,
to be enforced six months later. The
key change the new law introduced
with respect to insurance companies
was the expanded scope of consumer
transaction definition so as to
incorporate insurance transactions,
thus making insurance transactions
a consumer transaction. The
requirements in the New Consumer Law
went into force on 28 May 2014.
General Conditions for Suretyship
Insurance
Scope, terms and other general
conditions of implementation for the
Suretyship Insurance was enacted
by the Undersecretariat of Treasury
effective 01 February 2014. While they
have not been implemented in Turkey as
at the enforcement date of the general
conditions, suretyship insurance calls
for a new perspective and expertise.
The suretyship insurance is expected to
serve as an alternative to bank letters of
guarantee and contribute significantly
to the solution of suretyship and
guarantee problems domestic
companies are faced with.
Circular on the Newspaper
Announcements to be Placed for
Unclaimed Monies by Right Holders
The Regulation on Unclaimed Monies by
Right Holders under Insurance Policies
Governed by the Provisions of Private
Law, which was published in the Official
Gazette issue 28789 dated 08 October
2013, sets forth the principles and
procedures for lapsed monies such as
premiums and compensations that need
to be paid or returned to right holders.
Draft Audit Guides
Article 23 of the Regulation on the
Supervision and Audit Principles
and Procedures for Insurance and
Private Pension Sectors, which
went into force upon its publication
in the Official Gazette issue 28054
dated 14 September 2011, stipulates
public disclosure of such portions
of the audit guides drawn up by the
Undersecretariat of Treasury, the
minimum content of the documents
and information to be required from
companies within the scope of the audit,
and audit norms.
Circular on the Implementation
Principles of Private Health
Insurance Regulation
Private Health Insurance Regulation
governing the implementation
principles and procedures for private
health insurance practices has been
revised by being published in the
Official Gazette issue 28800 dated 23
October 2013. The Regulation, which
went into force six months after the
date of its promulgation, incorporates
important new rules about information
and proposals, and specifically about
lifetime renewal guarantee, which is
a frequent topic of conflict between
insurance companies and policyholders.
Insurance Agencies Regulation
The new regulation that went into
force upon its publication in the Official
Gazette issue 28980 dated 22 April
2014 made some revisions to the
qualifications of people who will work
as insurance agents, their authorities
and responsibilities, and principles and
procedures in relation to their activities.
Article 25 of the new regulation
repealed the former Insurance Agencies
Regulation that went into force upon its
publication in the Official Gazette issue
26847 (duplicate) dated 14 April 2008.
Circular on the E-Announcement and
E-Legislation Feedback System of the
Directorate General of Insurance
For the purpose of more efficient
performance of regulatory work, the
Undersecretariat of Treasury launched
the E-Announcement and E-Legislation
Feedback System as of 01 May 2014.
The system will enable electronic
conveyance of draft legislation for
seeking the feedback of the concerned
institutions/companies thereupon,
and electronic announcement of the
legislation drawn up.
Regulation on Unfair Terms in
Consumer Contracts
The regulation, which went into force
upon its publication in the Official
Gazette issue 29033 dated 17 June 2014,
sets out the principles and procedures
for establishing and overseeing the
unfair terms incorporated in contracts
made with consumers.
Regulation on Activities to be
Considered Under Insurance
Business, Insurance Contracts Made
in Favor of Consumers and Distance
Insurance Contracts
The Regulation, which went into force
upon its publication in the Official
Gazette issue 28982 dated 25 April 2014
by the Undersecretariat of Treasury,
establishes the boundaries of insurance
activity and of the businesses that do
not fall thereunder, and sets out the
principles and procedures in relation
to insurance contracts made in favor
of consumers and insurance contracts
that the parties make without getting
together.
Draft Regulation on Distance
Contracts for Financial Services
Draft Regulation was drawn up
based on Articles 49 and 84 of the
Consumer Protection Law no. 6502
dated 28 November 2013, for setting
out the implementation principles
and procedures in relation to distance
contracts for financial services. The
draft regulation sets forth the obligation
to provide advance information,
exercise of the right of withdrawal,
and obligations of parties, as well as
termination of the contract and burden
of proof under the heading various
provisions.
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Financial Status / Financial Information and Indicators/ An Assessment of Anadolu Sigorta in 2014
An Assessment of Anadolu Sigorta in 2014
2014 - Breakdown of Premium Production by Branches (%)
Branch
Share (%)
Accident
2.7
Illness/Health
Motor Vehicles
Aircraft
Watercraft
0.4
2.2
16.7
26.0
General Losses
Aircraft Liability
General Liability
Credit
Financial Losses
Legal Protection
27.4
2.2
Marine
Anadolu Sigorta is an insurer active
in non-life branches, which include
accident, illness/health, motor vehicles,
aircraft, watercraft, marine, fire and
natural disasters, general losses,
motor vehicle liability, aircraft liability,
general liability, credit, financial losses
and legal protection.
9.3
Premium Production and Technical
Results
Anadolu Sigorta’s direct premium
production reached TL 2,880 million
in 2014. With the addition of TL 125
million in reinsurance premiums, the
company’s total premium production
amounted to TL 3,005 million last year.
8.0
1.0
3.5
0.0
0.3
0.3
With 27.4%, motor vehicles branch
commands the biggest share of the
total portfolio. This is followed by
motor vehicle liability, fire and natural
disasters, and illness/health branches.
Premium Production 2013-2014 (TL thousand)
50,494
Accident
79,755
Illness/
Health
Motor
Vehicles
Aircraft
12,563
824,143
63,534
49,343
66,019
463,414
249,689
General
Losses
239,216
Motor Vehicles
Liability
21,181
30,205
General
Liability
Legal
Protection
811,525
67,021
Fire and Natural
Disasters
Financial
Losses
229,008
10,099
Marine
Credit
2014
279,983
Watercraft
Aircraft
Liability
2013
710
503,259
703,489
780,421
80,846
105,013
1,127
9,510
8,500
6,860
7,606
Claims Paid
(%)
48.2
22.5
15.2
13
14
82.2
13
13
13
14
Technical Profitability
(%)
1.3
78.7
Claims Paid
(TL thousand)
211,843
Premium Production
(TL thousand)
168,735
14
(%)
3.1
42.1
11,243
13,517
79,755
50,494
13
13
14
Claims Paid
(TL thousand)
Claims Paid
(%)
13
13
14
14
13
14
(%)
10.4
14
11.1
13
70.6
Premium Production
(TL thousand)
14
66.5
14
531,227
Premium production on motor
vehicles insurance, which
has the highest share in the
premium production of Anadolu
Sigorta, went up by 1.6 % yearon, amounting to TL 824,143
thousand. Claims paid in this
branch in the same period went up
by 8.0% to TL 531,227 thousand.
After posting a technical profit
of TL 90,430 thousand in 2013,
the branch registered a technical
profit of TL 85,313 thousand in
2014.
Claims Paid
(%)
491,961
Motor Vehicles:
14
279,983
In 2014, premium production on
illness/health branch grew 22.3%
year-on-year and amounted to TL
279,983 thousand, while claims
paid totaled TL 211,843 thousand.
Technical accounts showed a profit
of TL 3,581 thousand in illness/
health branch in 2014.
13
824,143
Illness/Health:
Claims Paid
(TL thousand)
229,008
Premium production in the
accident branch was up 57.9%
year-on-year and amounted to TL
79,755 thousand in 2014. Claims
paid in this branch totaled TL
11,243 thousand. The accident
branch booked a technical profit
of TL 38,407 thousand in 2014,
translating into a year-on rise by
238,5%.
Premium Production
(TL thousand)
811,525
Accident:
13
14
Technical Profitability Aircraft:
(%)
4,798
-203.6
61.9
33.7
Claims Paid
(%)
-661.3
Claims Paid
(TL thousand)
14,212
10,099
12,563
Premium Production
(TL thousand)
13
14
Claims Paid
(%)
13
Technical Profitability Watercraft:
(%)
-5.2
80.2
28,458
13
14
Claims Paid
(%)
13
13
14
13
14
In 2014, watercraft insurance
premium production grew by
5.5% year-on-year and reached
TL 67,021 thousand. While claims
paid in this branch were worth TL
57,560 thousand in the reporting
period, technical loss was TL 3,506
thousand.
14
Technical Profitability Marine:
(%)
34.5
14
26.2
Claims Paid
(TL thousand)
13
41.6
14
25.6
49,343
66,019
Premium Production
(TL thousand)
13
20,452
14
19,025
13
14
5.3
14
Claims Paid
(TL thousand)
63,534
67,021
Premium Production
(TL thousand)
13
107.3
14
57,560
13
While premium production on
aircraft insurance was worth
TL 12,563 thousand, claims paid
dwindled by 66.2% as compared
to 2013 and amounted to TL 4,798
thousand. The technical accounts
showed a loss of TL 7,781 thousand
in 2014.
13
During 2014, premium production
on marine branch rose by 33.8%
to TL 66,019 thousand while
claims paid amounted to TL 20,452
thousand. Technical profitability
was TL 22,796 thousand in 2014.
14
12.6
51.5
6.5
14
(%)
4.7
67.9
68.8
Claims Paid
(%)
13
8.0
14
14
Claims Paid
(%)
13
14
-5.0
(%)
14
13
0.4
13
82.3
Claims Paid
(TL thousand)
442,934
780,421
14
14
13
86.9
94,356
110,220
Claims Paid
(TL thousand)
(%)
49.0
129,415
503,259
86,786
14
13
Premium Production
(TL thousand)
13
13
14
703,489
Anadolu Sigorta’s premium
production on motor vehicle
liability insurance went up by
10.9% in 2014 to TL 780,421
thousand, while claims paid
amounted to TL 442,934 thousand.
The technical loss of TL 35,212
thousand booked by motor vehicle
liability branch in 2013 was
reversed to a profit figure of TL
2,885 thousand at the end of 2014.
14
Premium Production
(TL thousand)
13
Motor Vehicle Liability:
Claims Paid
(%)
296,757
During 2014, premium production
on general losses branch was down
by 4.2% to TL 239,216 thousand,
while claims paid amounted to
TL 110,220 thousand. The branch
posted TL 19,131 thousand in
technical profit in 2014, up by
62.6% year-on-year.
13
239,216
General Losses:
Claims Paid
(TL thousand)
463,414
Premium production on fire
and natural disasters insurance
policies was up 8.6% in 2014 and
reached TL 503,259 thousand
while claims paid amounted
to TL 129,415 thousand. Up
by a remarkable 111.0% in
2014, technical profitability of
the branch reached TL 63,464
thousand.
Premium Production
(TL thousand)
249,689
Fire and Natural Disasters:
13
14
13
14
Technical Profitability Aircraft Liability:
(%)
296
1.7
57.6
7.6
Claims Paid
(%)
92.0
1,532
Claims Paid
(TL thousand)
21,181
30,205
Premium Production
(TL thousand)
13
Claims Paid
(%)
13
14
Technical Profitability General Liability:
(%)
120.6
-120.6
13
32,243
Claims Paid
(TL thousand)
105,013
Premium Production
(TL thousand)
13 14
-20.2
14
426.8
13
23,187
14
80,846
13
13
-119.6
Technical Profitability Credit:
(%)
14
13
14
91.0
778
13
13
14
During 2014, general liability
insurance premium production
grew 29.9% and amounted to TL
105,013 thousand. While claims
paid rose from TL 23,187 thousand
to TL 32,243 thousand, a technical
loss of TL 126.639 thousand was
registered.
14
-450.6
Claims Paid
(%)
385.0
Claims Paid
(TL thousand)
13 14
710
1,127
Premium Production
(TL thousand)
14
6,301
14
Premium production on aircraft
liability branch was TL 30,205
thousand in 2014, up by 42.6%.
The technical profit in this branch
amounted to TL 515 thousand
corresponding to a technical
profitability of 1.7%.
13
Premium production in the credit
insurance branch was worth TL
1,127 thousand in 2014, while
claims paid amounted to TL 778
thousand. The technical accounts
showed a loss of TL -1,348
thousand on 2014 operations of
the branch.
14
10.6
-9.2
14
(%)
83.0
9.0
Claims Paid
(%)
13
4.8
162
129
7,606
13
14
94.3
26
13
13
14
14
13
14
13
13
4.0
(%)
77.7
Claims Paid
(%)
3.7
13
Claims Paid
(TL thousand)
13
73.7
Premium Production
(TL thousand)
14
1,553,197
14
1,249,199
Anadolu Sigorta’s total premium
production in 2014 was up
9.3% and reached TL 3,004,830
thousand, while claims paid
grew by 24.3% to TL 1,553,197
thousand. Despite the 4.0-point
rise in loss premium ratio, the
technical profit figure went up by
20.2% to TL 121,260 thousand
owing to the positive contribution
from the increased financial
profitability.
14
Claims Paid
(TL thousand)
3,004,830
Total:
13
Premium Production
(TL thousand)
2,749,704
Premium production in the legal
protection branch stood at TL
7,606 thousand in 2014. The
branch attained a profitability
of 83.0 % in 2014 for a technical
profit of TL 6,310 thousand.
14
6,860
13
Legal Protection:
(%)
30.2
Claims Paid
(%)
49.9
Claims Paid
(TL thousand)
4,245
8,500
Premium production on financial
losses branch totaled TL 8,500
thousand in 2014 and claims
paid were worth TL 26 thousand.
The financial losses branch
posted a technical profit of TL
2,570 thousand at the end of the
reporting period.
Premium Production
(TL thousand)
9,510
Financial Losses:
13
14
14
14
Investment Income
Investment income grew by 39.0 % to
reach TL 258,928thousand in 2014.
The company, in 2014, derived TL
94,307 thousand as interest income
on time deposits, TL 27,749 thousand
from the sale of government securities
and private sector bonds, and TL 8,119
thousand in dividend income from
equities.
Investment Income (TL thousand)
Income from Financial Investments
Revenues from the Sales of Financial
Investments
Valuation of Financial Investments
FX Gains
Dividend from Affiliates
Income from Real Estate
Income from Derivatives
Other Investments
Total
A total of TL 31,151 thousand was
booked as income on sales of financial
investments during the reporting
period. TL 13,409 thousand of this was
from the sale of bills and bonds, while
TL 2,408 thousand was from the sale
of equities, and TL 12,225 thousand
was from the sale of mutual funds.
The portion of TL 3,109 thousand
remaining outside these amounts
consists of income generated by the
sale of financial assets subject to repo
trading.
2014
130,175
31,151
19,421
59,971
16,000
1,815
206
189
258,928
The “financial investments valuation
account”, which consists of valuation
income derived from all equities, bills
and bonds, mutual fund shares, repo
trading, and fixed-term deposits,
showed TL 19,421thousand.
The company booked currency
translation gains in the amount of TL
59,971 thousand in 2014. Income from
Anadolu Sigorta’s equity participations
amounted to TL 16,000 thousand.
2013
85,749
16,004
10,576
52,709
18,000
2,848
213
113
186,213
Change (%)
51,8
94,6
83,6
13,8
-11,1
-36,3
-3,4
67,5
39,0
Investment Expenses
Anadolu Sigorta’s investment expenses increased 47.3 % to TL 275,810 thousand in 2013. The biggest component of this
figure consisted of TL 1190,509 thousand in investment income that was transferred to the technical division. As required by
the Undersecretariat of Treasury Circular on the Procedures and Principles of Keys Used in Financial Statements that went
into effect on 1 January 2008, investment income on assets covering technical reserves has been transferred to the technical
division. The investment income transferred to the technical division in line with the relevant transfer method was up by
54.6% year-to-year and reached TL 190,509 thousand.
Investments Expenses (TL thousand)
2014
2013
Change (%)
Investment Management Expenses (incl.
interests)
Devaluation of Investments
Loss from the Sales of Financial
Investments
Investment Expenses Transferred to the
Technical Division
Loss from Derivative Products
FX Losses
Depreciation Expenses
Total
-137
-
-
-3,510
-7,713
-190,509
-185
-49,954
-23,802
-275,810
-4,678
-13,582
-25.0
-43.2
-100
-28,805
-16,832
-187,216
85.3
73.4
41.4
47.3
-123,220
54.6
Financial Status / Assessment of the Company Capital and Comments
Revenues, Income, Expenses and Losses from Other Operations
The “revenues, income, expenses and losses from other operations” account stood at TL 11,736 thousand at year-end 2014.
A major contributor to this account balance stems from a TL 20,361 thousand charge against the reserves account, while the
deferred tax assets account created an income effect of TL 7,396 thousand.
Revenues, Income, Expenses and Losses
from Other Operations (TL thousand)
Provisions
Rediscounts
Deferred Tax Income
Deferred Tax Liability Expense
Other Revenues and Income
Other Expenses and Losses
Total
2014
-20,361
-3,360
7,396
5,142
-554
-11,736
2013
-23,893
2,354
-11,655
3,469
-2,689
-32,414
Change (%)
-14.8
-242.8
-100.0
48.2
-79.4
-63.8
Operating Results
Key ratios concerning the company’s performance are shown in the chart to the right along with prior-year results for
comparison.
Technical Profitability Ratio
Net Loss-Premium Ratio
Return on Equity
Return on Assets
Technical Division Balance
Investment Income
Investment Expenses
Revenues, Income, Expenses and Losses
from Other Operations
Total
Income/Loss (Gross)
Tax Provisions
Income/Loss (Net)
2014
4.0%
77.7%
7.0%
1.9%
2014
121,260
258,928
-275,810
-11,736
92,642
92,642
-21,082
71,560
2013
3.7%
73.7%
7.4%
2.1%
2013
100,878
186,213
-187,216
-32,414
67,462
67,462
67,462
Change (%)
20.2
39.0
47.3
-63.8
37.3
37.3
6.1
The insurance sector is expected to sustain its growth in 2015 while the goal of Anadolu Sigorta will be to secure increased
production in real terms and attain a sustainable profit, by further leveraging the concepts of quality service, leadership,
innovation and customer focus. Technical results will be monitored closely, targeting to increase technical profitability through
improving loss premium ratios particularly in unprofitable branches. In striving to achieve its strategic goals, the company aims
to further increase its brand equity while continuing to offer its services to the policyholders with strict adherence to its quality
service concept as it has always done.
Assessment of the Company Capital and Comments
The key considerations that the companies in the insurance sector will face in the years ahead will be the satisfaction of potential
capital requirements that might arise in line with growth, and due management of the capital.
When planning for growth and profitability targets, Anadolu Sigorta observes capital needs as well. Attention is paid to ensure
that the company capital is at adequate level, taking into consideration the regulatory requirements. Information on capital
adequacy is presented in the relevant section of the notes to the financial statements.
Financial Status / Profit Distribution Policy
Profit Distribution Policy
• The company’s profit distribution
principles for shareholders and
other people participating in the
profit are governed by the applicable
requirements of the Turkish
Commercial Code, Capital Market
legislation and our Articles of
Incorporation.
• The dividend distribution proposals
presented by the Board of Directors
for the approval of the General
Assembly are prepared in a manner
to preserve the delicate balance
between the expectations of our
shareholders and the company’s
need to grow, and taking into
consideration future expectations
regarding the company’s operations,
capital adequacy targets and the
conditions prevailing in capital
markets, as well as the profitability
of the company.
• The profit distribution policy
espoused by the Board of Directors is
based on the principle of proposing
to the General Assembly the
distribution of at least 30% of the net
distributable profit for the period as
bonus shares and/or in cash.
• In the event that the net distributable
profit for the period calculated based
on the legal records remains below
5% of the company’s paid-in capital,
the Board of Directors may propose
to the General Assembly that no
dividends be distributed.
• Dividend distribution formalities and
processes are carried out so as to be
completed by no later than the end of
the fiscal year in which the General
Assembly Meeting is convened.
• Pursuant to the company’s Articles
of Incorporation, our employees
are paid dividends up to three
times of their salaries, which, in the
aggregate, must not be in excess of
3% of the amount remaining after
the first dividend is set aside.
• The company may distribute
advances on dividends in accordance
with the principles and procedures
set forth in the Capital Market
legislation.
• There are no preference shares in the
company.
• No founder’s bonus certificates are
given, nor are dividends paid to the
members of the Board Directors.
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Risks and an Assessment by the Governing Body / Risk Management Policies Adhered to by Types of Risks
Risk Management Policies Adhered to by Types of
Risks
The company’s risk policies and
related implementation procedures
include written standards devised and
enforced by the Board of Directors and
implemented by senior management.
Determined and enforced by the
Board of Directors in parallel with
international practices on the basis of
insurance underwriting risk, credit
risk, market risk, operational risk
and the risk of use of the company’s
services for laundering proceeds from
crime and for financing terrorism,
these are general standards that
define the organization and scope of
the risk management function, risk
measurement procedures, the duties
and responsibilities of the company’s
Risk Management Committee, as well
as the procedures for determining risk
limits, actions to be taken in possible
limit violations, and the compulsory
approvals and confirmations that are
required to be given in various cases
and circumstances.
Besides insurance underwriting,
credit, market and operational
risks, other risks can result from the
reciprocal and successive interaction
of these risks. Therefore, an integrated
consideration should be adopted
for all risk elements stemming from
assets and liabilities positions. The
company’s basic strategy with respect
to the distribution of long-term assets
and liabilities is to ensure consistency
between assets and liabilities at
optimum liquidity risk level so as to
support the objective of maximizing
returns. Accordingly, utmost
importance is given to the following
points:
• The basic objective of the
company’s activity in the money
and capital markets is to generate
maximum possible return at a
specified risk level. The priorities
in asset investments are, in order
of precedence, safe investment,
liquidity and return.
• When investing assets, the
company takes into account market
and liquidity risks, portfolio
concentration risk, payables in
high amounts such as known or
foreseeable advance taxes, corporate
taxes, reinsurer payments and claims
payments, as well as receivables
from insurance activity.
• Through scenario analyses and
stress tests, the assets portfolio
is exposed to various shocks and
tested with respect to interest rates,
exchange rates and share certificate
prices. These tests are conducted at
quarterly intervals at a minimum.
• Utmost attention is paid to
maintaining a cash position in
foreign currency for potential
catastrophic risks equivalent to
the lower limit of excess of loss
agreements, as well as known
liabilities for any given period.
returns to be derived and general
economic expectations, sets the
company’s risk tolerance, which is
then expressed in terms of risk limits.
In line with the procedures set in the
Policies and in view of the market
conditions in the relevant period, the
Risk Management and Internal Control
Department reports violations of limits
submitted to the CEO and the Board of
Directors.
Senior Management is responsible for
implementation of Risk Management
Policies. For purposes of ensuring
compliance with policies, Senior
Management means the CEO, Deputy
Chief Executive Officers, and relevant
Unit Managers and Regional Managers.
On the other hand, all authorized
employees performing the transactions
regarded as a part of risk management
processes are individually responsible
for the accuracy and reliability of all
kinds of data and information they
provide in relation to their respective
jobs within the process, which form the
basis of the making of decisions.
1- Insurance Underwriting Risk
Policy
Insurance underwriting risk is defined
as a risk that might arise from failure
to correctly and effectively implement
the insurance technique within the
process of turning coverage provision
for natural risks which are not known
certainly if they will occur and for
risks which are known for sure to
occur but are unknown time-wise into
sustainable commercial earnings. The
scope of Insurance Underwriting Risk
Policies consists of the conditions and
price of the coverage to be provided
for the risk; the principles applied in
determining which of the coverages
provided will be ceded up to what
amounts and to whom in the case
of risks decided to be transferred;
conducting effective monitoring of risk
portfolio loss frequency so as to allow
formulation of fitting reinsurance
strategies at sufficient frequency,
and related monitoring and reporting
system.
Management of insurance
underwriting risk is based on the
principle of forming the risk portfolio
with risks that represent a low
potential to cause loss. In order to
avoid poor risk selection and incorrect
pricing of insurance policies and to
create accurate reinsurance policies,
effective monitoring is carried out
on loss frequency and loss severity of
the risk portfolio. The risk portfolio
is separately overseen on the basis of
agents, industry, branches, regions,
brands, models, tariffs, products,
customers and other parameters.
A comprehensive insurance
underwriting risk reporting system
is used to ensure measurement of loss
performance, oversee compliance
with applicable legislation and ensure
reporting on the effectiveness of
insurance underwriting risk controls.
The risk of the portfolio is regularly
reported by executive departments
and the Risk Management and Internal
Control Department to the CEO and the
Board of Directors.
2-Credit Risk Policy
Credit risk means the possibility
of the company’s sustaining
loss due to failure on the part of
policyholders, agents, reinsurers,
fronting companies, coinsurers, and
other parties to partially or totally
fulfill their obligations towards the
company. It also indicates to the loss
of market capitalization caused by the
deterioration in the financial standing
of companies with which there are
subsidiary or affiliate relationships.
The Credit Risk Policy sets out the
procedures and responsibilities
related to the management, control
and monitoring of credit risk, as well as
matters in relation to credit risk limits.
Early identification and definition of
issues are of the essence for effective
management of credit risk. For this
purpose early warning signals are
determined; these are indicators
pointing at cases that will adversely
influence the credit risk and lead to a
credit risk that is above the company’s
risk tolerance. For insurance brokers,
these are declined collection ratios,
reduced production performances,
slackened discipline in conforming to
company guidelines, and other data
from intelligence. For Reinsurance
companies and counterparties, these
cover all kinds of data and information
obtained in relation to negative ratings
and developments. It is the duty and
responsibility of executive units to
obtain data and information in relation
to credit risk. All kinds of information
obtained are urgently considered
within the frame of decision-making,
monitoring, reporting and auditing
processes.
A credit risk scoring system used,
which has the capability to be made use
of in the management of credit risk and
decision-making, to enable monitoring
risk on the basis of counterparties, to
take notice of expected and unexpected
losses, and to allow for making the
decisions based not only on the return
derived or anticipated to be derived
from the counterparty at any time,
but also on the risk underwritten. The
risks of counterparties are regularly
reported by the Risk Management
and Internal Control Department to
the CEO and the Board of Directors.
The Risk Management and Internal
Control Department is also responsible
for undertaking daily follow-up of
regional, sectoral and market trends
that have an actual or possible impact
on the company’s credit risk, and for
reporting the results to the CEO and
the Board of Directors.
3-Market Risk Policy
Market Risk means the risk of loss in
the value of the company’s placements
in financial borrowing instruments
whose return is linked to interest rate;
stock, other investment securities, all
FX or FX-indexed assets and liabilities
in or off the balance sheet, derivative
agreements based on the said
instruments, which loss might result
from the volatilities in interest rates,
stock prices and exchange rates.
The basic and ultimate purpose of the
company’s activities in money and
capital markets is to generate returns.
The basis of Market Risk policies is
to measure, report and keep under
control the risk that the company is
exposed to by reason of such activity.
The top priority is to ensure that the
company’s Market Risk exposure
is within the limits stipulated by
applicable legislation and is compliant
with the company’s risk appetite.In
market risk management, risk appetite
is expressed in terms of market risk
limits assigned to the executive fund
management unit and the contracted
asset management companies. Market
risk limits are categorized into two
groups: limits set employing the value
at risk method, and limits determined
based on the ratio of each group of
investment securities to the total
portfolio and shareholders’ equity.
The Risk Management and Internal
Control Department and executive
fund management unit closely and
constantly monitor limit violations. In
case limits are exceeded, the amount
at which a limit is exceeded and its
reasons are reported to the CEO and
the Board of Directors, along with the
assessments of the executive body. If
limit violations are above the ratios or
durations set by the Board of Directors,
necessary action is determined by the
Board of Directors.
Market risk is calculated employing
internationally accepted statistical
methods. Since these calculations
cover risk prediction for the following
days, the accuracy of predictions are
compared subsequently with actual
values and monitored on a daily basis.
On the other hand, the portfolio is
tested under different scenarios for
determining the effects of occurrences,
which pose a low probability in terms
of occurrence, but big volume in terms
of loss. The assessments, which include
the possible mismatches among types
and maturities of the company’s assets
and liabilities, are regularly reported
in detail to the CEO and the Board of
Directors.
4-Operational Risk Policy
Operational risk is defined as any
risk other than absolute insurance
underwriting, credit and market risks
which might occur in the organization,
business continuity, insufficient
or inoperative business processes,
technology, human resource,
underperformance by individuals,
administrative mistakes, unfortunate
events, misconduct, accident and
fraud, systems or external factors,
legislation, management and business
environment, and which might cause
physical or reputational loss to the
company.
Limits are introduced for potential
operational risks that might arise
during the activities based on the
“Company Risk Catalogue,” which is the
basic document used in defining and
classifying all risks that may be faced
with. The Risk Catalogue is updated in
parallel with the changing conditions.
“Self-Assessment Methodology” is used
in the identification of operational
risks. In this method, the risks in
relation to activities conducted are
exposed with the involvement of the
personnel performing the job.
Qualitative and quantitative methods
are used jointly in the measurement
and evaluation of operational risk.
The measurement process uses data
obtained from “impact - likelihood
analysis”, “control culture profile
surveys” and internal and external
“loss database.” When managing
operational risk, efforts are spent
to develop controls to eliminate or
mitigate the possibility of sustaining
loss due to risks that the company
may be exposed to in relation to its
activities. Effectiveness and adequacy
of existing or subsequently developed
controls, and the implementation of
action plans adopted in this regard
are evaluated in coordination with
the Risk Management and Internal
Control Department and the Board of
Inspectors. The Risk Management and
Internal Control Department monitors
all operational risks that the company
may be exposed to during the course of
its activities, and regularly reports on
the same to the CEO and the Board of
Directors.
5- Policy for Combating the
Legalization (Laundering) of
Proceeds from Crime and Financing
of Terrorism
This policy is intended to define,
rate, monitor, assess and mitigate the
risks the company is exposed to with
respect to the use of the insurance
service offered by the company in
laundering proceeds from crime or
financing of terrorism. The ultimate
goal can be achieved by effectively
monitoring and supervising customers
and transactions in full compliance
with the applicable legislation and
regulations.
The overall scope of the policy covers
the activities centrally executed for
defining, measuring, monitoring,
controlling and reporting the risks that
the company is exposed to for reasons
of the use of the insurance service
offered by the company in laundering
proceeds from crime or in financing
of terrorism, or the company’s failure
to fully comply with the liabilities
imposed by the Law no 5549 on
Prevention of Laundering Proceeds
from Crime and by related regulations
and communiqués.
The basic strategy of the company to
achieve the ultimate goal is to carefully
plan, conduct and manage risk
management activities independently,
impartially, purposefully, productively
and efficiently, employing a riskfocused approach and in line
with applicable legislation and
internationally accepted principles
and standards. The basic principle in
achieving this goal is to employ the
most advanced tools and methods
that are available and possible to be
used. Findings from risk management,
monitoring and control activities are
regularly reported to the Board of
Directors by the Board Director who is
delegated by the Board of Directors in
respect of this matter.
Risks and an Assessment by the Governing Body / Activities of the Committee of Early Determination of Risk
Activities of the Committee of Early Determination of Risk
Pursuant to the provisions of the
Communiqué Serial: IV No: 56 on the
Determination and Implementation
of Corporate Governance Principles
enforced upon its publication in the
Official Gazette issue 28158 dated
30 December 2011, it has been
decided to set up a Committee of
Early Determination of Risk as of
27 February 2012. The committee
will be responsible for carrying
out all relevant works and efforts
for the early determination of risks
that might endanger the existence,
progress and survival of the company,
implementation of measures and
remedies against identified risks, and
management of the risk.
The committee makes an assessment of
the situation in its bimonthly reports
submitted to the Board of Directors;
the said report is also shared with the
statutory auditor.
RISK MANAGEMENT ACTIVITIES AND
RISK ASSESSMENT
The company’s risk exposure is
monitored, assessed and controlled
individually under the categories of
insurance underwriting risk, credit
risk, market risk and operational risk.
The risk exposure arising out of the use
of the company’s insurance services
for laundering proceeds from crime
or for financing terrorism, or out of
failure to achieve full compliance with
the obligations imposed by the Law
no 5549 on Prevention of Laundering
Proceeds from Crime and by related
regulations and communiqués is
addressed independently from other
types of risks as per the applicable
legislation.
When the company’s risk exposure is
assessed with respect to the magnitude
of potential impact of those risks, the
effects of developments in global and
national economy upon the technical
and financial performance, the
potential earthquake in İstanbul, and
low technical profitability come to the
fore.
It is well known that macroeconomic
risks and financial stability
risks mostly result from global
developments, as well as national
developments, in outward-oriented
economies with a broad current
deficit such as Turkey. The key factors
that fuelled macrofinancial risks
particularly in recent years have been
the sudden changes in risk perceptions
in conjunction with the weak global
economic outlook and the extremely
volatile capital flows. The plummeted
commodity prices and particularly that
of oil and geopolitical tensions arose
as new sources of instability. In this
respect, the risks and uncertainties
against the growth of all developing
economies in general emerge as
follows:
• The Fed’s normalization of its
monetary policy and the potential
effects thereof on developing
economies,
• Sustained fragility in the Eurozone
• Aggravated concerns that the global
economic outlook worsened due to
the fact that the oil prices, which
quickly slumped to their lowest
levels of the past five years, affected
the economies of oil exporting
countries,
• Geopolitical tensions that
have regained vigor in various
geographies across the world.
Although the Turkish economy has
received well-deserved credit for
its growth performance in the past
decade, that same performance also
brought along the current deficit
issue. It is common knowledge that the
Turkish economy is unable to attain
growth without producing current
deficit, and is fragile in the face of
interrupted capital inflows due to its
Risks and an Assessment by the Governing Body / Activities of the Committee of Early Determination of Risk
inherent imbalances. In a conjuncture
of decreased global risk appetite,
the financing of growth constitutes
a highly critical agenda item for the
Turkish economy.
During 2015, the Fed’s decisions,
geopolitical developments, the
course of oil prices and domestic
political agenda will obviously lead
to volatile periods in economy. Such a
conjuncture might easily pave the way
for potentially significant deviations
in various economic parameters,
including credit rates, loan utilization,
housing and car sales, which are
interrelated with the production
performance of the insurance industry.
Yet, in general, the insurance industry
is expected to perform more positively
in 2015 than it did in 2014.
The compensation amounts that
might result from earthquakes and
other catastrophe risks that exceed
the upper limits of various existing
agreements are of a nature that might
lead the company to suffer losses of a
magnitude that cannot be made up for
in a typical operating year. Modeling
software is used to determine the
magnitude of an earthquake in
İstanbul and the potential losses
that would arise therefrom, and the
potential margin of error incorporated
in such software is also taken into
consideration when determining
the final protection level. Scenario
analysis is employed to establish
some uncertainties that cannot be
calculated by modeling programs, such
as personal injury, motor own damage
claims, tsunami, post-earthquake fire,
changes in our protection level due
to volatile exchange rates, inflation,
high level coverage in conjunction
with loss of profit, and a portfolio that
expands during the course of the year,
whereas a certain safety margin is
allowed for some other uncertainties.
It is considered that the total amount
of protection the company obtains
for catastrophe risks is sufficient
for a 1000-year earthquake, which
is the minimum model according to
the Reinsurance Strategy.Although it
is not deemed vital when a potential
earthquake in İstanbul is considered
individually, a Contingency Action and
Funding Plan and a Business Continuity
Plan have been formulated for the
management of potential market,
credit and operational risks that might
be triggered simultaneously by such an
earthquake. The operability of these
plans is tested at regular intervals.
Low operating profitability is at the
top of the risk elements that are critical
for the company, which is the case
also for all companies in the sector
that are engaged in non-life branches.
This predicament that results from
excessive price competition and
prevents accumulation of capital is
anticipated to disappear gradually,
in parallel with the future depth to
be achieved by the Turkish Insurance
Industry, which constantly grows
other than in periods of crises. Another
expectation is that the problem of
technical profitability will be mitigated
significantly by the contribution to
be lent to operational efficiency by
company-wide projects conducted
within the frame of a comprehensive
transformation program.
Other Matters and Financial Statements / Report on the Audit of Board of Directors’ Annual Report Based on Standards on Auditing which is a
Component of the Turkish Auditing Standards Published by the Public Oversight Accounting and Auditing Standards Authority (“POA”)
Report on the Audit of Board of Directors’ Annual Report
Based on Standards on Auditing which is a Component of the Turkish Auditing Standards Published by the
Public Oversight Accounting and Auditing Standards Authority (“POA”)
Convenience Translation into Englısh of the Independent Auditor’s Report Related to Annual Report Originally Issued in Turkish
To Anadolu Anonim Türk Sigorta Şirketi General Assembly,
Report on the Audit of Board of Directors’ Annual Report Based on Standards on Auditing which is a Component of
The Turkish Auditing Standards Published by The Public Oversight Accounting and Auditing Standards Authority
(“POA”)
We have audited the accompanying annual report of Anadolu Anonim Türk Sigorta Şirketi (the “Company”), for the year ended
31 December 2014.
Board of Directors’ Responsibility for the Annual Report
Pursuant to the article 514 of the Turkish Commercial Code numbered 6102 (“TCC”) and Communiqué on Individual
Retirement Saving and Investment System” (“Communiqué”) issued on 7 August 2007 dated and 26606 numbered,
management is responsible for the preparation of the annual report fairly and consistent with the financial statements and for
such internal control as management determines is necessary to enable the preparation of such annual report.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s annual report based on our audit in accordance with article 397
of the TCC and Communiqué whether the financial information included in the accompanying annual report is consistent with
the audited financial statements expressed in the auditor’s report of the Company dated 29 January 2015 and provides fair
presentation.
Our audit has been conducted in accordance with the Standards on Auditing which is a component of the Turkish Auditing
Standards (“TAS”) published by the POA and the insurance legislation. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial information
included in the annual report is consistent with the financial statements and provide fair presentation. An audit also includes
performing audit procedures in order to obtain audit evidence about the historical financial information. The procedures
selected depend on the auditor’s judgment. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Opinion
In our opinion, the financial information included in the annual report is consistent, in all material respects, with the audited
financial statements and provides a fair presentation.
Report on Other Regulatory Requirements
In accordance with the third clause of the article 402 of TCC, no material issue has come to our attention that shall be reported
about the Company’s ability to continue as a going concern in accordance with TAS 570 Going Concern.
Akis Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.
A member of KPMG International Cooperative
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Other Matters and Financial Statements / An Assessment of the Board Directors by the Corporate Governance Committee
An Assessment of the Board Directors by the
Apart from the CEO, the Board of
Directors consists of non-executive
members.
Chairman of the Board and CEO
functions are carried out by different
individuals.
Taking into consideration that there
are no non-corporate ultimate
shareholders with a controlling
interest in our company, it is thought
that the Board Directors naturally
possess the advantage to act
independently and therefore, to be
impartial in their decisions, upholding
the interests of our company and
stakeholders above everything else.
The Board of Directors meets regularly
and at least monthly as pre-scheduled,
and at any time as and when deemed
necessary. The Board of Directors met
12 times in 2014. The Board Directors,
in principle, attend every meeting.
Care is paid to determine the Board
meeting date during the immediately
preceding meeting, followed by
written invitation. It is intended to
set the meeting date so as to allow
all Directors to participate, and save
for unforeseeable exceptional events,
the Board meetings are held with the
participation of all Directors.
The Board meeting agenda is
determined by the Chairman of the
Board of Directors in line with the
proposals of the CEO and the Board
Directors.
Utmost care is paid to ensure that the
information and documents about the
topics covered in the Board meeting
agenda are made available for the
examination of the Directors at least
five days in advance, and when such
timing cannot be met, efforts are spent
to ensure equal flow of information to
the Board Directors.
Each Director is entitled to one
vote and none has weighted vote or
affirmative/negative vetoing rights.
Pursuant to the Articles of
Incorporation, the Board of Directors
convenes on the basis of absolute
majority and makes decisions with the
absolute majority of Directors present
in the meeting.
Pursuant to the company’s Articles of
Incorporation;
The Board of Directors is authorized
to pass decisions on any and all acts
and transactions that are necessary
for the achievement of the company’s
operating scope, save for those
for which the General Assembly is
authorized as per the law and the
Articles of Incorporation.
Without prejudice to the duties and
powers that cannot be delegated as
set out in Article 375 of the Turkish
Commercial Code and in other
articles, the Board of Directors may
delegate management, in part of in
whole, by way of an internal bylaws
in accordance with Article 367 of the
Turkish Commercial Code.
The Board of Directors fulfills its
responsibilities remaining outside
the scope of its basic functions taking
into consideration the opinions and
recommendations of executive bodies
and committees. Such responsibilities
include, but are not limited to the
following:
• Approving the company’s annual
budget and business plans,
• Preparing the company’s annual
reports and finalizing the same to be
presented to the General Assembly,
• Ensuring that the General Assemblies
are held in compliance with the
legislation and the company’s
Articles of Incorporation,
• Taking necessary action in relation
to General Assembly decisions,
• Approving the executives’ career
plans and rewarding provided to
them,
• Determining the company’s policies
about Shareholders, stakeholders
and Public Relations,
• Determining the company’s
disclosure policy,
• Setting the codes of ethics for the
company and its employees,
• Establishing the operating principles
of committees; ensuring their
efficient and productive functioning,
• Taking necessary action so as to
ensure the company’s organizational
structure responds to current
circumstances,
• Examining the activities of former
boards of directors.
Other Matters and Financial Statements / An Assessment of the Board Directors by the Corporate Governance Committee
The Board of Directors consists of
eleven Directors, which number
enables efficient organization of
the activities of the Board. Two
independent Directors serve on the
company’s Board of Directors.
Although there are no set rules on nonindependent Directors’ undertaking
other duties outside the company, the
Directors do not have any other duties
apart from their natural duties in the
entities they represent and from those
in the establishments owned by the
entities they represent. Yet, Board
Directors devote sufficient amount of
time for company affairs, and exercise
their powers prudently and within
the frame of good faith, possessing all
necessary knowledge to ensure full
performance of the duty.
Past experiences, and outside positions
held, if any, of the independent Board
Directors are disclosed in their
résumés and presented on our website
and in our annual report.
When fulfilling its decision-making
function, the Board of Directors acts on
the basic consideration of:
• Maximizing the fair value of the
company,
• Pursuing the company operations
so as to ensure long-term and stable
earnings for our Shareholders,
• Maintaining the delicate balance
between the Shareholders and the
company’s need to grow.
Fatih Gören In the formation of the Board of
Directors, care is given to;
• Ensure that the nominees are
present in the meeting at the time of
election to the seats on the Board of
Directors,
• Inform the Shareholders about the
nominees,
• A llow Shareholders to ask questions
to the nominees,
• Inform the Shareholders, during
the General Assemblies, on other
companies on the boards of which
Director nominees serve and on the
compliance or non-compliance to
internal regulations set exclusively
on this topic.
Directors just starting to serve on
the Board are offered an orientation
program covering the following at a
minimum:
• Introduction with our executives and
visits to the company’s units,
• The CVs and performance
assessments of our executives,
• Strategic goals, current status and
issues of the company,
• Market share, financial structure
and performance indicators of the
company.
mathematics, statistics or engineering
fields. More than half of the Board
Directors must have graduated from
a four-year university minimum, and
have knowledge and experience in at
least one of the fields mentioned above.
The Directors possess these
qualifications and have;
• Satisfactory knowledge and skills in
banking and insurance business,
• The skill to read and analyze
financial statements and reports,
• Basic knowledge about the
legal regulations governing our
company, and about general market
circumstances,
• The will and the opportunity to
regularly attend the Board meetings
for the period of time for which they
are elected to serve.
The Board of Directors adopted the
necessary measures for preventing
undisclosed information and/or trade
secrets from being disseminated out of
the company.
Pursuant to legislation, general
managers of insurance companies
must have graduated from a four-year
university minimum, and have at least
ten years experience in any one of
insurance, banking, economy, business
management, accounting, law, finance,
Hasan Hulki Yalçın
Deputy Chief Executive and Board Director and Member of the Corporate
Member of the Corporat
Governance Committee
Board Director and
Head of the Corporate
Other Matters and Financial Statements / Corporate Governance Principles Compliance Report
Corporate Governance Principles Compliance Report
PART I - STATEMENT OF COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES
Our company firmly believes that Corporate Governance Principles are as critical as financial performance, and that putting these
principles into practice bears utmost importance both for the development of national and international capital markets and for
the best interests of our company.
Our company implements the principles that are set as compulsory principles by the Corporate Governance Communiqué Serial:
II-17.1.
Within this context, the company’s Articles of Incorporation do not cover provisions stipulating;
· Stakeholder participation in the company’s management,
· Expansion of the scope of minority rights beyond the provisions of applicable legislation.
Hence, minority rights are not represented on the Board of Directors.
Since the company’s Articles of Incorporation do not include a provision about making donations, the company does not have a
donations policy.
Our company does not have a specific policy for the number of woman members on the Board of Directors.
The principles that are not yet implemented, which are exceptional, have not led to any conflict of interest among the
stakeholders to date.
At the Annual General Assembly Meeting convened on 25 March 2014 in accordance with the provisions of the Turkish
Commercial Code no. 6102, it has been agreed to amend Article 4 of the company’s Articles of Incorporation. The said
amendment has been registered on 10 April 2014, and the announcement for such registration was promulgated in the Turkish
Trade Registry Gazette issue 8551 dated 16 April 2014.
The assessment and determinations of the level of compliance achieved by our company to the corporate governance principles,
and opinions regarding the scope of the compliance level and ideas on its qualitative improvement are presented below.
PART II - SHAREHOLDERS
2.1 Shareholder Relations Department
An Investor Relations Unit has been set up in the company in 2005. Messrs. Fatih Gören, Murat Tetik, Barış Hüseyin Şafak and
Cem Çözer have been serving in the Investor Relations Unit.
The head of the unit is Mr. Fatih Gören, Deputy Chief Executive, who also serves as a member of the Corporate Governance
Committee. Mr. Gören holds a Corporate Governance Rating License.
Contact information for our employees working in this unit is as follows.
Name
Mr. Fatih Gören
Mr. Murat Tetik
Mr. Barış H. Şafak
Mr. Cem Çözer
Title
Manager
Supervisor
Specialist
Phone No
0 850 744 00 55
0 850 744 02 55
0 850 744 02 54
0 850 744 01 64
E-mail Address
fgoren@anadolusigorta.com.tr
mtetik@anadolusigorta.com.tr
bsafak@anadolusigorta.com.tr
ccozer@anadolusigorta.com.tr
This unit plays an active part in the protection of shareholding rights and facilitates their exercise, mainly regarding the right to
obtain and review information, and establishes the communication between the Board of Directors and shareholders. All of the
employees serving in the Investor Relations Department possess the required licenses.
The Investor Relations Department reports its activities to the Board of Directors four times a year, on a quarterly basis.
In essence, the Investor Relations Department works to;
· Ensure maintenance of the records about Shareholders in a healthy, secure and up-to-date manner,
· Respond to the Shareholders’ and potential investors’ written information requests about the company, apart from those that
are not publicly disclosed, are of a confidential and/or commercial secret nature,
· Make available to the shareholders such information and disclosures that may have an effect on the exercise of shareholding
rights on the company website in an up-to-date manner
· Ensure that the General Assembly Meetings are convened in accordance with the applicable legislation, the Articles of
Incorporation and other internal regulations,
· Prepare the documents the Shareholders could make use of in the General Assembly,
· Ensure that the results of the voting are recorded and the reports thereon are communicated to the Shareholders,
· Observe and monitor the fulfillment of all liabilities arising from the capital market legislation, including all requirements in
relation to corporate governance and public disclosure,
· Ensure representation of our company in investor relations meetings organized in Turkey or abroad by international
establishments through participation in such events,
· Prepare the presentation materials to be used in meetings.
In 2014, all verbal and written information queries received from researchers and our investors in relation to our company and/
or to publicly disclosed financial statement results were answered. Requests for meetings received during the reporting period
from national and international investment companies were accepted and necessary information was provided. In total, two
teleconferences and 28 investor meetings were held in 2014, 17 of them with foreign investment companies. In these meetings,
presentations were made on our sector and our company, and the investors’ questions were answered.
2.2 Shareholders’ Exercise of Their Right to Obtain Information
All information queries of our Shareholders are answered, apart from those that are trade secrets or undisclosed information.
Information requests received from our shareholders are addressed by our employees in the shareholder relations unit, and are
prudently responded to in a timely, accurate and complete manner, on condition that trade secrets and confidential information
shall be protected.
Information on the topics our Shareholders frequently need and developments that might affect the exercise of their rights are
posted in English and Turkish languages on our website accessible at www.anadolusigorta.com.tr.
Pursuant to applicable legislation, minority Shareholders are entitled to request the General Assembly to appoint a special
auditor for examining certain events.
In 2014, our Shareholders did not request appointment of a special auditor from the General Assembly of Shareholders.
Our Articles of Incorporation contain no provisions stipulating the request for appointment of a special auditor as an individual
right. On the other hand, each shareholder’s request to have a special auditor appointed is reserved, provided that such
shareholder satisfies the requirements under Article 438 of the TCC.
It is believed that all information necessary for healthy exercise of Shareholders’ rights is made available to our Shareholders on
our website, in our annual report and material event disclosures in general, and through individual queries, in particular.
The Shareholders’ queries in relation to the legal and commercial relationships between our company and the real persons or
legal entities with which our company is directly or indirectly associated in terms of capital, management or auditing are also
fulfilled to the extent permitted by the applicable legislation.
All information that might affect the Shareholders’ exercise of their rights is made available to the same on our Internet site in an
updated manner, with a view to expand their right of obtaining information.
2.3 Information About General Assembly Meetings
In 2014, one General Assembly meeting was convened which was the 2013 Annual General Assembly meeting held on 25 March
2014.
The said meeting was held with the participation of Shareholders representing 65.4% or a portion of TL 326.8 million of our
paid-in capital of TL 500 million.
While the company’s Board Directors, other relevant individuals, officials and auditors responsible for drawing up the financial
statements, an official from the Independent Audit Company auditing the financial statements of the company and some
employees participated in the meeting, other stakeholders or media representatives did not attend the meeting.
The announcement on the meeting invitation including the meeting place, date, hour, agenda, and a specimen of a proxy statement
was published at least three weeks prior to the meeting date in the Turkish Trade Registry Gazette, Posta and Radikal daily
newspapers, at www.anadolusigorta.com.tr, Central Registry Agency (CRA) and Public Disclosure Platform (in Turkish: KAP).
Care is taken that General Assembly announcements cover:
·
·
·
·
·
The meeting date and hour
The meeting place,
Agenda,
Necessary information about the agenda items,
Former and current versions of the amended article(s) as approved by the related authorities, if the agenda covers any
amendments to the Articles of Incorporation,
· The body making the invitation,
· The reason for postponement of the original meeting and the meeting quorum for the current one, if the General Assembly is
summoned to reconvene upon postponement of the original one for any reason,
· In ordinary meeting announcements, the address at which the annual report, financial statements, and other documents
related to the General Assembly can be examined.
Financial statements and reports including the annual report; informative documents on the General Assembly meeting
agenda items for which there was a need, and other documents underlying the agenda items; the latest version of the Articles
of Incorporation and the amendment text, if applicable, and the grounds therefor, shall be made available at the company
headquarters and branches for review by our shareholders from the date of the announcement summoning the General Assembly.
All information and documents related to the General Assembly meeting are also accessible on the company website at the
address www.anadolusigorta.com.tr. The following are also posted on the company website: total number of shares reflecting
the company’s shareholding structure and voting rights; grounds for the dismissal or substitution of Board Director(s) and
information on individuals to be nominated to the seats on the Board of Directors, if the General Assembly meeting agenda
contains such dismissal, substitution and/or election; additional items requested to be incorporated in the agenda by
shareholders, Capital Markets Board (CMB) and/or other government authorities and agencies that govern the company; the
relevant Board of Directors decision, if the agenda covers changes to the Articles of Incorporation and the former and new
versions thereof.
During 2014, neither the shareholders possessing management control, nor Board Directors, nor senior executives, nor their
spouses or relatives by blood or marriage unto the second degree engaged in any transactions, on their own or other’s behalf, that
might lead to a conflict of interest with the company and/or its subsidiaries. If such a transaction is planned, then prior approval
shall be sought and information shall be provided at the General Assembly meetings.
In the event that transactions, for which the affirmative votes of the majority of independent Board Directors are required and
the approval of which has been referred to the general assembly by reason of dissenting votes cast, information shall be provided
on the General Assembly decision regarding the actions taken in relation to such transactions. During 2014, there were no
transactions that had not been approved by the majority of impendent Board Directors.
To facilitate participation in the General Assemblies, utmost attention is paid to fully comply with the points stipulated by the
legislation, and it is believed that our shareholders are not faced with any difficulties with regard to participation in General
Assemblies. To date, no notifications to the contrary were received from our Shareholders, either.
The shareholders were informed that the company did not make any charitable donations or grants during the reporting period
under a specific agenda item at the General Assembly Meeting.
Minutes of the General Assembly meeting are delivered to the shareholders upon conclusion of the meeting, and are made
available in Turkish and English languages for electronic access at our website at www.anadolusigorta.com.tr, in order to keep
non-participating shareholders informed.
In the preparation of the General Assembly agenda, care is paid to include each proposal under a separate heading, to word the
agenda headings clearly and in a manner to avoid different interpretations, and not to insert any agenda items like “others” or
“various” as also prohibited by the applicable legislation.
For Shareholders who will have themselves represented in the General Assemblies in proxy, a specimen of a proxy statement is
publicized along with the meeting announcements, and is also made available to Shareholders on the electronic medium.
Topics that are communicated by our shareholders to the company’s Investor Relations Unit, which they would like to be included
in the agenda, are considered by the Board of Directors in the preparation of the agenda.
Pursuant to the applicable legislation and to the Articles of Incorporation, ordinary general assembly must be held within three
months following the end of each fiscal year.
In line with our Articles of Incorporation, General Assemblies are held in the place where our company headquarters is located
and at a venue that will enable participation by all our Shareholders.
Total number of votes that may be cast during the General Assembly is classified on the basis of Shareholders and provided to the
Shareholders at the beginning of the meeting by means of their insertion in the list of attendants.
Questions posed by our Shareholders to the Board of Directors are answered, provided that such questions are essential for
exercise of shareholder rights and are not trade secrets.
The General Assembly Chairman chairs the meeting efficiently and in a manner to ensure that Shareholders can exercise their
rights.
Care is taken to answer every question raised during the General Assembly by the shareholders during the same meeting. If
the question raised is not relevant to the agenda or is too comprehensive to be answered promptly, then the Investor Relations
Department provides written answers within no later than 15 days. All questions raised during the General Assembly Meeting
and the answers provided thereto are publicly disclosed on the company’s website within 30 days following the date of the
General Assembly, the latest.
Directors, authorized employees responsible for the preparation of financial statements and auditors, and other relevant people
to offer explanations on the agenda topics that are of specialty spend their best efforts to be present in the meeting.
In General Assemblies, each agenda item is voted individually, and for the avoidance of doubt in relation to voting results, the
votes are counted and the results are announced to the Shareholders before the General Assembly is concluded.
At the Annual General Assembly held on 25 March 2014, shareholders ratified all of the agenda items below by majority of votes:
1. Election of the Presiding Board and authorization of the Presiding Board to sign the minutes of the General Assembly,
2. Foregoing the reading of the Board of Directors’ 2013 Activity Report as it had been made available beforehand for review
by shareholders; reading the Statutory Auditors’ report and the opinion section of the Independent Auditor’s report for 2012;
discussion on the said reports,
3. Review and ratification of 2013 financial statements,
4. Approval of the membership of the individual elected, as per Article 363 of the Turkish Commercial Code, to the seat vacated on
the Board of Directors during the reporting period,
5. Acquittal of the Board Directors,
6. Amending the company’s dividend distribution policy,
7. Approval of the dividend distribution proposal prepared by the Board of Directors within the framework of the dividend
distribution policy,
8. Approval of the draft amendments to the company’s Articles of Incorporation,
9. Election of the Board Directors and determination of their terms of office,
10. Approval of the permissions granted to the Board Directors to carry out the transactions specified in Articles 395 and 396 of
the Turkish Commercial Code,
11. Determination of remuneration for the Board Directors,
12. Designation of the independent audit firm,
13. Presentation of information on the donations and grants made during the reporting period.
During the General Assembly, none of our shareholders exercised their right to pose questions.
No agenda items have been proposed by our shareholders during the meeting.
Minutes of the General Assemblies are accessible in electronic medium in Turkish and English languages at the website at www.
anadolusigorta.com.tr or in written form.
2.4 Voting Rights and Minority Rights
The company’s capital is divided into 50,000,000,000 shares each with a value of TL 0.01 and entitling their holders to one vote.
There are no cross-shareholding interests between any Shareholder and the company.
The company’s Articles of Incorporation do not set the minority rights to be less than one twentieth of the capital.
Minority shares are not represented in our Board of Directors, which is elected under the discretion of the General Assembly.
There are no upper limits with regard to the number of votes that our Shareholders are allowed to cast in the General Assemblies.
No shares are privileged in terms of voting.
Voting right arises at the time the share is acquired and there are no provisions stipulating exercise of the voting right after lapse
of a certain period of time after the date of acquisition.
Our Articles of Incorporation contain no provisions preventing non-Shareholders from casting votes in proxy in the capacity of
representatives.
Shareholders may exercise their voting rights personally in the General Assemblies or via a third party that may or may not be a
Shareholder.
Each real person Shareholder is represented in the General Assemblies by one person only; in the case that legal entity
Shareholders are represented by several people, only one may cast votes. The person empowered to vote is named in the
certificate of authority.
2.5 Entitlement to Dividends
The important aspects covered in the company’s Dividend Distribution Policy are presented below. The said policy is presented in
the General Assembly Meeting for the information of shareholders, and published in the company’s annual reports and posted on
the corporate website.
The company’s Articles of Incorporation set forth it as a principle to distribute first dividends out of the distributable profit in the
ratio to be set by the General Assembly in accordance with the Capital Markets Board requirements.
Dividend distribution proposals laid down for the approval of the General Assembly by the Board of Directors are formulated so
as to preserve the delicate balance between the expectations of our Shareholders and the company’s need to grow, and paying
due regard to the future expectations for the company’s operations, capital adequacy targets and the prevailing conditions in the
capital markets, as well as the profitability of the company.
In the event that the Board of Directors proposes against distributing profit to the General Assembly, the reasons therefor and
information on the use of retained earnings shall be presented to the shareholders during the General Assembly. The same will
also be included in the annual report and posted on the corporate website.
The dividend policy espoused by the Board of Directors is based on the principle of proposing to the General Assembly the
distribution of at least 30% of the net distributable period profit as bonus shares or in cash.
No shares are privileged in terms of getting share from the profit.
No founder’s bonus certificates are given, nor are dividends paid to the Board Directors.
Pursuant to the Articles of Incorporation, our employees are paid dividends up to three times of their salaries maximum from the
amount remaining after the first dividend is set aside.
Care is paid to effect the dividend payments as soon as possible, taking into consideration the time stipulated by the legislation.
No dividends were distributed in 2014 since the amount remaining after deducting the prior year loss that descended in our
legal records and the General Legal Reserves from the net profit for the period was less than 5% of the paid-in capital that was
specified in the Dividend Distribution Policy
2.6 Transfer of Shares
The company’s Articles of Incorporation contain no provisions restricting the transfer of shareholding interests.
PART III – PUBLIC DISCLOSURE AND TRANSPARENCY
3.1 Company Internet Site and Its Content
The company has an Internet site prepared in Turkish and English languages, accessible at the address www.anadolusigorta.com.
tr. The company website is actively used in providing information and public disclosure.
The company website features the information and data stipulated by the Corporate Governance Principles and regulatory
authorities.
Attention is paid to comments and suggestions received via our website and are taken into consideration at the company. Care is
paid to keep the website up-to-date.
The company’s letterhead contains the website address.
3.2 Annual Report
The company’s annual reports are prepared in sufficient detail to cover the information listed in Corporate Governance
Principles.
The annual activity report is prepared by the Board of Directors and incorporates the declaration that financial statements
present a true and fair view of the company’s financial status and that the company achieved full compliance with the legislation.
PART IV – STAKEHOLDERS
4.1 Keeping Stakeholders Informed
In matters concerning our Shareholders, employees, creditors, customers, suppliers, various NGOs, the Government and potential
investors that might consider investing in our company, i.e. the stakeholders, care is taken to provide information in writing and
to base the relations with such parties on written contracts as much as possible (through electronic mail, corporate website,
Public Disclosure Platform).
In cases where the rights of stakeholders are not regulated by the legislation or contractually, the interests of the stakeholders are
protected within the framework of the rules of good faith and to the extent permitted by the company’s facilities, observing the
company’s credibility at the same time. The necessary structure is in place to enable stakeholders to report such transactions of
the company that are contradictory to the legislation or are unethical.
4.2 Stakeholder Participation in Management
While the Articles of Incorporation contain no provisions on stakeholder participation in the company’s management, the
company’s internal regulations cover practices to this end.
An employee proposal guideline has been formulated. Proposals that are innovative and aimed at improvement are assessed
within the framework of this guideline and put into life across the company.
Agencies Meetings, İ̇şbank Branches Meetings and Managers Meetings are held, where the stakeholders, i.e. employees and
suppliers, share their opinions.
4.3 Human Resources Policy
The basic principles of the company’s human resources policy are stated below.
Job descriptions and distributions, along with the performance criteria are set by the company management and announced to
the employees.
Hiring activities are based on the principle of giving equal opportunities to people of equal qualities. Criteria for hiring are put
into writing on the basis of titles and are followed in practice.
Succession planning is made to identify the new managers to be appointed in cases where it is predicted that changes in a
managerial position will cause hitches in the management of the company.
In decisions on training, transfer and promotion, objective data are used and the company’s interests are observed as much as
possible.
Training plans are formulated aimed at developing our employees’ knowledge and skills.
Company employees are members of the Bank and Insurance Employees Union.
Safe working environment and conditions are provided for our employees; work is undertaken to improve these conditions
depending on social and technological necessities.
Decisions made in relation to our employees or developments concerning them are shared with the employees.
Measures are adopted to prevent discrimination on the basis of race, religion, language and sex among the employees, to ensure
human rights are respected and to protect the employees against internal physical, mental and emotional abuse.
The company does not appoint a representative to carry out the relations with our employees. Yet, there are union
representatives who are designated by the Union of Banking and Insurance Workers organized at our company from amongst our
headquarters and regional branch employees to handle the relations with employees.
No complaints have been received on account of discrimination among company employees.
4.4 Codes of Ethics and Social Responsibility
Codes of ethics setting out the professional ethics that the company and its employees are required to abide by when performing
their activities within the existing laws and regulations is posted on the corporate website.
Attention is paid that the projects offered with cover are in compliance with the applicable environmental safety and public
health legislation.
Within the frame of its commitment to social responsibility, our company extends support to education, academic activities,
sports organizations, and cultural and artistic events. Through the “One Master, Thousand Masters” social responsibility project
launched in 2010 and currently in progress, it is intended to focus the public attention on vanishing vocations and local values,
and to help revive them.
PART V – BOARD OF DIRECTORS
5.1 Structure and Formation of the Board of Directors
The company’s Board of Directors is composed of eleven members so as to enable our Board Directors to work efficiently and
constructively, make decisions swiftly and rationally, and organize the formation and activities of the committees efficiently.
Résumés of our Board Directors are published on the corporate website and in our annual report.
Taking into consideration that there are no non-corporate ultimate Shareholders with a controlling interest in the company, it is
thought that the Board Directors all naturally possess the advantage to act independently, and therefore, to be impartial in their
decisions, upholding the interests of our company and the stakeholders above everything else.
There are two independent members on the Board of Directors. The independent Board Directors have not served as members
for more than six years in the past ten years. Term of office for all Board Directors is one year.
The Corporate Governance Committee, functioning as the Nomination Committee, nominated two candidates as independent
Board Directors on 3 March 2014, and a new candidate to substitute a Director who had resigned on 15 April 2014. The reports
on whether all nominees possess the independence criteria have been presented to the Board of Directors on the said dates.
Independent Board Directors fulfill the independence criteria published in the relevant legislation, and their declarations of
independence have been duly received and incorporated in the annual report. No instances took place during the reporting
period, which would compromise independence. If an instance compromising independence arises, then the independent Board
Director shall present such change immediately to the Board of Directors to be disclosed to the public. In such a case, the Board
Director who loses his independence shall resign as a matter of principle.
Apart from the CEO, the Board of Directors consists of non-executive members. Chairman of the Board and CEO functions are
carried out by different individuals.
Information about our Board Directors is presented below.
Name
Mr. Caner
Çimenbiçer
Mr. Ahmet
Doğan
Arıkan
Mr. Musa
Ülken
Mr. Fahri
Kayhan
Söyler
Title
Chairman
Deputy
Chairman
Member&
CEO
Member
Mr. Hakan
Aran
Member
Mr. Recai
Semih
Nabioğlu
Member
Mr. Hasan
Member
Hulki Yalçın
Mr. Faruk
Karpuz
Mr. Kubilay
Aykol
Mr. Prof.
Savaş
Taşkent
Member
Degree
Bachelor’s
Faculty of
Administrative
Sciences
Bachelor’s
Faculty of
Administrative
Sciences
Bachelor’s
Faculty of
Administrative
Sciences
Bachelor’s
Faculty of Economic
& Administrative
Sciences
Bachelor’s
Faculty of
Engineering
Master’s
Banking & Finance
Master’s
Faculty of Economic
& Administrative
Sciences
High School
Executive /
Entity Worked
Non-Executive
-
-
40 years
Non-Executive
-
-
41 years
Executive
Anadolu Anonim Türk
Sigorta Şirketi
CEO
36 years
Non-Executive
-
Non-Executive
Türkiye İş Bankası A.Ş.
/In-Group
Deputy Chief
Executive Officer
24 years
Non-Executive
/In-Group
Unit Manager
24 years
Section Manager
32 years
Section Manager
18 years
Chair of the
Finance
Department
43 years
Non-Executive
Non-Executive
Non-Executive
/In-Group
/In-Group
/In-Group
Marmara University
/ Non-Group
Özyeğin University
/ Non-Group
-
CEO
Faculty of
Economic &
Administrative
Sciences
When fulfilling its decision-making function, the Board of Directors acts on the basic considerations of;
· Maximizing the fair value of the company,
· Pursuing the company operations so as to ensure long-term and stable earnings for our Shareholders,
· Maintaining the delicate balance between the Shareholders and the company’s need to grow.
Professional
Experience
Non-Executive
Master’s
Faculty of Economic
Member
Non-Executive
& Administrative
Sciences
Master’s
Independent Faculty of Economic
Non-Executive
Member
& Administrative
Sciences
Mr. Assoc.
Master’s
Independent
Prof. Atakan
Faculty of
Member
Yalçın
Engineering
Title Held in the
Entity
38 years
25 years
14 years
In the formation of the Board of Directors, care is given to;
· Ensure the attendance of nominees to the meeting during the election to the seats on the Board of Directors,
· Inform the Shareholders about the nominees,
· Allow Shareholders to ask questions to the nominees,
Our Board of Directors takes care to hold regular monthly meetings.
Approval of the majority of independent Board Directors is sought for the Board of Directors decisions pertaining to all kinds
of the company’s transactions with related parties of material nature as specified in the Corporate Governance Principles
Communiqué, and to furnishing guarantee, pledge and mortgage in favor of third parties. If majority of the independent Board
Directors do not approve the transaction, this is publicly disclosed, providing adequate information on the transaction within the
frame of public disclosure requirements, and the transaction is laid down for the approval of the General Assembly. The matter is
decided in the said General Assembly meetings through voting where the parties to the transaction and their respective related
parties may not cast votes, thus involving other shareholders in such decisions at the General Assembly. Meeting quorum shall
not be sought for General Assembly meetings that will be held for circumstances specified in this article. Decisions are made with
the simple majority of those eligible to cast votes. Board of Directors and General Assembly decisions passed in violation of the
principles herein shall be null and void.
There are no administrative or judicial sanctions imposed against the company or the members of the governing body.
There are no woman members on our Board of Directors, nor is there a policy on this matter.
Although there are no set rules on non-independent Directors’ undertaking other duties outside the company, the Directors
do not have any other duties apart from their natural duties in the entities they work for and from those in the establishments
owned by the entities they work for. Yet, Board Directors devote sufficient amount of time for company affairs, and exercise their
powers prudently and within the frame of good faith, possessing all necessary knowledge to ensure full performance of the duty.
Past experiences, and outside positions held, if any, of the independent Board Directors are disclosed in their résumés and
presented on our website and in our annual report.
5.2 Operating Principles of the Board Of Directors
The Board meeting agenda is determined by the Chairman of the Board of Directors in line with the proposals of the CEO and the
Board Directors.
The Board of Directors met twelve times in 2014.
Care is paid to determine the meeting date so as to allow all Directors to participate. Save for unforeseeable exceptional events,
the Board meetings are held with the participation of all Directors.
Attention is given to set the Board meeting date during the immediately preceding meeting, followed by written invitation.
The existing secretariat responsible for execution of the Board activities, keeping the Directors and auditors informed, and
establishing communication with them was transformed into Board of Directors Reporting Unit in 2005.
The Board of Directors decisions passed in 2014 were adopted with the unanimous votes of the members present in those
meetings.
The Board of Directors holds its first meeting preferably on the date the same is elected.
During the first meeting, the chairman and the deputy chairman of the board are elected, and decisions are made on the job
distribution and establishment of committees.
Board Directors, in principle, attend every meeting.
The Board of Directors takes care to meet regularly and at least monthly as pre-scheduled, and at any time as and when deemed
necessary.
Utmost care is paid to ensure that the information and documents about the topics covered in the Board meeting agenda are
made available for the examination of the Directors at least five days in advance, and when such timing cannot be met, efforts are
spent to ensure equal flow of information to the Board Directors.
Each Director is entitled to one vote and none has weighted vote or affirmative/negative vetoing rights.
The Board of Directors convenes on the basis of majority of its full membership and decisions are passed with the majority of
Directors present in the meeting.
The company’s Board Directors and executives are insured with a coverage of USD 75,000,000 “per claim and annual total”
against the risk of loss they may cause to the company due to their fault in the performance of their duties, within the scope of the
liability insurance policy that names Türkiye İş Bankası A.Ş. and its subsidiaries (İşbank Group) as the Insured.
5.3 Numbers, Structures and Independence of Committees within the Board of Directors
There is an Audit Committee, a Corporate Governance Committee and a Committee of Early Determination of Risk in our
company.
Owing to the structure of the Board of Directors, Corporate Governance Committee also fulfills the functions of Nomination
Committee and Remuneration Committee.
There are two non-executive Board Directors in each one of the Committees.
As a matter of principle, Board Directors do not undertake roles in several committees. However, since all members of the
Audit Committee and the chairman of the Corporate Governance Committee must be elected from amongst independent Board
Directors, our independent Board Directors serve on two different committees.
The Corporate Governance Committee establishes whether the corporate governance principles are implemented in the company,
as well as the grounds for non-implementation, if applicable; identifies conflicts of interest, if any, arising from failure to fully
comply with these principles, and presents proposals to the Board of Directors for the improvement of relevant practices. The
committee also works to create a transparent system regarding identification, assessment, training and rewarding of nominees
eligible for the Board of Directors, and to establish related policies and strategies. The Corporate Governance Committee develops
proposals regarding the numbers of the members of the Board of Directors and executives. It is also charged with establishing
and overseeing the approaches, principles and practices in relation to the performance evaluation, career planning and rewarding
of Board Directors and executives. The committee performs the activities specified in the Compensation Policy and coordinates
the activities of the Investor Relations Department.
The Audit Committee oversees the operation and efficiency of the company’s accounting system, public disclosure of financial
information, independent auditing, internal control and internal audit systems. The committee supervises the selection of the
independent audit firm, preparation of independent audit contracts and initiation of independent audit process, and every phase
of the work carried out by the independent audit firm. The Audit Committee determines the independent audit firm from which
the company will procure services and the services to be supplied therefrom, and submits the same for the approval of the Board
of Directors.
The Audit Committee assesses the conformity of annual and interim financial statements to be publicly disclosed to the
accounting principles pursued by the company, as well as their accuracy and fairness, and reports its written assessments to the
Board of Directors, by incorporating the opinions of the company’s responsible managers and of the independent audit firm.
In 2014, the Audit Committee met four times, holding quarterly meetings, and recorded the outcomes of the meetings in minutes
and submitted the decisions adopted to the Board of Directors. The said decisions reported that the financial statements were
examined, and that they were deemed fit for public disclosure.
The Committee of Early Determination of Risk is responsible for efforts aimed at early detection of risks that might endanger the
existence, progress and survival of the company; ensuring adoption of necessary measures in relation to the identified risks, and
managing the risks. The committee reviews the risk management systems at least once a year.
Prof. Savaş Taşkent, Mr. Hasan Hulki Yalçın and Mr. Fatih Gören serve on the company’s Corporate Governance Committee. The
Committee is headed by Prof. Turkay Berksoy.
Prof. Savaş Taşkent functions as the head of the Audit Committee, and Assoc. Prof. Atakan Yalçın as its member.
The Committee of Early Determination of Risk is headed by Assoc. Prof. Atakan Yalçın, where Hakan Aran serves as a member.
All members of the Audit Committee and the heads of other committees are elected from amongst independent Board Directors.
The company’s CEO does not serve on any committee.
Structures and operating principles of committees have been put into writing and posted on our company website.
Taking into consideration that there are no non-corporate ultimate Shareholders with a controlling interest in the company, it is
thought that the Board Directors all naturally possess the advantage to act independently, and therefore, to be impartial in their
decisions.
5.4 Risk Management and Internal Control Mechanism
Set up in 2006 in order to restructure the risk management systems and processes, the Risk Management Department’s activities
were expanded in scope to cover internal control activities within the frame of the provisions of the “Regulation on the Internal
Systems of Insurance, Reinsurance and Pension Companies” published in the Official Gazette issue 26913 dated 21 June 2008.
Along the same line, the Department was renamed to Risk Management and Internal Control Department.
The primary objectives of the Department’s activities are as follows:
· Measure, assess and control risks independently from executive units,
· Protect company assets,
· Ensure efficient and effective execution of activities in line with the Law and other applicable legislation, internal policies and
guidelines, as well as customary insurance practices,
· Guarantee the reliability, integrity and timely availability of the accounting and financial reporting system.
The basic strategy directed towards the ultimate goal is to carefully plan, conduct and manage risk management and internal
control activities independently, impartially, purposefully, effectively and efficiently, employing a risk-focused approach and
within the frame of applicable legislation and internationally accepted principles and standards. The basic principle in achieving
this goal is to employ the most advanced tools and methods that are available and possible to use.
The activities of the Department are administered directly by the CEO. The Board Director responsible for Internal Systems is also
responsible toward the Board of Directors for the formation of the Department and ensuring, monitoring and coordinating its
operability, adequacy and effectiveness.
All outcomes obtained by examining the risks independently from executive functions are regularly reported by the Department
to the Board Director responsible for Internal Systems, to the CEO and the Board of Directors.
The Board of Directors oversees the efficiency of the risk management and internal control mechanism via the company’s Board
of Inspectors.
5.5 Strategic Goals of the Company
The company’s vision is set as:
”To make our company the insurance brand preferred by everyone who needs insurance, and to achieve a strength that makes it a
reference point in the worldwide insurance industry as well.”
And its mission as:
“In keeping with the deeply-rooted, pioneering, honest and solid corporate values of Anadolu Sigorta, to lead the sector, to help
create a broad public awareness of insurance in Turkey, to implement a customer-focused approach to service, to increase our
financial strength to international standards, to enhance the value of our company.”
Our company’s vision and mission are publicly disclosed on our website accessible at www.anadolusigorta.com.tr.
Our strategic goals are set by our executives with a keen eye on competitive conditions, general economic conjuncture, overall
expectations in national and international financial markets, and the company’s medium and long-term targets.
Strategies and targets proposed are negotiated comprehensively by the Board of Directors on a broad perspective.
Actualizations in relation to approved strategies and targets are reviewed during Board meetings and monthly within the scope
of the assessment of company operations, financial structure and performance level.
In principle, the Board of Directors meets monthly in order to efficiently and continuously fulfills its monitoring and supervision
function.
In the meetings, the basic topics of assessment are the company activities, approved annual budget and target realizations, the
company’s place in the sector, financial structure and performance level, reporting, and compliance of operations to international
standards.
5.6 Financial Rights
Aggregate of the salaries and similar benefits provided to the company’s Board Directors and senior executives are disclosed
in the notes to the financial statements and thereby, incorporated in our annual report. They are also posted on the corporate
website and publicly disclosed.
With a view to giving the shareholders the chance to voice their comments, the remuneration principles for the Board Directors
are presented as a separate item for the information of shareholders. The remuneration policy developed for the company’s
managers and employees at any level is put into writing, presented to the General Assembly for information, and is published on
the company website.
Stock options or payment plans based on the company’s performance are used in the remuneration of our Board Directors,
including the independent Board Directors. Nonetheless, it is believed that the remuneration of independent Board Directors is at
a level that will not prejudice their independence.
The Board Directors and senior executives have never utilized, directly or indirectly, cash or non-cash loans from the company,
nor did the company lent money or gave suretyship or provided any similar guarantee to any Board Director or senior executive.
Other Matters and Financial Statements / Committees Operating Within Anadolu Sigorta and an Assessment by the Board of Directors
Committees Operating Within Anadolu Sigorta and an
Assessment by the Board of Directors
In order to ensure that the Board of
Directors duly performs its duties and
responsibilities, an Audit Committee,
Committee of Early Determination
of Risk, and Corporate Governance
Committee were set up at the
company. The Corporate Governance
Committee also fulfills the functions
of the Nomination Committee and
Remuneration Committee.
The Board of Directors makes all kinds
of resources and support available
necessary for the performance of
their duties by the committees. The
committees hold meetings at the
frequency deemed necessary for
ensuring efficiency of their activities
and specified in their respective
operating principles, and submit the
reports covering information about
their activities and meeting outcomes
to the Board of Directors.
The objectives, formations, operating
principles and procedures, and
activities of our committees are
described below.
Head of Committee: Prof. Savaş
Taşkent
Member: Hasan Hulki Yalçın
Member: Fatih Gören
Objective
Overseeing compliance of the company
with corporate governance principles,
undertaking improvement efforts
thereon, and submitting proposals to
the Board of Directors.
Formation
The Corporate Governance Committee
was set up upon approval by the
Board of Directors’ decision no. 5508
dated 10 March 2005. The provisions
governing the formation, principles
and procedures and activities of the
committee have been based on the
Corporate Governance Communiqué
issued by the Capital Markets Board of
Turkey (CMB) and put into force with
the Board of Directors decision no.
06838 dated 26 June 2014. They are
carried out by the Board of Directors.
The committee consists of a minimum
of two members to be elected from
among directors and the Investor
Relations Manager.
The members will elect the head of the
committee from among themselves.
The head of the committee is elected
from among independent directors.
Non-director individuals, who have
expertise in their respective fields, can
be members of the committee.
If the number of committee members
elected from among Board Directors
is two, then both of them must be nonexecutive directors; if such number is
greater than two, then the majority of
the members must be non-executive
directors. The CEO may not serve on
this committee.
The Investor Relations Managers must
be a full-time employee of the company
and must be assigned as a member of
the Corporate Governance Committee.
A member’s term of office on the
Corporate Governance Committee is
terminated when his/her term of office
on the Board of Directors expires or
upon a decision to such effect by the
Board of Directors.
Operating Procedures and
Principles
• The Corporate Governance
Committee holds at least four
meetings a year, which must take
place at least on a quarterly basis.
• Committee meetings are held with
the attendance of all its members
and decisions are passed with the
votes of the majority of members in
attendance.
• The committee shall keep a
resolution book, in which the
decisions, assigned a sequence
number, will be entered.
• The committee shall enter the
conclusions reached in a meeting
in the minutes, and submit the
assessments made and decisions
passed, along with the grounds
therefor, in a written report to
the Board of Directors within no
later than one month following the
relevant committee meeting.
• Committee decisions shall take
effect upon approval of the Board of
Directors.
• The committee shall forthwith
present its determinations,
assessments and suggestions in
relation to its duties and scope of
responsibilities in writing to the
Board of Directors.
• The committee may invite the
individuals it deems necessary to its
meetings and seek their opinions.
• Investor Relations Unit/Department
shall determine the meeting
agenda of the committee, make
the invitations to the meeting,
establish communication with
committee members, keep the book
of resolutions, and handle other
secretarial tasks for the committee.
• As the committee fulfils its functions,
the Board of Directors shall make
all necessary resources and support
available.
• The committee may seek
independent expert opinion upon
approval of the Board of Directors on
matters that call for expertise and
the committee deems necessary in
relation to its activities. The cost of
the consultancy service needed by
the committee shall be borne by the
company.
• Committee members shall observe
the principles of independence and
impartiality when performing their
duties.
Activities
The committee carries out the
following activities with respect to
corporate governance:
• Establishes whether the corporate
governance principles are
implemented in the company,
as well as the grounds for nonimplementation, if applicable;
identifies conflicts of interest, if any,
arising from failure to fully comply
with these principles, and presents
proposals to the Board of Directors
for the improvement of corporate
governance practices;
• Oversees the activities of the
company’s Investor Relations
Department. Within this context,
the committee sets and regularly
reviews the basic principles for the
company’s communication with
investors;
• Works in cooperation with the
Investor Relations Department to
present suggested improvements for
ensuring efficient communication
between the company and investors,
and elimination and resolution of
potential conflicts to the Board of
Directors;
• Reviews the company’s Corporate
Governance Compliance Report
before it is published within the
company’s Annual Report, and
presents its comments to the Board
of Directors;
• Makes proposals and assessments
regarding the determination
or revision of the company’s
disclosure policy, and presents the
same to the Board of Directors.
The committee reviews that
the Disclosure Policy covers the
minimum content as stipulated by
the legislation with respect to the
company’s communication with
stakeholders, as well as the scope,
quality, consistency and accuracy
of documents, presentations and
explanations prepared by the
company for informative purposes,
and oversees that the same are
developed in accordance with the
Disclosure Policy;
• Carries out activities to ensure that
the corporate governance culture
is established within the company,
and is espoused by managers and
employees working at any level.
The committee follows up the
developments related to corporate
governance in and out of Turkey and
examines their possible implications
for the company.
The duties of the Nomination and
Remuneration Committees shall be
fulfilled by the Corporate Governance
Committee, until these committees
shall have been set up.
The committee’s duties and
responsibilities with respect to
nomination are presented below:
• Works to create a transparent
system regarding identification,
assessment, training and rewarding
of nominees eligible for the Board of
Directors and managerial positions
with administrative responsibility,
and establishes related policies and
strategies;
• Regularly evaluates the structure
and efficiency of the Board
of Directors and presents its
suggestions for possible revisions to
the Board of Directors;
• The committee is charged with
performing the duties set out in
the legislation concerning the
nomination of independent members
to the Board of Directors, which are
announced every year by the Board
and which are compulsory to be
implemented by the group to which
the company is affiliated.
The committee’s duties and
responsibilities with respect to
remuneration are presented below:
• Setting and overseeing the
principles, criteria and practices
applicable for the remuneration of
Board directors and executives with
administrative responsibility, taking
into consideration the company’s
long-term targets;
• Presenting its suggestions regarding
the remuneration to be paid to
administrative responsibility, which
will be determined in view of the
extent the remuneration criteria
have been achieved;
• Developing suggestions and
assessments for the formulation
and revision of the company’s
remuneration policy, which sets out
the remuneration principles for the
administrative responsibility, and
presenting its opinions to the Board
of Directors.
The Corporate Governance Committee
shall fulfill other duties and
responsibilities to be assigned to it by
the Board of Directors in relation to its
field of activity.
Audit Committee
Head of Committee: Prof. Savaş
Taşkent
Member: Assoc. Prof. Atakan Yalçın
Objective
Overseeing the operation and
efficiency of the company’s accounting
system, public disclosure of financial
information, independent auditing
of the company and internal control
system.
Formation
The Audit Committee was set up upon
approval by the Board of Directors’
decision no. 5317 dated 26 June
2003. The provisions governing
the principles and procedures and
activities of the committee have been
based on the Corporate Governance
Communiqué issued by the Capital
Markets Board of Turkey (CMB) and put
into force with the Board of Directors
decision no. 06839 dated 26 June 2014.
They are carried out by the Board of
Directors.
among the Board of Directors
members.
The members will elect the head of the
All members of the committee are
elected from among independent
directors.
To the extent possible, at least one
member of the Audit Committee should
preferably have minimum five years
of experience in audit/accounting and
finance.
A member’s term of office on the Audit
Committee is terminated when his/her
term of office on the Board of Directors
expires or upon a decision to such
effect by the Board of Directors.
Principles
• The committee holds at least four
attendance.
Directors.
Activities
• The committee’s activities and
meeting results shall be described
in the annual report. The annual
report shall also specify the number
of written reports the committee
submitted to the Board of Directors
during the fiscal year.
• Supervises the selection of the
independent audit firm, preparation
of independent audit contracts
and initiation of independent audit
process, and every phase of the work
carried out by the independent audit
firm;
Board of Directors.
• Board of Inspectors/Audit
Department shall determine the
meeting agenda of the committee,
make the invitations to the meeting,
available.
company.
duties.
In essence, the Audit Committee;
• Oversees the operation and
efficiency of the company’s
accounting system, public disclosure
of financial information, independent
auditing, internal control and
internal audit systems;
• Determines the independent audit
firm from which the company will
procure services and the services to
be supplied therefrom, and submits
the same for the approval of the
Board of Directors;
• Establishes the methods and
criteria for the handling and
resolution of complaints received
by the company in relation to the
company’s accounting, internal
control and internal audit systems
and its independent audit; and for
addressing the company employees’
notifications about the company’s
accounting and independent audit
within the frame of confidentiality
principle;
• Assesses the conformity of annual
and interim financial statements
to be publicly disclosed to the
accounting principles pursued
by the company, as well as their
accuracy and fairness, and reports
its written assessments to the
Board of Directors, by incorporating
the opinions of the company’s
responsible managers and of the
independent audit firm.
The Audit Committee shall fulfill
other duties and responsibilities to be
assigned to it by the Board of Directors
in relation to its field of activity.
Committee of Early Determination
of Risk
Head of Committee: Assoc. Prof.
Atakan Yalçın
Member: Hakan Aran
A member’s term of office on the
committee is terminated when his/her
term of office on the Board of Directors
expires or upon a decision to such
effect by the Board of Directors.
Objective
Principles
Managing the risks that might threaten
the existence, progress and survival of
the company.
• The committee holds at least four
Formation
The Committee of Early Determination
of Risk was set up as a result of the
discussion of the General Directorate
proposal no. 3550 dated 24 February
2012, pursuant to Article 4.5.1 of
the Communiqué Serial:IV-56 on
Determination and Implementation
of Corporate Governance Principles
enforced upon its publication in the
Official Gazette issue 28158, dated
30 December 2011. The provisions
governing the formation, principles
and procedures and activities of
the committee have been based on
Article 378 of the Turkish Commercial
Code and the Corporate Governance
Communiqué issued by the Capital
Markets Board of Turkey (CMB) and put
into force with the Board of Directors
decision no. 06840 dated 26 June 2014.
They are carried out by the Board of
Directors.
among the Board directors.
The members shall elect the head of the
The head of the committee shall be
elected from among independent
directors. Non-director individuals,
who have expertise in their respective
fields, can be members of the
committee.
If the committee is formed of two
members, then both of them must
be non-executive directors; if such
number is greater than two, then the
majority of the members must be nonexecutive directors. The CEO may not
serve on this committee.
attendance.
Directors.
Board of Directors.
• Risk Management Unit/Department
shall determine the meeting
agenda of the committee, make
the invitations to the meeting,
available.
company.
duties.
Activities
of Risk:
• Works to early detect the risks
that might endanger the existence,
progress and survival of the
company, to ensure necessary
measures are adopted in relation to
the identified risks, and to manage
the risk;
• Informs the Board of Directors
of its opinions and comments in
writing regarding the creation
and development of the company’s
risk management system which
will be aimed at minimizing the
impact of risks that might affect the
shareholders in particular and all
stakeholders in general;
• Reviews the company’s risk
management systems at least on an
annual basis;
• Oversees that risk management
practices are carried out in
accordance with the decisions of
the Board of Directors and the
committee;
• Reviews the determinations and
assessments about risk management
that will be incorporated in the
company’s annual report.
of Risk shall fulfill other duties and
responsibilities to be assigned to it by
the Board of Directors in relation to its
field of activity.
Other Matters and Financial Statements / An Assessment of the Operation of the Independent Audit Firm in 2014 Activity Period via the Audit
Committee
An Assessment of the Operation of the Independent
Audit Firm in 2014 Activity Period via the Audit
Committee
Formation and Independence of the
Independent (External) Audit Firm
Periodic financial statements and their
footnotes are prepared in a manner
to represent the actual financial
status and within the framework of
existing legislation and insurance
business accounting standards. They
are subjected to independent auditing
and publicly disclosed at time intervals
stipulated by the legislation.
The independent audit firm we work
with is alternated at certain intervals,
and an independent audit firm is
selected for a maximum of 7 fiscal
years for regular and/or special audit.
At least two years are allowed to pass
before re-signing a regular and/or
special audit contract with the same
independent audit firm.
Assoc. Prof. Atakan Yalçın
Member of the Audit Committee
External auditing of our company
is conducted in a fully independent
manner, and the external auditor
performs the relevant tasks
adhering strictly to the principles of
accuracy, professional integrity and
straightforwardness, without being
involved in any conflicts of interests
that might restrict its independence.
The external auditor auditing our
company acts independently and
also refrains from any activity that
might lead third parties to doubt its
independence.
No service is obtained, directly or
indirectly from the firms we obtain
independent audit service, save for
the audit service itself, and no fees
are paid to these firms, apart from the
reasonable audit fee at current market
conditions.
The factors that contribute to the
independence of the firms we obtain
independent audit service from are
the existence of our Audit Committee,
the efficient accounting and internal
audit system in place at the company,
and strongly established ethical rules
attaching importance to correct public
disclosures.
Independent conduct of the external
auditing of our company testifies
to the accuracy and veracity of our
financial statements in the face of the
public, and is perceived as guarantee
by our Shareholders. The independent
opinion of the external auditor further
strengthens our company’s corporate
image in that they enhance the
reliability of our financial statements.
Having made it a principle to undertake
public disclosure and to assure
transparency in line with its ethical
values, our company earns the trust of
its investors by giving importance to
independence of the external auditor,
and therefore, aims to serve the
development of national economy by
contributing to accumulation of capital.
Head of the Audit Committee
Other Matters and Financial Statements / Human Resources Practices at Anadolu Sigorta
Human Resources Practices at Anadolu Sigorta
Human Resources Policy
Career Development
Our company is proud to be the first
national insurance company in Turkey,
established in 1925 at the directives
of Mustafa Kemal Atatürk. Ever since
its establishment, our company has
continuously grown and developed and
has been recognized and acknowledged
as the grande école of the Turkish
insurance industry.
Various career paths within the
frame of job families are available at
the company. Employees recruited
into any job family and level have
the opportunity to advance to senior
management positions in the company.
Utmost importance is given to our
employees as they are the ones to
undertake the biggest duty in carrying
out our company’s key policies. For
this reason, the primary goal of our
human resources policies and practices
is to identify our company’s needs for
personnel in line with its objectives
and strategies and assist the creation
of human resources that are open to
change and are focused on continuous
success by recruiting high-quality
people, motivating them, evaluating
their performance, and encouraging
interaction and communication among
individuals and groups.
Our company’s human resources
strategy is defined as “Creating the
organizational climate conducive to
promoting creativity and innovation
directed at ensuring customer
satisfaction, and establishing a culture
of superior performance supporting
employees’ development. In keeping
with this strategy, employees
successfully completing the training
and development plans designed for
the relative job families can advance
to a higher level, if they display
the performance and capabilities
required for the relevant level in the
predetermined time.
When rising to the specialist position,
employees take the promotion
exam that differs according to the
job families and positions, and
thus undergo assessment of their
qualification for the technical knowhow and competence levels required by
the related position.
Our employees in specialist position,
which is the midpoint for all of our
positions, are offered dual career
paths, which give the option of
advancing as a manager or a specialist
in the relevant field. Career paths at
this level are shaped and supported
within the scope of the company’s
Development Center Initiative. The
initiative that assesses managerial
and specialist competencies provides
our employees with personalized
development plans, while supporting
them with various resources, readying
them for the next level. A number of
training opportunities are provided to
our employees at any level who join us
and become a member of our team in
line with the competencies they need
to acquire to further their careers, as
well as their existing skills.
Other Matters and Financial Statements / Human Resources Practices at Anadolu Sigorta
Performance Management
Social Benefits
Training
Our employees are evaluated
twice a year in line with specific
performance criteria. The content
of such evaluation varies depending
on the competence requirements on
the basis of job families. On the basis
of the results of these performance
evaluations, an employee’s training
needs are identified and a career plan
is developed.
Our company’s employees are entitled
to a variety of social rights and benefits
in keeping with current conditions.
The healthcare costs of our employees
and their dependant family members
are covered by our company under its
Healthcare Assistance Regulations.
All our personnel are able to fulfill all
their healthcare needs free of charge
through the company’s outsourced
healthcare system. Employees are
provided with free transportation
services to and from work and with
lunches as well.
Competency-based training programs
and technical and professional
trainings required by our employees’
jobs are provided in line with their
career progression plans.
Job Guarantee:
Our employees enjoy a substantial
degree of job guarantee within the
framework of unionization composed
by the Union and our company.
Compensation Policy
Our employees’ salaries are adjusted
in accordance with the terms of a
collective bargaining agreement that
is renewed every two years and with
annual or semi-annual raises based on
current conditions.
Retirement Benefits
Our employees are covered by two
private pension funds that have
been set up in accordance with the
company’s special status. The pensions
paid by these funds enable former
employees to enjoy a good standard of
living during their retirement years.
Training has special importance at
Anadolu Sigorta owing to the fact
that our company is an organization
that fills managerial positions
from within. Therefore, orientation
program and professional training
provided to new-hires are followed
by necessary planning for improving
their managerial skills, thereby
extending the necessary support to our
employees.
In addition to their salaries, employees
receive extensive fringe benefits as
well.
Other Matters and Financial Statements / Agenda of the Annual General Assembly Meeting
Agenda of the Annual General Assembly Meeting
ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ
AGENDA OF THE ANNUAL GENERAL ASSEMBLY
DATED 24 MARCH 2015
1. Opening, election of the Presiding Board and authorization of the Presiding Board to sign the minutes of the Annual
General Assembly
2. Presentation of and discussion on the Board of Directors’ 2014 Activity Report, and presentation of the Independent Audit
Report for 2014 fiscal year
3. Review, deliberation and ratification of 2014 financial statements
4. Approval of the membership of the individual elected, as per Article 363 of the Turkish Commercial Code, to the seat
vacated on the Board of Directors during the reporting period
5. Individual acquittal of Board Directors
6. Information on dividend distribution policy and decision on profit distribution
7 Election of the Board Directors and determination of their terms of office
8. Authorizing the Board Directors to perform the transactions specified in Articles 395 and 396 of the Turkish Commercial
Code
9. Determination of remuneration for the members of the Board of Directors
10.Designation of the independent audit firm
11.Presentation of information on the donations and grants made during the reporting period
Other Matters and Financial Statements / Dividend Distribution Proposal
Dividend Distribution Proposal
The dividend distribution proposal prepared within the frame of the company’s Dividend Distribution Policy and submitted
for the approval of the General Assembly is presented below:
Our company booked a net profit for the current period of TL 71,559,946 on its 2014 operations. The company’s legal records
show TL 70,639,674 as profit for the period, which remains after deducting the undistributed amount of TL 920,272, which
is the sales income on immovables and participation shares that is decided to be maintained in a special fund account under
liabilities to benefit from the exemption provisions granted under Article 5 of the Corporate Tax Law no. 5520 and to be used
in capital increases as and when necessary.
In the Capital Markets Board of Turkey (CMB) meeting of 27 January 2010, it has been resolved that companies obliged to
draw up consolidated financial statements should compute the net distributable profit taking into account the net profit
for the period descending in the consolidated financial statements that will be drawn up and publicly disclosed as per the
Communiqué II-14.1 on Principles of Financial Reporting in the Capital Market, provided that the net distributable profit can
be covered from the sources reflected in their legal records. After consolidation of Anadolu Hayat Emeklilik A.Ş. and after
deducting the undistributed sales income on immovables and participation share, a consolidated net profit of TL 73,197,477
arises.
Accordingly, it is proposed as follows:
• TL 3,531,984 TL, which is 5% of the net profit figure that arises according to legal records, be set aside as general legal
reserves,
• TL 21,000,000, which is 30.14% of TL 69,665,493 that is the amount remaining according to the CMB, be distributed as first
dividend to shareholders
• TL 1,459,965 be set aside as dividend to employees as per the Articles of Incorporation,
• TL 4,464,773 be set aside as statutory reserves as per the Articles of Incorporation,
• TL 40,182,952 that remains after the items mentioned above be allocated to extraordinary reserves, and
sales income on immovables and participation shares in the amount of TL 920,272 that is not available for distribution be
transferred to relevant reserves so as to benefit from the exemption provisions set out in Article 5 of the Corporate Tax Law
no. 5520.
Other Matters and Financial Statements / 2014 Profit Distribution Table
2014 Profit Distribution Table
ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ 2014 Profit Distribution Proposal (TL)
1. Paid-in/Issued Capital
500,000,000
2. General Legal Reserves (according to legal records)
30,779,762
If there are privileges for distribution of profits according to the Articles of IncorporaNone
tion, information on such privileges
Based on CMB
Based on Legal Records
3. Profit for the Period (*)
94,279,437
91,721,634
4. Taxes Payable (-)
21,081,960
21,081,960
5. Net Profit for the Period (=)
73,197,477
70,639,674
6. Losses in Prior Years (-)
0
0
7. General Legal Reserves (-)
3,531,984
3,531,984
8. NET DISTRIBUTABLE PROFIT FOR THE PERIOD (=)
69,665,493
67,107,690
9. Donations during the Year (+)
0
10. Net Distributable Profit for the Period Including Donations
69,665,493
11. First Dividend to Shareholder
- Cash
21,000,000
- Bonus Shares
0
- Total
21,000,000
12. Dividends Distributed to Owners of Privileged Shares
13. Other Dividends Distributed (to Board Members, Employees, etc.)
1,459,965
14. Dividends Distributed to Owners of Redeemed Shares
15. Second Dividend to Shareholders
0
16. General Legal Reserves
0
17. Statutory Reserves
4,464,773
4,464,773
18. Special Reserves
19. EXTRAORDINARY RESERVES
40,182,952
40,182,952
20. Other Resources to be Distributed
- Prior Year Profit
- Extraordinary Reserves
- Other Distributable Reserves Pursuant to the Law and the
Articles of Incorporation
(*) In the profit for the period ended 31 December 2014, the amounts of TL 920,272 as per the legal records and TL 1,394,625 as per the CMB, which arises
from 75% of the profit from sales of immovables and participation shares and which has been set aside to be followed up under the account item “Profit Not
Available for Distribution” under shareholders’ equity, was not taken into account as per Article 5 of the Corporate Tax Law no. 5520.
DIVIDEND RATIO CHART
GROUP
TOTAL DIVIDENDS
DISTRIBUTED
CASH (TL)
B
TOTAL
21,000,000
21,000,000
BONUS
(TL)
0
0
TOTAL DIVIDENDS DISTRIBUTED /
NET DISTRIBUTABLE PROFIT FOR
THE PERIOD
DIVIDENDS PER SHARE WITH A
NOMINAL VALUE OF TL 1
RATIO (%)
AMOUNT (TL)
RATIO (%)
30.14%
30.14%
0.042
0.042
4.20%
4.20%
Other Matters and Financial Statements / 2014 Annual Report Compliance Statement
2014 Annual Report Compliance Statement
Our company’s 2014 Annual Report has been drawn up within the frame of the principles and procedures set forth in the
Regulation on the Financial Structures of Insurance, Reinsurance and Pension Companies, which went into force upon its
publication in the Official Gazette issue 26606 dated 7 August 2007.
Murat TETİK
Accounting and Financial
Affairs Manager
Fatih GÖREN
Officer
Musa ÜLKEN
Caner ÇİMENBİÇER
Chairman
Detailed Income Statement
I-TECHNICAL PART
Explanation
A- Non-Life Technical Income
1- Earned Premiums (Net of Reinsurer Share)
1-1. Premiums (Net of Reinsurer Share)
1.2- Change in Unearned Premium Provisions (Net of Reinsurers Shares
and Reserves Carried Forward) (+/-)
1.3- Changes in Unexpired Risk Reserves (Net of Reinsurer Share and
Reserves Carried Forward)(+/-)
1.4- Changes in Ongoing Risk Reserves (Net of Reinsurer Share and
Reserves Carried Forward)(+/-)
2- Investment Income Transfered from Non-Technical Divisions
3- Other Technical Income
4- Accrued Salvage and Subrogation Income
B- Non-Life Technical Expense (-)
1- Realized Claims (Net of Reinsurer Share)
1.1- Claims Paid (Net of Reinsurer Share)
1.2- Changes in Outstanding Claims Provisions (Net of Reinsurer Share and
Reserves Carried Forward) (+/-)
2- Changes in Bonus and Discount Provisions (Net of Reinsurer Share and
3- Changes in Other Technical Reserves (Net of Reinsurer Share and
4- Operating Expenses (-)
5- Other Technical Expenses
C- Non Life Technical Profit (A-B)
II- NON TECHNICAL PART
C- Non Life Technical Profit (A-B)
J- Total Technical Profit (C)
K- Investment Income
1- Income from Financial Investments
2- Income from Sales of Financial Assets
3- Revaluation of Financial Assets
4- Foreign Exchange Gains
5- Dividend Income from Affiliates
6- Income form Subsidiaries and Joint Ventures
7- Real Estate Income
8- Income from Derivative Instruments
9- Other Investments
10- Investment Income transferred from Life Technical Division
L- Investment Expenses (-)
1- Investment Management Expenses (including interest) (-)
2- Valuation Allowance of Investments (-)
3- Losses On Sales of Investments (-)
4- Investment Income Transferred to Non - Life Technical Division (-)
5- Losses from Derivative Instruments (-)
6- Foreign Exchange Losses (-)
7- Depreciation Expenses (-)
8- Other Investment Expenses (-)
M- Income and Expenses (+/-)
1- Reserves (Provisions) Account (+/-)
2- Rediscount Account (+/-)
3- Mandatory Earthquake Insurance Account (+/-)
4- Inflation Adjustment Account (+/-)
5- Deferred Tax Asset Accounts (+/-)
6- Deferred Tax Liability Expense (+/-)
7- Other Income and Revenues
8- Other Expense and Losses (-)
9- Prior Period Income
10- Prior Period Losses (-)
N- Net Profit/(Loss)
1- Profit/(Loss) Before Tax
2- Taxes Provisions (-)
3- Net Profit (Loss) after Tax
4- Inflation Adjustment Account (+/-)
Accident
Illness-Health Motor Vehicles
Aircrafts
Watercrafts
64,954,732
54,362,002
62,537,257
253,945,062
242,507,645
256,547,252
844,775,207
786,541,563
790,728,883
13,325,739
13,181,748
5,542,081
27,059,708
26,199,568
29,096,322
1,366,653
0
0
0
0
-9,541,908
-14,039,607
-4,187,319
495,329
-1,683,491
0
10,584,962
3,810
3,958
-26,547,592
-8,244,907
-10,402,605
0
11,117,403
320,015
0
-250,364,266
-199,455,063
-198,906,106
0
50,396,109
2,276,330
5,561,204
-759,462,075
-555,299,019
-529,436,786
7,144,338
143,991
0
0
-5,544,598
-4,440,034
-4,795,520
-1,213,263
929,731
1,090
-70,681
-30,566,164
-28,112,601
-24,275,881
0
0
0
0
0
2,157,699
-1,013,436
-17,159,414
-129,835
38,407,140
-548,957
0
-44,314,719
-6,594,484
3,580,797
-25,862,233
-3,035,177
-186,178,682
-14,949,198
85,313,132
355,485
0
-1,103,260
-1,303
7,781,141
-3,836,719
0
-2,181,869
-271,694
-3,506,456
Marine
Fire and
Natural
Disasters
45,543,157
39,714,367
40,340,630
216,863,052
190,560,310
213,840,185
137,016,707
126,142,312
135,732,901
0
0
0
-626,263
-23,279,875
General Motor Vehicles
Losses
Liability
-9,590,589
0
0
0
4,902,828
25,291,052
10,652,104
8,961
93,174
16,190
917,002
918,516
206,101
-22,747,046 -153,398,996 -117,885,471
-10,150,613
-98,225,647
-85,643,583
-14,920,610
-82,711,965
-80,504,221
4,769,997
-15,513,682
-5,139,362
0
-12,338,972
-257,462
22,796,111
-10,577,300
-38,744,510
-5,851,538
63,464,057
-1,204,683
-26,240,845
-4,796,359
19,131,236
0
0
0
Aircraft
Liability
General
Liability
Credit
Financial
Losses
Legal
Protection
Total
774,667,390
704,976,162
698,476,272
5,047,411
4,300,100
4,105,767
48,798,440
38,439,929
78,975,999
-1,322,665
31,085
0
1,892,330
1,587,757
1,580,171
8,650,516
7,214,790
7,606,342
2,441,216,788
2,235,759,340
2,325,110,061
571,005
0
0
0
0
0
1,937,657
5,928,885
194,334
-7,344,021
31,085
7,586
0
64,109,747
65,238
5,516,244
-771,782,556
-579,959,219
-437,438,283
0
747,307
4
0
-4,532,699
-3,957,501
-231,156
-33,192,048
9,893,884
3,989
460,638
-175,437,543
-164,062,227
-27,857,034
0
0
2
-1,353,752
-25,347
-28,288
-718,605
0
304,573
1
0
677,339
146,455
-1,033
0
0
0
0
0
-142,520,936
0
-181,604,847
-10,218,490
2,884,835
-3,726,345
0
-575,198
0
514,712
-136,205,192
0
-11,224,043
-151,273
-126,639,103
690,317
0
2,941
0
-1,348,011
147,489
-139,439
670,501
-178
2,569,670
-391,551
-64,027,405
0
-27,260,973
1,435,720
190,509,410
6
2,788,809
0
12,159,230
-2,340,244 -2,319,957,257
-646,815 -1,738,079,062
-162,466 -1,412,362,273
-484,349
-325,716,789
0
-1,693,311
-118
6,310,272
-15,970,035
-522,686,229
-43,221,932
121,259,531
0
0
121,259,531
121,259,531
258,928,065
130,174,857
31,151,423
19,421,434
59,970,980
16,000,000
0
1,815,006
205,678
188,686
0
-275,809,588
-136,623
-3,509,979
-7,713,065
-190,509,410
-184,509
-49,954,025
-23,801,977
0
-11,736,101
-20,360,660
-3,360,281
0
0
7,396,097
0
5,142,412
-553,670
0
0
71,559,946
92,641,906
-21,081,960
71,559,946
0
31 December 2014 Unconsolidated Financial Statements
Together with Independent Auditors’ Report Thereon
Other Matters and Financial Statements / 31 December 2014 Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon
Together with Independent Auditors’ Report Thereon
Akis Bağımsız Denetim ve Serbest
Muhasebeci Mali Müşavirlik A.Ş.
Kavacık Rüzgarlı Bahçe Mah.
Kavak Sok. No: 3
Beykoz 34805 İstanbul
Telephone +90 (216) 681 90 00
Fax
+90 (216) 681 90 90
İnternet
www.kpmg.com.tr
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of Anadolu Anonim Türk Sigorta Şirketi
Introduction
We have audited the accompanying unconsolidated balance sheet of Anadolu Anonim Türk Sigorta Şirketi (“the Company”) as
at 31 December 2014 and the related unconsolidated statement of income, unconsolidated statement of changes in equity and
unconsolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other
explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these unconsolidated financial statements in accordance
with the accounting principles and standards, in force as per the insurance legislation. This responsibility includes: designing,
implementing and maintaining internal systems relevant to the preparation and fair presentation of financial statements that
are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.
Independent Auditors’ Responsibility
Our responsibility is to express an opinion on these unconsolidated financial statements based on our audit. We conducted our
audit in accordance with audit standards in force as per the insurance legislation. Those standards require that we comply with
relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements
are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal systems relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal system. An audit also
includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit
opinion.
Basis for Qualified Conclusion
As explained in Note 17, as of 31 December 2014 the accompanying unconsolidated financial statements included a general
provision amounting to TL 7.702.761 provided by the Company management considering the circumstances which may arise
from any changes in economy or market conditions recognized as expense in the prior periods. The total amount had been
expensed in previous years’ financial statements.
Together With Independent Auditors’ Report Thereon
Qualified Opinion
In our opinion, except for the effect on the unconsolidated financial statements of the matter described in the basis for qualified
opinion paragraph above, nothing has come to our attention that causes us to believe that the accompanying unconsolidated
financial statements give a true and fair view of the unconsolidated financial position of Anadolu Anonim Türk Sigorta Şirketi as
at 31 December 2014, and of its unconsolidated financial performance and its unconsolidated cash flows for the year then ended
in accordance with the accounting principles and standards (see Note 2) in force as per the insurance legislation.
Report on Other Legal and Regulatory Requirements
1) Pursuant to the fourth paragraph of Article 398 of Turkish Commercial Code (“TCC”) no. 6102; Auditors’ Report on System and
Committee of Early Identification of Risks is presented to the Board of Directors of the Company on 29 January 2015.
2) Pursuant to the fourth paragraph of Article 402 of the TCC; no significant matter has come to our attention that causes us to
believe that the Group’s bookkeeping activities, financial statements and group’s financial statements for the period 1 January 31 December 2014 are not in compliance with TCC and provisions of the Company’s articles of association in relation to financial
reporting.
3) Pursuant to the fourth paragraph of Article 402 of the TCC; the Board of Directors provided us the necessary explanations and
required documents in connection with the audit.
Alper Güvenç, Certified Public Accountant
Partner
29 January 2015
İstanbul, Türkiye
Additional paragraph for convenience translation to English:
As explained in Note 2.1.1, the accompanying unconsolidated financial statements are not intended to present the financial
position and results of operations of the Company in accordance with the accounting principles and practices generally accepted
in countries and jurisdictions other than Turkey.
Unconsolidated Financial Statements
As at and for the Year Ended 31 December 2014
We confirm that the unconsolidated financial statements and related disclosures and footnotes as at 31 December 2014 which
were prepared in accordance with the accounting principles and standards in force as per the regulations of T.C. Başbakanlık
Hazine Müsteşarlığı are in compliance with the “Code Related to the Financial Reporting of Insurance, Reinsurance and Private
Pension Companies” and the financial records of our Company.
İstanbul, 29 January 2015
Musa ÜLKEN
Member of Board of Directors
Fatih GÖREN
Executive Vice President of Finance
Murat TETİK
Accounting Reporting Manager
Taylan MATKAP
Actuary
Unconsolidated Financial Statements
Contents
UNCONSOLIDATED BALANCE SHEET
104-108
UNCONSOLIDATED STATEMENT OF INCOME
109-111
UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY
112
UNCONSOLIDATED STATEMENT OF CASH FLOWS
114
UNCONSOLIDATED STATEMENT OF PROFIT DISTRIBUTION
115
NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS
116-178
NOTE 1 General Information
116
NOTE 3 Critical accounting estimates and judgments in applying accounting policies
135
NOTE 2 NOTE 4 NOTE 5 NOTE 6 NOTE 7 NOTE 8 NOTE 9 NOTE 10 NOTE 11 NOTE 12 NOTE 13 NOTE 14 NOTE 15 NOTE 16 NOTE 17 NOTE 18
NOTE 19 NOTE 20 NOTE 21 NOTE 22 NOTE 23 NOTE 24 NOTE 25 Summary of significant accounting policies
Management of insurance and financial risk
Segment reporting
Tangible assets
Investment properties
Intangible assets
Investments in associates
Reinsurance assets and liabilities
Financial assets
Loans and receivables
Derivative financial instruments
Cash and cash equivalents
Equity
Other reserves and equity component of DPF
Insurance contract liabilities and reinsurance assets
Investment contract liabilities
Trade and other payables and deferred income
Financial liabilities
Deferred tax
Retirement benefit obligations
Other liabilities and provisions
Net insurance premium
Fee revenue
118
136
149
152
153
154
154
155
156
160
162
162
162
164
165
169
169
170
170
171
171
172
172
NOTE 26 Investment income
172
NOTE 28 Assets held at fair value through profit or loss
172
NOTE 27 NOTE 29 NOTE 30 NOTE 31 NOTE 32 NOTE 33 NOTE 34 NOTE 35 NOTE 36 NOTE 37 NOTE 38 NOTE 39 NOTE 40 NOTE 41 NOTE 42
NOTE 43 NOTE 44 NOTE 45
NOTE 46 NOTE 47 Net income accrual on financial assets
Insurance rights and claims
Investment contract benefits
Other expenses
Operating expenses
Employee benefits expenses
Financial costs
Income tax
Net foreign exchange gains
Earnings per share
Dividends per share
Cash generated from operations
Convertible bonds
Redeemable preference shares
Risks
Commitments
Business combinations
Related party transactions
Events after the reporting date
Others
172
172
172
172
173
173
173
173
174
174
174
174
174
174
174
175
175
176
177
178
Unconsolidated Balance Sheet
As at 31 December 2014
Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1
(Currency: Turkish Lira (TL))
ASSETS
I- Current Assets
A- Cash and Cash Equivalents
1- Cash
2- Cheques Received
3- Banks
4- Cheques Given and Payment Orders
5- Bank Guaranteed Credit Card Receivables with Maturities Less Than Three Months
6- Other Cash and Cash Equivalents
B- Financial Assets and Financial Investments with Risks on Policyholders
1- Available-for-Sale Financial Assets
2- Held to Maturity Investments
3- Financial Assets Held for Trading
4- Loans and Receivables
5- Provision for Loans and Receivables
6- Financial Investments with Risks on Saving Life Policyholders
7- Company’s Own Equity Shares
8- Diminution in Value of Financial Investments
C- Receivables from Main Operations
1- Receivables from Insurance Operations
2- Provision for Receivables from Insurance Operations
3- Receivables from Reinsurance Operations
4- Provision for Receivables from Reinsurance Operations
5- Cash Deposited to Insurance and Reinsurance Companies
6- Loans to the Policyholders
7- Provision for Loans to the Policyholders
8- Receivables from Individual Pension Operations
9- Doubtful Receivables from Main Operations
10- Provision for Doubtful Receivables from Main Operations
D- Due from Related Parties
1- Due from Shareholders
2- Due from Associates
3- Due from Subsidiaries
4- Due from Joint Ventures
5- Due from Personnel
6- Due from Other Related Parties
7- Rediscount on Receivables from Related Parties
8- Doubtful Receivables from Related Parties
9- Provision for Doubtful Receivables from Related Parties
E- Other Receivables
1- Finance Lease Receivables
2- Unearned Finance Lease Interest Income
3- Deposits and Guarantees Given
4- Other Miscellaneous Receivables
5- Rediscount on Other Miscellaneous Receivables
6- Other Doubtful Receivables
7- Provision for Other Doubtful Receivables
F- Prepaid Expenses and Income Accruals
1- Prepaid Expenses
2- Accrued Interest and Rent Income
3- Income Accruals
4- Other Prepaid Expenses
G- Other Current Assets
1- Stocks to be Used in the Following Months
2- Prepaid Taxes and Funds
3- Deferred Tax Assets
4- Job Advances
5- Advances Given to Personnel
6- Inventory Count Differences
7- Other Miscellaneous Current Assets
8- Provision for Other Current Assets
I- Total Current Assets
Note
14
14
14
14
14
11
11
11
11
11
12
12
2.21,12
12
12
12
12
12
12
17
10,12
19
12
12
12
Audited
Current Period
31 December 2014
1.606.048.714
37.347
-1.356.733.446
(171.519)
249.449.440
-644.067.957
442.140.789
73.670.047
134.054.733
----(5.797.612)
797.454.113
751.368.850
(7.677.067)
47.022.365
-6.739.965
---113.380.507
(113.380.507)
----------3.595.183
--358.718
3.236.465
---208.618.353
205.884.923
-2.733.430
-3.956.342
212.258
1.848.492
-165.103
4.631
-1.725.858
-3.263.740.662
The accompanying notes are an integral part of these unconsolidated financial statements.
Audited
Current Period
31 December 2013
1.153.712.216
49.256
-901.838.577
(1.025.984)
252.850.367
-631.008.746
456.674.161
94.501.549
85.630.648
----(5.797.612)
773.925.226
736.197.976
(9.475.078)
42.073.701
-5.128.627
---102.829.158
(102.829.158)
72.324
----72.324
----2.968.734
--394.512
2.574.222
---197.767.110
196.680.406
-1.086.704
-11.284.255
888.774
9.659.923
-39.175
35.897
-660.486
-2.770.738.611
ASSETS
II- Non-Current Assets
A- Receivables from Main Operations
5- Cash Deposited for Insurance and Reinsurance Companies
8- Receivables from Individual Pension Business
B- Due from Related Parties
C- Other Receivables
D- Financial Assets
1- Investments in Equity Shares
2- Investments in Associates
3- Capital Commitments to Associates
4- Investments in Subsidiaries
5- Capital Commitments to Subsidiaries
6- Investments in Joint Ventures
7- Capital Commitments to Joint Ventures
8- Financial Assets and Financial Investments with Risks on Policyholders
9- Other Financial Assets
10- Impairment in Value of Financial Assets
E- Tangible Assets
1- Investment Properties
2- Impairment for Investment Properties
3- Owner Occupied Property
4- Machinery and Equipments
5- Furniture and Fixtures
6- Motor Vehicles
7- Other Tangible Assets (Including Leasehold Improvements)
8- Tangible Assets Acquired Through Finance Leases
9- Accumulated Depreciation
10- Advances Paid for Tangible Assets (Including Construction in Progress)
F- Intangible Assets
1- Rights
2- Goodwill
3- Pre-operating Expenses
4- Research and Development Costs
5- Other Intangible Assets
6- Accumulated Amortization
7- Advances Paid for Intangible Assets
G- Prepaid Expenses and Income Accruals
1- Prepaid Expenses
2- Income Accruals
3- Other Prepaid Expenses and Income Accruals
H- Other Non-Current Assets
1- Effective Foreign Currency Accounts
2- Foreign Currency Accounts
3- Stocks to be Used in the Following Years
6- Other Miscellaneous Non-Current Assets
7- Amortization on Other Non-Current Assets
8- Provision for Other Non-Current Assets
II- Total Non-Current Assets
TOTAL ASSETS
Note
9
9
6
6,7
6
6
6
6
6
6
6
8
8
8
8
8
17
17
21
21
Audited
Current Period
31 December 2014
-----------------------------391.400.000
-391.400.000
--------32.307.481
6.982.776
-6.788.733
34.554.018
11.775.416
1.362.223
19.401.127
4.166.354
(52.723.166)
-62.254.841
-16.250.000
--88.079.901
(43.804.438)
1.729.378
3.562.038
3.562.038
--20.125.763
----20.125.763
---509.650.123
3.773.390.785
Audited
Prior Period
31 December 2013
-----------------------------368.200.000
-368.200.000
--------34.793.176
6.982.776
-6.520.974
32.800.391
11.331.085
1.285.983
18.262.277
4.166.354
(46.556.664)
-62.812.033
-16.250.000
--54.879.873
(27.614.154)
19.296.314
34.671
34.671
--16.191.701
----16.191.701
---482.031.581
3.252.770.192
LIABILITIES
III- Short-Term Liabilities
A- Financial Liabilities
1- Borrowings from Financial Institutions
2- Finance Lease Liabilities
3- Deferred Leasing Costs
4- Current Portion of Long Term Debts
5- Principal Instalments and Interests on Bonds Issued
6- Other Financial Assets Issued
7- Valuation Differences of Other Financial Assets Issued
8- Other Financial Liabilities
B- Payables Arising from Main Operations
1- Payables Arising from Insurance Operations
2- Payables Arising from Reinsurance Operations
3- Cash Deposited by Insurance and Reinsurance Companies
4- Payables Arising from Individual Pension Business
5- Payables Arising from Other Main Operations
6- Discount on Payables from Other Main Operations
C- Due to Related Parties
1- Due to Shareholders
2- Due to Associates
3- Due to Subsidiaries
4- Due to Joint Ventures
5- Due to Personnel
6- Due to Other Related Parties
D- Other Payables
1- Deposits and Guarantees Received
2- Medical Treatment Payables to Social Security Institution
3- Other Miscellaneous Payables
4- Discount on Other Miscellaneous Payables
E- Insurance Technical Provisions
1- Reserve for Unearned Premiums - Net
2- Reserve for Unexpired Risks - Net
3- Mathematical Provisions - Net
4- Provision for Outstanding Claims - Net
5- Provision for Bonus and Discounts - Net
6- Other Technical Provisions - Net
F- Provisions for Taxes and Other Similar Obligations
1- Taxes and Funds Payable
2- Social Security Premiums Payable
3- Overdue, Deferred or By Instalment Taxes and Other Liabilities
4- Other Taxes and Similar Payables
5- Corporate Tax Payable
6- Prepaid Taxes and Other Liabilities Regarding Current Period Income
7- Provisions for Other Taxes and Similar Liabilities
G- Provisions for Other Risks
1- Provision for Employee Termination Benefits
2- Provision for Pension Fund Deficits
3- Provisions for Costs
H- Deferred Income and Expense Accruals
1- Deferred Income
2- Expense Accruals
3- Other Deferred Income and Expense Accruals
I- Other Short-Term Liabilities
1- Deferred Tax Liabilities
3- Other Various Short-Term Liabilities
III - Total Short-Term Liabilities
Note
19
19
10,19
19
19
17
17
2.26,17
17
19
35
19
23
23
23
Audited
Current Period
31 December 2014
---------302.045.983
218.662.943
-7.277.133
-76.105.907
--------47.561.333
2.916.577
16.625.234
28.268.772
(249.250)
2.214.197.954
1.159.630.507
40.379.346
-1.014.188.101
--27.386.135
25.121.485
2.264.650
--21.081.960
(21.081.960)
-----80.052.263
45.447.065
34.605.198
-1.433.153
--1.433.153
2.672.676.821
Audited
Prior Period
31 December 2013
---------327.033.095
260.656.406
-3.105.906
-63.270.783
--------56.534.780
3.037.036
26.428.955
27.696.412
(627.623)
1.799.130.444
1.097.540.759
13.118.373
-688.471.312
--27.491.024
25.772.003
1.719.021
---------64.374.616
39.363.495
25.011.121
-1.187.490
--1.187.490
2.275.751.449
LIABILITIES
Audited
Current Period
31 December 2014
Audited
Prior Period
31 December 2013
--
--
--
--
4- Bonds Issued
--
--
IV- Long-Term Liabilities
Note
--
--
--
--
-----
--
--
--
---
---
--
--
5- Payables Arising from Other Operations
--
--
----
6- Discount on Payables from Other Operations
--
--
--
---
---
--
--
5- Due to Personnel
--
--
----
D- Other Payables
--
--
--
---
---
--
--
--
68.252.637
52.282.601
--
--
--
---
---
E-Insurance Technical Provisions
17
F-Other Liabilities and Relevant Accruals
1- Other Liabilities
3- Other Liabilities and Expense Accruals
-17
--
--
---
68.252.637
52.282.601
--
--
--
--
---
--
--
--
--
23
12.628.115
11.720.142
23
12.628.115
11.720.142
--
--
H-Deferred Income and Expense Accruals
--
1- Deferred Income
2- Expense Accruals
--
---
I- Other Long-Term Liabilities
--
--
--
2- Other Long-Term Liabilities
---
--
64.002.743
IV- Total Long-Term Liabilities
80.880.752
--
--
EQUITY
V- Equity
A- Paid in Capital
1- (Nominal) Capital
2- Unpaid Capital
3- Positive Capital Restatement Differences
4- Negative Capital Restatement Differences
5- Register in Progress Capital
B- Capital Reserves
1- Share Premiums
2- Cancellation Profits of Equity Shares
3- Profit on Asset Sales That Will Be Transferred to Capital
4- Currency Translation Adjustments
5- Other Capital Reserves
C- Profit Reserves
1- Legal Reserves
2- Statutory Reserves
3- Extraordinary Reserves
4- Special Funds
6- Other Profit Reserves
D- Retained Earnings
1- Retained Earnings
E- Accumulated Losses
1- Accumulated Losses
F-Net Profit/(Loss) for the Period
1- Net Profit for the Period
2- Net Loss for the Period
3- Profit not Available for Distribution
V- Total Equity
TOTAL EQUITY AND LIABILITIES
Note
2.13,15
15
15
15
15
15
15
15
15
Audited
Current Period
31 December 2014
500.000.000
500.000.000
----8.809.304
----8.809.304
439.463.962
30.779.762
7.262.220
20.545.601
-336.666.816
44.209.563
----71.559.946
70.639.674
-920.272
1.019.833.212
3.773.390.785
Audited
Prior Period
31 December 2013
500.000.000
500.000.000
----8.161.541
----8.161.541
401.373.667
30.638.111
6.993.082
18.123.361
-302.035.089
43.584.024
--(63.981.132)
(63.981.132)
67.461.924
66.814.161
-647.763
913.016.000
3.252.770.192
Unconsolidated Statement of Income
For the Year Ended 31 December 2014
I-TECHNICAL SECTION
1.1- Written Premiums (Net of Reinsurer Share)
1.1.1- Written Premiums, gross
1.1.2- Written Premiums, ceded
1.1.3- Premiums Transferred to Social Security Institutions
1.2- Change in Reserve for Unearned Premiums (Net of Reinsurer Shares and Less the Amounts
Carried Forward)
1.2.1- Reserve for Unearned Premiums, gross
1.2.2- Reserve for Unearned Premiums, ceded
1.2.3 - Reserve for Unearned Premiums, Social Security Institution Share
1.3- Change in Reserve for Unexpired Risks (Net of Reinsurer Share and Less the Amounts
Carried Forward)
1.3.1- Reserve for Unexpired Risks, gross
1.3.2- Reserve for Unexpired Risks, ceded
2- Investment Income - Transferred from Non-Technical Section
3- Other Technical Income (Net of Reinsurer Share)
3.1- Other Technical Income, gross
3.2- Other Technical Income, ceded
B - Non-Life Technical Expense
1- Incurred Losses (Net of Reinsurer Share)
1.1.1- Claims Paid, gross
1.1.2- Claims Paid, ceded
1.2- Change in Provisions for Outstanding Claims (Net of Reinsurer Share and Less the Amounts
Carried Forward)
1.2.1- Change in Provisions for Outstanding Claims, gross
1.2.2- Change in Provisions for Outstanding Claims, ceded
2- Change in Provision for Bonus and Discounts (Net of Reinsurer Share and Less the Amounts
Carried Forward)
2.1- Provision for Bonus and Discounts, gross
2.2- Provision for Bonus and Discounts, ceded
3- Change in Other Technical Reserves (Net of Reinsurer Share and Less the Amounts Carried
Forward)
4- Operating Expenses
5- Change in Mathematical Provisions (Net of Reinsurer Share and Less the Amounts Carried
Forward)
5.1- Change in Mathematical Provisions, gross
5.2 - Change in Mathematical Provisions, ceded
6- Change in Other Technical Provisions (Net of Reinsurer and Less the Amounts Carried
Forward)
6.1- Change in Other Technical Provisions, gross
6.2- Change in Other Technical Provisions, ceded
C- Net Technical Income-Non-Life (A - B)
D- Life Technical Income
1.2- Change in Reserve for Unearned Premiums (Net of Reinsurer Share and Less the Amounts
Carried Forward)
1.3- Change in Reserve for Unexpired Risks (Net of Reinsurer Share and Less the Amounts
Carried Forward)
2- Investment Income
3- Unrealized Gains on Investments
4.1- Other Technical Income. gross
4.2- Other Technical Income. ceded
5- Accrued Salvage Income
Note
17
17
10,17
17,29
17
17
29
17
17,29
17
10,17
17,29
17
17
Audited
Current Period
31 December 2014
2.441.216.789
2.235.759.340
2.325.110.061
3.004.830.066
(605.617.965)
(74.102.040)
Audited
Prior Period
31 December 2013
1.966.929.968
1.825.789.170
2.067.216.007
2.749.704.405
(618.521.175)
(63.967.223)
(27.260.973)
(30.198.184)
2.937.211
190.509.410
2.788.809
2.788.809
-12.159.230
(2.319.957.258)
(1.738.079.061)
(1.412.362.272)
(1.553.196.954)
140.834.682
(9.020.850)
(12.778.086)
3.757.236
123.220.226
2.924.374
2.924.374
-14.996.198
(1.866.051.751)
(1.346.087.004)
(1.146.966.155)
(1.249.199.210)
102.233.055
----
----
(62.089.748)
(68.928.251)
4.900.846
1.937.657
(325.716.789)
(420.158.951)
94.442.162
(232.405.987)
(318.105.539)
71.144.433
14.555.119
(199.120.849)
(245.037.920)
45.917.071
29
32
(15.970.036)
(522.686.229)
(12.422.591)
(462.834.106)
2.25
2.25
(43.221.932)
(43.221.932)
-121.259.531
------
(44.708.050)
(44.708.050)
-100.878.217
------
----------
----------
----
----
----
----
I-TECHNICAL SECTION
E- Life Technical Expense
1.2- Change in Provisions for Outstanding Claims (Net of Reinsurer Share and Less
the Amounts Carried Forward)
2- Change in Provision for Bonus and Discounts (Net of Reinsurer Share and Less
3- Change in Mathematical Provisions (Net of Reinsurer Share and Less the
Amounts Carried Forward)
3.1.1- Change in Actuarial Mathematical Provisions, gross
3.1.2- Change in Profit Share Provisions (Provision for Financial Investments with
Risks on Saving Life Policyholders), gross
3.2- Change in Mathematical Provisions, ceded
3.2.1- Change in Actuarial Mathematical Provisions, ceded
3.2.2- Change in Profit Share Provisions (Provision for Financial Investments with
Risks on Saving Life Policyholders). ceded
4- Change in Other Technical Reserves (Net of Reinsurer Share and Less the
6- Investment Expenses
7- Unrealized Losses on Investments
8- Investment Income Transferred to the Non-Life Technical Section
F- Net Technical Income- Life (D - E)
G- Pension Business Technical Income
1- Fund Management Income
2- Management Fee
3- Entrance Fee Income
4- Management Expense Charge in case of Suspension
5- Income from Private Service Charges
6- Increase in Value of Capital Allowances Given as Advance
7- Other Technical Expense
H- Pension Business Technical Expense
1- Fund Management Expense
2- Decrease in Value of Capital Allowances Given as Advance
I- Net Technical Income - Pension Business (G - H)
Note
Audited
Current Period
31 December 2014
------
Audited
Prior Period
31 December 2013
------
----
----
----
--------
---------------------
----
--------
---------------------
II-NON-TECHNICAL SECTION
C- Net Technical Income - Non-Life (A-B)
F- Net Technical Income - Life (D-E)
I - Net Technical Income - Pension Business (G-H)
J- Total Net Technical Income (C+F+I)
1- Income from Financial Assets
2- Income from Disposal of Financial Assets
3- Valuation of Financial Assets
5- Income from Associates
6- Income from Subsidiaries and Joint Ventures
7- Income from Property, Plant and Equipment
8- Income from Derivative Transactions
10- Income Transferred from Life Section
L- Investment Expense
1- Investment Management Expenses (inc. interest)
2- Diminution in Value of Investments
3- Loss from Disposal of Financial Assets
4- Investment Income Transferred to Non-Life Technical Section
5- Loss from Derivative Transactions
6- Foreign Exchange Losses
7- Depreciation and Amortization Expenses
8- Other Investment Expenses
M- Income and Expenses From Other and Extraordinary Operations
1- Provisions
2- Rediscounts
3- Specified Insurance Accounts
4- Monetary Gains and Losses
5- Deferred Taxation (Deferred Tax Assets)
6- Deferred Taxation (Deferred Tax Liabilities)
7- Other Income
8- Other Expenses and Losses
9- Prior Year’s Income
10- Prior Year’s Expenses and Losses
N- Net Profit for the Period
1- Profit for the Period
2- Corporate Tax Provision and Other Fiscal Liabilities
Note
4.2
4.2
4.2
4.2
4.2
4.2
4.2
4.2
4.2
4.2
4.2
6,8
47
47
35
35
35
Audited
Current Period
31 December 2014
121.259.531
--121.259.531
258.928.064
130.174.857
31.151.423
19.421.434
59.970.980
16.000.000
-1.815.006
205.678
188.686
-(275.809.588)
(136.623)
(3.509.979)
(7.713.065)
(190.509.410)
(184.509)
(49.954.025)
(23.801.977)
-(11.736.101)
(20.360.660)
(3.360.281)
--7.396.097
-5.142.413
(553.670)
--71.559.946
92.641.906
(21.081.960)
71.559.946
--
Audited
Prior Period
31 December 2013
100.878.217
--100.878.217
186.213.348
85.749.368
16.004.372
10.576.449
52.709.177
18.000.000
-2.848.377
212.931
112.674
-(187.215.654)
-(4.677.619)
(13.581.516)
(123.220.226)
(99.585)
(28.804.896)
(16.831.812)
-(32.413.987)
(23.892.951)
2.353.934
---(11.654.589)
3.469.073
(2.689.454)
--67.461.924
67.461.924
-67.461.924
--
Unconsolidated Statement of Changes in Equity
Audited Statement of Changes in Equity - 31 December 2013
Notes
I - Balance at the end of the previous year - 31 December 2012
II - Change in Accounting Standards
III - Restated balances (I+II) - 1 January 2013
A- Capital increase (A1+A2)
1- In cash
2- From reserves
B- Purchase of own shares
C- Gains or losses that are not included in the statement of income
D- Change in the value of financial assets
E- Currency translation adjustments
F- Other gains or losses
G- Inflation adjustment differences
H- Net profit for the period
I - Dividends paid
J - Transfers to reserves
II - Balance at the end of the period - 31 December 2013
11,15
15
Paid-in Capital
500.000.000
-500.000.000
------------500.000.000
Own Shares of
the Company
-----------------
Revaluation of
Financial Assets
212.235.915
-212.235.915
-----89.799.174
------302.035.089
Own Shares of
the Company
500.000.000
-500.000.000
------------500.000.000
Revaluation of
Financial Assets
-----------------
Inflation
Adjustments
302.035.089
-302.035.089
-----34.631.727
------336.666.816
Paid-in
Capital
I - Balance at the end of the previous year - 31 December 2013
III - Restated balances (I+II) -1 January 2014
1- In cash
2- From reserves
C- Gains or losses that are not included in the statement of income
I - Dividends paid
IV - Balance at the end of the period - 31 December 2014
11,15
15
Inflation
Adjustments
-----------------
Currency
Translation
Adjustments Legal Reserves
-30.638.111
---30.638.111
-------------------------30.638.111
Currency
Translation
Adjustments Legal Reserves
---------------------------------
Statutory
Reserves
30.638.111
-30.638.111
-----------141.651
30.779.762
Statutory
Reserves
6.993.082
-6.993.082
------------6.993.082
Other Reserves
and Retained
Earnings
6.993.082
-6.993.082
-----------269.138
7.262.220
Other Reserves
and Retained
Earnings
70.474.948
-70.474.948
----(606.022)
-------69.868.926
Net Profit for
the Year
69.868.926
-69.868.926
----625.539
------3.070.003
73.564.468
Net Profit for
the Year
(63.981.132)
-(63.981.132)
---------67.461.924
-63.981.132
67.461.924
Retained
Earnings
--------------(63.981.132)
(63.981.132)
Retained
Earnings
Total
67.461.924 (63.981.132)
--67.461.924 (63.981.132)
------------------71.559.946
---(67.461.924)
63.981.132
71.559.946
--
Total
756.360.924
-756.360.924
----(606.022)
89.799.174
---67.461.924
--913.016.000
Paid-in Capital
913.016.000
-913.016.000
----625.539
34.631.727
---71.559.946
--1.019.833.212
Unconsolidated Statement of Cash Flow
Note
A - Cash flows from operating activities
1- Cash provided from insurance activities
2- Cash provided from reinsurance activities
3- Cash provided from individual pension business
4- Cash used in insurance activities
5- Cash used in reinsurance activities
6- Cash used in individual pension business
7- Cash provided by operating activities
8- Interest paid
9- Income taxes paid
10- Other cash inflows
11- Other cash outflows
12-Net cash provided by operating activities
B - Cash flows from investing activities
1- Proceeds from disposal of tangible assets
2- Acquisition of tangible assets
3- Acquisition of financial assets
4- Proceeds from disposal of financial assets
5- Interests received
6- Dividends received
9- Net cash provided by investing activities
C- Cash flows from financing activities
1- Equity shares issued
2- Cash provided from loans and borrowings
3- Finance lease payments
4- Dividends paid
7- Net cash used in financing activities
D- Effect of exchange rate fluctuations on cash and cash equivalents
E- Net increase in cash and cash equivalents
F- Cash and cash equivalents at the beginning of the year
G- Cash and cash equivalents at the end of the year
19
6, 8
11
14
14
Audited
Current Period
31 December 2014
Audited
Prior Period
31 December 2013
3.153.798.374
--(2.924.054.056)
(6.560.002)
-223.184.316
-(22.930.452)
26.050.558
(37.055.680)
189.248.742
2.854.861.834
6.871.227
-(2.501.075.344)
(1.222.563)
-359.435.154
-980.233
50.333.609
(70.513.485)
340.235.511
-(21.111.793)
(541.175.656)
865.215.792
(142.557.704)
10.000.000
62.448.109
(205.552.139)
27.266.609
1.823.500
(47.756.100)
(714.083.260)
431.437.029
89.565.184
8.000.000
198.407.879
(37.769.638)
(70.375.406)
-------1.701.066
218.216.417
825.512.807
1.043.729.224
-------31.224.213
301.084.318
524.428.489
825.512.807
Unconsolidated Profit Distribution
Note
I. PROFIT DISTRIBUTION
1.1. CURRENT YEAR PROFIT (*)
1.2 TAX AND FUNDS PAYABLE
1.2.1. Corporate Income Tax (Income Tax)
1.2.2. Income tax deduction
1.2.3. Other taxes and Duties
A NET PROFIT (1.1 - 1.2)
1.3. PREVIOUS PERIOD LOSSES (-)
1.4. FIRST LEGAL RESERVE
1.5. STATUTORY FUND (-)
B NET PROFIT DISTRIBUTION [(A-(1.3 + 1.4 + 1.5)]
1.6. FIRST DIVIDEND TO SHAREHOLDERS (-)
1.6.1. Holders of shares
1.6.2. Holders of Preferred shares
1.6.3. Holders of Redeemed shares
1.6.4. Holders of Participation Bond
1.6.5. Holders of Profıt and Loss sharing certificate
1.7. DIVIDEND TO PERSONNEL (-)
1.8. DIVIDENDS TO BOARD OF DIRECTORS (-)
1.9. SECOND DIVIDEND TO SHAREHOLDERS (-)
1.10. SECOND LEGAL RESERVE (-)
1.11. STATUTORY RESERVES (-)
1.12. EXTRAORDINARY RESERVES
1.13. OTHER RESERVES
1.14. SPECIAL FUNDS
II. DISTRIBUTION OF RESERVES
2.2. SECOND LEGAL RESERVES (-)
2.3. COMMON SHARES (-)
2.3.2 Holders of Preferred shares
2.3.4 Holders of Participation Bond
2.3.5 Holders of Profıt and Loss sharing certificate
2.4. DIVIDENDS TO PERSONNEL (-)
2.5.
III. PROFIT PER SHARE
3.1. HOLDERS OF SHARES
3.2. HOLDERS OF SHARES (%)
3.3. HOLDERS OF PREFERRED SHARES
3.4. HOLDERS OF PREFERRED SHARES (%)
IV. DIVIDEND PER SHARE
Audited
Current Period
31 December 2014
Audited
Prior Period
31 December 2013(**)
94.279.437
(21.081.960)
(21.081.960)
--73.197.477
-3.659.874
-69.537.603
-----------------------------------------
66.814.161
----66.814.161
63.981.132
141.651
-2.691.378
---------------269.138
2.422.240
------------------------
(*)
Capital Markets Board’s no.2014/2 in the Weekly Bulletin “Profit Distribution Statement Preparation Guide” in accordance with the profit distribution are based
on the consolidated profit figure. Profit for the year December 31, 2014, no.5 of the Corporate Tax Law than 75% of their income from investments in associates and
real estate sales pursuant to the shareholders’ equity under “Profit not subject to distribution” account the amount of 1.394.625 TL allocated for follow-up taken into
consideration.
(**)
Profit distribution table has not been filled yet due to profit distribution proposal for the year 2014 has not prepared by the Board of Directors.
(***)
The figures of 2013 is filled with the data which is “According to Legal Records” belongs to the Profit Distribution.
Notes to the Unconsolidated Financial Statements
1.1 Name of the Company and the ultimate owner of the group
The shareholding structure of Anadolu Anonim Türk Sigorta Şirketi (“the Company”) is presented below. As at 31 December
2014, the shareholder having indirect control over the shares of Anadolu Anonim Türk Sigorta Şirketi (“the Company”) is Türkiye
İş Bankası A.Ş. (“İş Bankası”).
Shareholder
Other
Paid in Capital
31 December 2014
Shareholding
Shareholding
Amount (TL)
Rate (%)
286.550.106
213.449.894
500.000.000
57,31
42,69
100,00
31 December 2013
Shareholding
Shareholding
Amount (TL)
Rate (%)
286.550.106
213.449.894
500.000.000
57,31
42,69
100,00
1.2 Domicile and the legal structure of the Company, country and the address of the registered office (address of the operating
centre if it is different from the registered office)
The Company was registered in Turkey and has the status of ‘Incorporated Company’. The Company moved from “Büyükdere
Caddesi İş Kuleleri Kule 2 Kat: 22-26, 34330 4. Levent, Istanbul to the new address “Rüzgarlıbahçe Mahallesi, Kavak Sokak,
No:31 34805 Kavacık/İstanbul as of 2 December 2013 and the Company has nine regional offices; two of them established in
İstanbul and others established in Antalya, İzmir, Samsun, Adana, Ankara, Trabzon and Bursa, and a branch in Turkish Republic of
Northern Cyprus.
1.3 Business of the Company
The Company operates in almost all non-life insurance branches consisting of mainly accident, health, motor vehicles, air vehicles,
water vehicles, transportation, fire and natural disasters, general loss, credit, financial losses, and legal protection.
As at 31 December 2014, the Company serves through, 2.485 authorized agencies and 91 unathorized agencies (31 December
2013: 2.468 authorized agencies and 83 unathorized agencies) of which, 2.576 agencies (31 December 2013: 2.551 authorized).
1.4 Description of the main operations of the Company
The Company conducts its operations in accordance with the Insurance Law No.5684 (the “Insurance Law”) issued in 14 June
2007 dated and 26552 numbered Official Gazette and the communiqués and other regulations in force issued by the Turkish
Treasury based on the Insurance Law. The Company operates in insurance branches as mentioned above Note 1.3 Business of the
Company.
The Company’s shares have been listed on the Istanbul Stock Exchange (“ISE”). The company operates in their own specific
laws and regulations for the matters of establishment, auditing, supervision/oversight, accounting and financial reporting in
accordance Capital Market Law No:6362, part of VIII and paragraph of 5 of Article 136.
1.5 The average number of the personnel during the period in consideration of their categories
The average number of the personnel during the period in consideration of their categories is as follows:
Directors
Intermediate directors
Officers
Contracted personnel
Total
31 December 2014
31 December 2013
7
37
3
142
799
988
8
38
3
128
760
937
1.6 Wages and similar benefits provided to the senior management
For the year ended 31 December 2014, wages and similar benefits provided to the senior management including chairman
is amounting to TL 1.034.290 (31 December 2013: TL 948.790) and members of the board of the directors, general manager,
general coordinator, and deputy general managers is amounting to TL 3.915.203 (31 December 2013: TL: 3.918.307)
1.7 Keys used in the distribution of investment income and operating expenses (personnel, administrative, research and
development, marketing and selling, services rendered from third parties and other operating expenses) in the financial
statements
Procedures and principles related to keys used in the financial statements of the companies are determined in accordance with
the 4 January 2008 dated and 2008/1 numbered “Communiqué Related to the Procedures and Principles for the Keys Used in the
Financial Statements Being Prepared In Accordance With Insurance Accounting Plan” issued by the Turkish Treasury.
In accordance with the above mentioned Communiqué, insurance companies are allowed to transfer technical section operating
expense to insurance section through methods determined by Turkish Treasury or by the Company itself. Methods determined by
the Company should be approved by the Turkish Treasury, Known and exactly distinguishable operating expenses are distributed
to related branches directly, while operating expenses are distributed to the sub-branches in accordance with the average of 3
ratios calculated by dividing “number of the policies produced within the last three years”, “gross premium written within the
last three years”, and “number of the claims reported within the last three years” to the “total number of the policies”, “total gross
written premiums” and the “total number of the claims reported”, respectively.
Income from the assets invested against non-life technical provisions is transferred to technical section from non-technical
section; remaining income is transferred to the non-technical section.
1.8 Information on the financial statements as to whether they comprise an individual company or a group of companies
The accompanying financial statements comprise only the unconsolidated financial information of the Company. As further
discussed in note 2.2 - Consolidation, the Company has prepared additionally consolidated financial statements as at and for the
year ended 31 December 2014.
1.9 Name or other identity information about the reporting entity and the changes in this information after previous reporting
date
Trade name of the Company:
Registered address of the head office:
The web page of the Company:
Rüzgarlıbahçe Mahallesi, Kavak Sokak, No:3134805 Kavacık /İstanbul
The information presented above has not any change since the end of the previous reporting period.
1.10 Events after the reporting date
There haven’t been any change at services of the company, recording of this services and company policies after accounting date.
2 Summary of significant accounting policies
2.1 Basis of preparation
2.1.1 Information about the principles and the specific accounting policies used in the preparation of the financial
statements
In accordance with Article 136(5) in Section VIII of the Capital Markets Law, numbered 6362 insurance companies have to
comply with their own specific laws and regulations in matters of establishment, auditing, supervision/oversight, accounting and
financial reporting. Therefore, the Company maintains its books of account and prepares its financial statements in accordance
with the Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”), and other accounting and
financial reporting principles, statements and guidance (collectively “the Reporting Standards”) in accordance with the
“Communiqué Related to the Financial Reporting of Insurance, Reinsurance, and Individual Pension Companies” as promulgated
by the Turkish Treasury based on Article 18 of the Insurance Law and Article 11 of the 4632 numbered Individual Pension
Savings and Investment System Law (‘‘Individual Retirement Law’’).
Although the 4th standard of the Turkish Accounting Standards Board (“TASB”) for the ‘Insurance contracts’ became effective
on 25 March 2006 for the accounting periods that begin on or after 31 December 2005, it is stated that TFRS 4 will not be
implemented at this stage since the second phase of the International Accounting Standards Board project about the insurance
contracts has not been completed yet. In this context, “Communiqué on Technical Reserves for Insurance, Reinsurance and
Individual Pension Companies and the Related Assets That Should Be Invested Against Those Technical Reserves” (“Communiqué
on Technical Reserves”) is published in the Official Gazette dated 7 August 2007, numbered 26606 and became effective on
1 January 2008. Subsequent to the publication of the Communiqué on Technical Reserves, some other circulars and sector
announcements which contain explanations and regulations related to application of the Communiqué on Technical Reserves
are published. Accounting policies applied for the insurance contracts based on these communiqué, circulars and other sector
announcements are summarized on their own captions in the following sections.
Accounting for subsidiaries, associates and joint ventures is regulated with 28 December 2007 dated and 2007/26 numbered
“Circular Related to the Accounting of Subsidiaries, Associates and Joint Ventures”, issued by the Turkish Treasury. It is stated
that, the companies will continue to apply the principles of the related standards of TFRSs for the accounting of subsidiaries,
associates and joint venture until the publication of another regulation on this issue by the Turkish Treasury. “Circular Related to
the Preparation of the Consolidated Financial Statements of Insurance, Reinsurance, and Individual Pension Companies” issued
by the Turkish Treasury in the 31 December 2008 dated and 27097 numbered (4th repeat) Official Gazette, constituted the basis
of consolidation to be effective on the dates that circular specifies.
Additional paragraph for convenience translation to English
The differences between accounting principles, as described in the preceding paragraphs, and the accounting principles generally
accepted in countries, in which the accompanying unconsolidated financial statements are to be distributed, and International
Financial Reporting Standards (“IFRS”), may have significant influence on the accompanying unconsolidated financial statements.
Accordingly, the accompanying unconsolidated financial statements are not intended to present the financial position and results
of operations in accordance with the accounting principles generally accepted in such countries other than Turkey.
2.1.2 Other accounting policies appropriate for the understanding of the financial statements
Accounting in hyperinflationary countries
Financial statements of the Turkish entities have been restated for the changes in the general purchasing power of the Turkish
Lira based on “TAS 29 - Financial Reporting in Hyperinflationary Economies” as at 31 December 2004. TAS 29 requires that financial
statements prepared in the currency of a hyperinflationary economy be stated in terms of the measuring unit current at the
reporting date, and that corresponding figures for previous years be restated in the same terms.
With respect to the declaration of the Turkish Treasury with the article dated 4 April 2005 and numbered 19387, financial
statements as of 31 December 2004 are adjusted for the opening balances of 2005 in accordance with the section with respect
to inflation accounting of the Capital Markets Board (“CMB”) Communiqué No: 25 of Series XI, “Communiqué on Accounting
Standards in Capital Market” published in the Official Gazette dated 15 January 2003 and numbered 25290. Inflation accounting
is no longer applied starting from 1 January 2005, in accordance with the same declaration of the Turkish Treasury. Accordingly,
as at 31 December 2014, non-monetary assets and liabilities and items included in shareholders’ equity including paid-in capital
recognized or recorded before 31 December 2004 in order to reflect inflation adjustments. Non-monetary assets and liabilities
and items included in shareholders’ equity including paid-in capital recognized or recorded after 1 January 2005 are measured at
their nominal values
Other accounting policies
Information regarding other accounting polices is disclosed above in “Note 2.1.1 - Information about the principles and the specific
accounting policies used in the preparation of the financial statements” and each under its own caption in the following sections of
this report.
2.1.3 Valid and presentation currency
The accompanying unconsolidated financial statements are presented in TL, which is the Company’s functional currency.
2.1.4 Rounding scale of the amounts presented in the financial statements
Financial information presented in TL, has been rounded to the nearest TL values.
2.1.5 Basis of measurement used in the preparation of the financial statements
The accompanying financial statements are prepared on the historical cost basis as adjusted for the effects of inflation that lasted
until 31 December 2004, except for the financial assets at fair value through profit or loss, available-for-sale financial assets,
derivative financial instruments and associates which are measured at their fair values unless reliable measures are available.
2.1.6 Accounting policies, changes in accounting estimates and errors
There is not any change in accounting estimates or determined errors in current year. Critical accounting judgements used in
applying the Company’s accounting policies are explained in Note 3 - Critical accounting estimates and judgments in applying
accounting policies.
2.2 Consolidation
“Circular Related to the Preparation of the Consolidated Financial Statements of Insurance, Reinsurance, and Individual Pension
Companies” issued by the Turkish Treasury in the 31 December 2008 dated and 27097 numbered Official Gazette, has been in
force since 31 March 2009. Accordingly, consolidated financial statements are prepared using the equity method of accounting to
consolidate the Company’s associate; Anadolu Hayat Emeklilik A.Ş.
In the 12 August 2008 dated and 2008/36 numbered “Sector Announcement Related to the Accounting of Subsidiaries, Associates
and Joint Ventures in the Stand Alone Financial Statements of Insurance, Reinsurance and Individual Pension Companies” of the
Turkish Treasury, it is stated that although insurance, reinsurance and individual pension companies are exempted from TAS 27
- Consolidated and Separate Financial Statements, subsidiaries, associates and joint-ventures could be accounted in accordance
with TAS 39 - Financial Instruments: Recognition and Measurement or at cost in accordance with the 37th paragraph of TAS
27 - Consolidated and Separate Financial Statements, Parallel to the related sector announcements mentioned above, as at the
reporting date the Company has accounted for its associate at fair value based on quoted market price.
2.3 Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components, whose
operating results are reviewed regularly by the Board of Directors (being chief operating decision maker) to make decisions
about resources allocated to each segment and assess its performance, and for which discrete financial information is available.
Since the main economic environment, where the Company operates, is Turkey, a geographical segment reporting has not been
presented. A business segment reporting of the Company is presented in Note 5 in accordance with TFRS 8- Operating Segments
standard.
2.4 Foreign currency transactions
Transactions are recorded in TL, which is the Company’s functional currency. Transactions in foreign currencies are recorded at
the rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated
at exchange rates ruling at the reporting date and foreign currency exchange differences are offset and all exchange differences
are recognized in the statement of income
Foreign currency exchange differences of unrecognized gains or losses arising from the difference between their fair value and
the discounted values calculated per effective interest rate method of foreign currency available-for-sale financial assets are
recorded in “Revaluation of financial assets” under equity and the realized gain or losses are recognized directly in the statement
of income.
2.5 Tangible assets
Tangible assets of the Company are recorded at their historical costs that have been adjusted for the effects of inflation until the
end of 31 December 2004. There have been no other inflationary adjustments for these tangible assets for the following years and
therefore they have been recorded at their costs restated for the effects of inflation until 31 December 2004. Tangible assets that
have been purchased after 1 January 2005 have been recorded at their costs after deducting any exchange rate differences and
finance expenses.
Gains/losses arising from the disposal of the tangible assets are calculated as the difference between the net carrying value and
the proceeds from the disposal of related tangible assets and reflected to the statement of income of the related period.
Maintenance and repair costs incurred in the ordinary course of the business are recorded as expense.
There are no pledges, mortgages and other encumbrances on tangible fixed assets.
There are no changes in accounting estimates that have significant effect on the current period or that are expected to have
significant effect on the following periods.
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of
tangible assets since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in
the asset.
Depreciation rates and estimated useful lives are as follows:
Tangible Assets
Buildings
Machinery and equipments
Furniture and fixtures
Vehicles
Other tangible assets (including leasehold improvements)
Leased tangible assets
Estimated Useful Lives
(years)
50
3 - 16
4 - 16
5
5 - 10
4 - 10
Depreciation
Rates (%)
2,0
6,3 - 33,3
6,3 - 25,0
20,0
10,0 - 20,0
10,0 - 25,0
2.6 Investment properties
Investment properties are held either to earn rentals and/or for capital appreciation or for both.
Investment properties are measured initially at cost including transaction costs.
Subsequent to initial recognition, the Company measured all investment properties based on the cost model in accordance with
the cost model for property and equipment (i.e. at cost less accumulated depreciation and less impairment losses if any).
Investment properties are derecognized when either they have been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or
disposal of an investment property are recognized in profit or loss in the period of retirement or disposal.
2.7 Intangible Assets
The Company’s intangible assets consist of computer software, goodwill and advances paid for tangible assets.
Intangible assets are recorded at cost in compliance with “TAS 38 - Accounting for intangible assets”. The cost of the intangible
assets purchased before 31 December 2004 are restated from the purchasing dates to 31 December 2004, the date the
hyperinflationary period is considered to be ended. The intangible assets purchased after this date are recorded at their historical
costs.
Amortization is charged on a straight-line basis over their estimated useful lives over the cost of the asset.
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net identifiable
assets of the acquired subsidiary/associate at the date of the acquisition. Goodwill on acquisitions of associates is included in
‘investments in associates’ and is tested for impairment as part of the overall balance. Separately recognized goodwill is tested
annually for impairment and carried at cost less accumulated impairment losses, Impairment losses on goodwill are not reversed.
Gain or losses on the disposal of an entity includes the carrying amount of goodwill relating to the entity disposed of.
For the purpose of impairment testing, goodwill is allocated to cash-generating units. The allocations made to those cashgenerating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arises.
The Company has acquired the health portfolio of Anadolu Hayat Emeklilik A.Ş. at 31 August 2004 with all of its rights and
liabilities. The value at acquisition of the portfolio amounting to TL 16.250.000 is capitalized as goodwill by the Company.
2.8 Financial assets
Financial assets at fair value through profit or loss are presented as financial assets held for trading in the accompanying financial
statements and trading securities and derivatives are included in this category. Financial assets at fair value through profit or
loss measured at their fair values and gain/loss arising due to changes in the fair values of related financial assets is recorded
in profit /loss. Interest income earned on trading purpose financial assets and the difference between their fair values and
acquisition costs are recorded as interest income in the statement of income. In case of disposal of such financial assets before
their maturities, the gains/losses on such disposal are recorded under trading income/losses. Accounting policies of derivatives
are detailed in note 2.10 - Derivative financial instruments.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They arise when the Company provides money, goods or services directly to a debtor with no intention of trading
the receivable. Loans and receivables those are not interest earning are measured by discounting of future cash flows less
impairment losses, and interest earning loans and receivables are measured at amortized cost less impairment losses.
Held to maturity financial assets are the financial assets with fixed maturities and fixed or pre-determined payment schedules that
the Company has the intent and ability to hold until maturity, excluding loans and receivables. Subsequent to initial recognition,
held to maturity financial assets and loans and receivables are measured at amortized cost using effective interest rate method
less impairment losses, if any. The Company has no financial assets that are not allowed to be classified as held to maturity
financial assets for two years due to the tainting rules applied for the breach of classification rules.
Available-for-sale financial assetsAvailable-for-sale financial assets are initially recorded at cost and subsequently measured at
their fair values. Unrecognized gains or losses derived from the difference between their fair value and the discounted values
calculated per effective interest rate method are recorded in “Revaluation of financial assets” under shareholders’ equity. Upon
disposal, the realized gain or losses are recognized directly in the statement of income.
The determination of fair values of financial instruments not traded in an active market is determined by using valuation
techniques. Observable market prices of the quoted financial instruments which are similar in terms of interest, maturity and
other conditions are used in determining the fair value.
The Company has accounted equity shares classified as available-for-sale according to quoted market prices or dealer
price quotations for financial instruments traded in active markets or according to cost less impairment losses for financial
instruments not traded in active markets.
Associates; shares of the associate of the Company; Anadolu Hayat Emeklilik A.Ş. are classified as available-for-sale financial assets
in the financial statements and are recorded at their fair values since those shares are traded in an active market.
A financial asset is derecognized when the control over the contractual rights that comprise that asset is lost. This occurs when
the rights are realized, expire or are surrendered.
2.9 Impairment on assets
Impairment on financial asset
Financial assets or group of financial assets are reviewed at each reporting date to determine whether there is objective evidence
of impairment. If any such indication exists, the Company estimates the amount of impairment. A financial asset is impaired
if, and only if, there is objective evidence that the expected future cash flows of financial asset or group of financial assets are
adversely affected by an event(s) (“loss event(s)”) incurred subsequent to recognition. The losses expected to incur due to future
events are not recognized even if the probability of loss is high.
Impairment on tangible and intangible assets
On each reporting date, the Company evaluates whether there is an indication of impairment of tangible and intangible assets.
If there is an objective evidence of impairment, the asset’s recoverable amount is estimated in accordance with the “TAS 36 Impairment of Assets” and if the recoverable amount is less than the carrying value of the related asset, a provision for impairment
loss is made.
2.10 Derivative financial instruments
Financial Instruments: Recognition and measurementDerivative financial instruments are subsequently remeasured at fair value
and positive fair value differences are presented either as “financial assets held for trading” and negative fair value differences
are presented as “other financial liabilities” in the accompanying financial statements. All unrealized gains and losses on these
instruments are included in the statement of income.
2.11 Offsetting of financial assets
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company
has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability
simultaneously.
Income and expenses are presented on a net basis only when permitted by the Reporting Standards, or for gains and losses
arising from a group of transactions resulting from the Company’s similar activities like trading transactions.
2.12 Cash and cash equivalents
2.13 Share capital
The shareholder having direct or indirect control over the shares of the Company is İş Bankası Group, As at 31 December 2014
and 31 December 2013, the share capital and ownership structure of the Company are as follows:
Name
Other
Paid in Capital
31 December 2014
Shareholding
Shareholding
Amount (TL)
Rate (%)
286.550.106
213.449.894
500.000.000
57,31
42,69
100,00
31 December 2013
Shareholding
Shareholding
Amount (TL)
Rate (%)
286.550.106
213.449.894
500.000.000
57,31
42,69
100,00
Sources of capital increases during the period
The company has not performed capital increase as at 31 December 2014. (31 December 2013: None).
Privileges on common shares representing share capital
As at 31 December 2014, the issued share capital of the Company is TL 500.000.000 (31 December 2013: TL 500.000.000) and
the share capital of the Company consists of 50,000,000,000 (31 December 2013: 50,000,000,000 shares) issued shares with TL
0.01 nominal value each. The share capital is represented by 150 Group A shares of TL 0,01 each.
Registered capital system in the Company
The Company has accepted the registered capital system. As of 31 December 2014, the Company’s registered capital is TL
700.000.000 (31 December 2013: TL 700.000.000).
Repurchased own shares by the Company
2.14 Insurance and investments contracts - classification
An insurance contract is a contract under which the Company accepts significant insurance risk from another party (the
policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely
affects the policyholder. Insurance risk covers all risk except for financial risks. All premiums have been received within the
coverage of insurance contracts recognized as revenue under the account caption “written premiums”.
Investment contracts are those contracts which transfer financial risk with no significant insurance risk. Financial risk is the risk
of a possible future change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index
of prices or rates, credit rating or credit index or other variable, provided, that it is not specific to a party to the contract, in the
case of a non-financial variable.
As at the reporting date, the Company does not have a contract which is classified as an investment contract.
2.15 Insurance contracts and investment contracts with discretionary participation feature
Discretionary participation feature (“DPF”) within insurance contracts and investment contracts is the right to have following
benefits in addition to the guaranteed benefits.
(i) that are likely to comprise a significant portion of the total contractual benefits;
(ii) whose amount or timing is contractually at the discretion of the Issuer; and
(iii) that are contractually based on:
(1) the performance of a specified pool of contracts or a specified type of contract;
(2) realized and/or unrealized investments returns on a specified pool of assets held by the Issuer; or
(3) the profit or loss of the Company, Fund or other entity that issues the contract.
As at the reporting date, the Company does not have any insurance or investment contracts that contain a DPF.
2.16 Investment contracts without DPF
As at the reporting date, the Company does not have any insurance contracts and investment contracts without DPF.
2.17 Liabilities
Financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another entity.
Financial liabilities of the Company are measured at their discounted values. A financial liability is derecognized when it is
extinguished.
2.18 Income taxes
Corporate tax
Statutory income is subject to corporate tax at 20%. This rate is applied to accounting income modified for certain exemptions
(like dividend income) and deductions (like investment incentives), and additions for certain non-tax deductible expenses and
allowances for tax purposes. If there is no dividend distribution planned, no further tax charges are made.
Dividends paid to the resident institutions and the institutions working through local offices or representatives are not subject
to withholding tax. The withholding tax rate on the dividend payments other than the ones paid to the non-resident institutions
generating income in Turkey through their operations or permanent representatives and the resident institutions is 15%. In
applying the withholding tax rates on dividend payments to the non-resident institutions and the individuals, the withholding tax
rates covered in the related Double Tax Treaty Agreements are taken into account. Appropriation of retained earnings to capital is
not considered as profit distribution and therefore is not subject to withholding tax.
Prepaid taxes are calculated and paid at the rates valid for the earnings of the related years. The payments can be deducted from
the annual corporate tax calculated for the whole year earnings.
In accordance with the tax legislation, tax losses can be carried forward to offset against future taxable income for up to five
years. The company has not deductible tax losses as of 31 December 2014. (31 December 2013: 3.664.725 TL).
In Turkey, there is no procedure for a final and definite agreement on tax assessments. Companies file their tax returns with their
tax offices by the end of 25th of the fourth month following the close of the accounting period to which they relate. Tax returns are
open for five years from the beginning of the year that follows the date of filing during which time the tax authorities have the
right to audit tax returns, and the related accounting records on which they are based, and may issue re-assessments based on
their findings
Deferred taxes
In accordance with TAS 12 - Income taxes, deferred tax assets and liabilities are recognized on all taxable temporary differences
arising between the carrying values of assets and liabilities in the financial statements and their corresponding balances
considered in the calculation of the tax base, except for the differences not deductible for tax purposes and initial recognition of
assets and liabilities which affect neither accounting nor taxable profit.
Deferred tax assets and liabilities are reported as net in the financial statements if, and only if, the Company has a legally
enforceable right to offset current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity.
In case where gains/losses resulting from the subsequent measurement of the assets are recognized in the statement of income,
then the related current and/or deferred tax effects are also recognized in the statement of income. On the other hand, if such
gains/losses are recognized as an item under equity, then the related current and/or deferred tax effects are also recognized
directly in the equity.
Transfer pricing
In Turkey, the transfer pricing provisions have been stated under the Article 13 of Corporate Tax Law with the heading of
“disguised profit distribution via transfer pricing”. The General Communiqué on disguised profit distribution via Transfer Pricing,
dated 18 November 2007 sets details about implementation.
If a taxpayer enters into transactions regarding sale or purchase of goods and services with related parties, where the prices are
not set in accordance with arm’s length principle, then related profits are considered to be distributed in a disguised manner
through transfer pricing. Such disguised profit distributions through transfer pricing are not accepted as tax deductible for
corporate income tax purposes.
2.19 Employee benefits
Pension and other post-retirement obligations
A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee and his/her dependants will
receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.
Employees of the Company are the members of “Anadolu Anonim Türk Sigorta Şirketi Memurları Emekli Sandığı (“Anadolu
Anonim Pension Fund”) which is established in accordance with the temporary Article 20 of the Social Security Act No: 506.
As per the temporary sub article No: 20 of the Article 73 of the Social Security Law, pension funds should be transferred to the
Social Security Institution within three years after the publication of the a aforementioned Law published in the Official Gazette
numbered 26870 and dated 8 May 2008. The related three-year transfer period has been prolonged for two years by the Cabinet
decision, which was published on the Official Gazette dated 9 April 2011. Accordingly, the three-year period expired on 8 May
2011 was extended to the 8 May 2015. The principles and applications of the transfer will be determined by the Decree of the
Council of Ministers separately.
On the other hand, the application made on 19 June 2008 by the Republican People’s Party to the Constitutional Court for the
annulment and motion for stay of some articles, including the first paragraph of the provisional article 20 of the Law, which
covers provisions on transfers, was rejected in accordance with the decision taken at the meeting of the afore-mentioned court on
30 March 2011.
The cash value of the obligations of the pension fund for each member of the fund including members left the fund as of the
transfer date will be calculated according to following assumptions:
a) Technical deficit rate of 9.8% shall be used in the actuarial calculation of the value in cash, and.
b) Gains and losses of the funds stems from benefits covered by the aforementioned Law taken into accounts to calculate present
value of the obligations.
In accordance with existing Turkish Labour Law, the Company is required to make lump-sum termination indemnities to each
employee who has completed one year of service with the Company and whose employment is terminated due to retirement
or for reasons other than resignation or misconduct. The computation of the liability is based upon the retirement pay ceiling
announced by the Government. The applicable ceiling amount as at 31 December 2014 is TL 3.438 (31 December 2013: TL 3.254).
In Accordance IAS 19 which published by Public Company Accounting Oversight Board (PCAOB) dated March 12,2013 is about
“Benefits Employee Accounting Standard” and defined by beginning from December 31,2012 net defined benefit liability of the
actuarial gains and losses arising on re-measurement should be recognized in other comprehensive income under shareholders’
equity and this effect should be applied retrospectively. The company started to account current actuarial gains and losses under
equity (other profit reserves) due to the fact that prior period actuarial gains and losses have remained below the materiality.
The Company accounted for employee severance indemnities using actuarial method in compliance with the TAS 19 - Employee
Benefits, The major actuarial assumptions used in the calculation of the total liability as at 31 December 2014 and 31 December
2013 are as follows:
Discount rate
Expected rate of salary/limit increase
Estimated employee turnover rate
31 December 2014
%4,46
%4,37
%6,29
31 December 2013
%3,61
%6,37
%7,11
Expected rate of salary/limit increase above was determined according to the government’s annual inflation forecasts.
Other benefits
The Company has provided for undiscounted short-term employee benefits earned during the period as per services rendered in
compliance with TAS 19 in the accompanying financial statements.
2.20 Provisions
A provision is made for an existing obligation resulting from past events if it is probable that the commitment will be settled
and a reliable estimate can be made of the amount of the obligation. Provisions are calculated based on the best estimates of
management on the expenses to incur as of the reporting date and, if material, such expenses are discounted to their present
values. If the amount is not reliably estimated and there is no probability of cash outflow from the Company to settle the liability,
the related liability is considered as “contingent” and disclosed in the notes to the financial statements.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are
not recognized in financial statements since this may result in the recognition of income that may never be realized. Contingent
assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has
become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognized in
the financial statements of the period in which the change occurs. If an inflow of economic benefits has become probable, the
Company discloses the contingent asset.
2.21 Revenue recognition
Written premiums and claims paid
Written premiums represent premiums on policies written during the period net of taxes, premiums of the cancelled policies
which were produced in prior periods and premium ceded to reinsurance companies,. Premiums ceded to reinsurance companies
are accounted as “written premiums, ceded” in the statement of income.
Claims are recognized as expense as they are paid. Outstanding claims provision is provided for both reported unpaid claims at
period-end and incurred but not reported claims. Reinsurer’s shares of claims paid and outstanding claims provisions are off-set
against these reserves.
Subrogation, salvage and quasi income
According to the Circular 2010/13 dated 20 September 2010; the Company may account for income accrual for subrogation
receivables without any voucher after the completion of the claim payments made to the insure. If the amount cannot be collected
from the counterparty insurance company, the Company provides provision for uncollected amounts due for six months. If the
counter party is not an insurance Company, the provision is provided after four months. As at the reporting date, in accordance
with the related circular the Company provided TL 26.118.178 (31 December 2013: TL 25.286.057) subrogation receivables
and recorded TL 30.648.790 (31 December 2013: TL 29.179.630) (Note 12) net subrogation and salvage receivables under
receivables from main operations. The Company provided allowance for uncollected subrogation receivables amounting to TL
7.677.067 (31 December 2013: TL 9.475.078) (Note 12) in accordance with circular.
For the years ended 31 December 2013 and 2012, salvage and subrogation collected are as follows:
Motor Vehicles
Third Party liability for motor vehicles (MTPL)
Transportation
Fire and natural disaster
Water Vehicles
Accident
General Losses
General Responsibility
Air Craft
Credit
Legal Protection
Health
Total
31 December 2014
255.938.892
4.894.794
2.556.620
1.951.328
1.087.073
452.519
248.943
129.658
16.861
2.410
(22.011)
-267.257.087
31 December 2013
198.341.171
5.275.881
2.002.200
1.647.652
751.675
548.899
85.598
22.584
-355.772
22.461
21.104
209.074.997
As at 31 December 2014 and 31 December 2013, accrued subrogation and salvage income per branches is as follows:
Motor Vehicles
Water Vehicles
Transportation
General Losses
Accident
Total
31 December 2014
29.805.959
213.733
34.052
397.028
181.347
16.671
-30.648.790
31 December 2013
27.506.620
1.450.379
-146.400
64.907
10.291
1.033
29.179.630
Commission income and expense
As further disclosed in Note 2.24 - Reserve for unearned premiums, commissions paid to the agencies related to the production
of the insurance policies and the commissions received from the reinsurance firms related to the premiums ceded are
recognized over the life of the contract by deferring commission income and expenses within the calculation of reserve for
unearned premiums for the policies produced before 1 January 2008 and recognizing deferred commission income and deferred
commission expense in the financial statements for the policies produced after 1 January 2008.
Interest income and expense
Interest income and expense are recognized using the effective interest method. The effective interest rate is the rate that exactly
discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where
appropriate, a shorter period) to the carrying amount of the financial asset or liability. The effective interest rate is established on
initial recognition of the financial asset and liability and is not revised subsequently.
Trading income/expense
Trading income/expense includes gains and losses arising from disposals of financial assets held for trading purpose and
available-for-sale financial assets. Trading income and trading expenses are recognized as “Income from disposal of financial
assets” and “Loss from disposal of financial assets” in the accompanying unconsolidated financial statements.
Dividends
Dividend income is recognized when the Company’s right to receive payment is ascertained.
2.22 Leasing transactions
The maximum period of the lease contracts is 10 years. Tangible assets acquired by way of finance leases are recorded in tangible
assets and the obligations under finance leases arising from the lease contracts are presented under “Finance Lease Payables”
account in the financial statements. In the determination of the related asset and liability amounts, the lower of the fair value of
the leased asset and the present value of leasing payments is considered. Financial costs on leasing agreements are expanded in
lease periods at a fixed interest rate.
If there is impairment in the value of the assets obtained through finance lease and in the expected future benefits, the leased
assets are measured at net realizable value. Depreciation for assets obtained through financial lease is calculated in the same
manner as tangible assets.
Payments made under operating leases are recognized in the statement of income on a straight-line basis over the term of the
lease.
2.23 Dividend distribution
Based on the guidelines and principals issued by the CMB dated 27 January 2010 for the distribution of dividends from the profit
generated from operating activities in 2009, concerning public entities, the shares of which are quoted in public equity markets,
it has been agreed upon not to set a mandatory minimum dividend payment quota. Furthermore, it has been agreed upon to let
public entities perform dividend distributions.
Additionally, as stated within the aforementioned decision of CMB, for entities required to prepare consolidated financial
statements, it has been agreed upon to require the net distributed profit calculations to be performed on the net profit for the
period as stated on the consolidated financial statements, so long that the distribution can be funded through statutory resources.
The company did not perform dividend distribution in 2013 and 2014.
2.24 Reserve for unearned premiums
In accordance with the “Communiqué on Technical Reserves for Insurance, Reinsurance and Pension Companies and the Related
Assets That Should Be Invested Against Those Technical Reserves” (“Communiqué on Technical Reserves”) which was issued
in 26606 numbered and 7 August 2007 dated Official Gazette and put into effect starting from 1 January 2008, the reserve for
unearned premiums represents the proportions of the gross premiums written without deductions of commission or any other
allowance, in a period that relate to the period of risk subsequent to the reporting date for all short-term insurance policies. For
commodity transportation policies with indefinite expiration dates, 50% of the remaining portion of the premiums accrued in the
last three months, less any commissions is also provided as unearned premium reserves.
Reserve for unearned premiums is calculated for all insurance contracts except for the contracts for which the mathematical
reserve is provided. Reserve for unearned premiums is also calculated for the annual premiums of the annually renewed long
term insurance contracts.
Since the Communiqué on Technical Reserves was effective from 1 January 2008, the Turkish Treasury issued 4 July 2007
dated and 2007/3 numbered “Circular to Assure the Compliance of the Technical Reserves of Insurance, Reinsurance and
Pension Companies With the Insurance Law No,5684” (“Compliance Circular”) to regulate the technical provisions between the
issuance date and enactment date of the Communiqué on Technical Reserves. In accordance with the Compliance Circular, it is
stated that companies should consider earthquake premiums written after 14 June 2007 in the calculation of the reserve for
unearned premiums while earthquake premiums were deducted in the calculation of the reserve for unearned premiums before.
Accordingly, the Company has started to calculate reserve for unearned premiums for the earthquake premiums written after 14
June 2007, while the Company had not calculated reserve for unearned premiums for the earthquake premiums written before
14 June 2007.
According to the 2009/9 Numbered Circular Related to Application of Technical Reserves issued on 27 March 2009 reserve for
unearned premiums is calculated by taking into account that all polices become active at 12:00 at noon and end at 12:00 at noon.
According to the Communiqué on Technical Reserves, for the calculation of unearned premium reserves of foreign currency
indexed insurance agreements, foreign currency selling exchange rates announced by Turkish Central Bank will be considered,
unless there is a specified exchange rate in the agreement.
As at the reporting date, the Company has provided reserve for unearned premiums amounting to TL 1.491.252.563
(31 December 2013: TL 1.422.324.312) and reinsurer share in reserve for unearned premiums amounting TL 294.929.264
(31 December 2013: TL 290.028.419). Furthermore, reserve for unearned premiums includes Social Security Institution (“SSI”)
share amounting to TL 36.692.792 (31 December 2013: TL 34.755.134) as at 31 December 2014.
2.25 Provision for outstanding claims
Claims are recorded in the year in which they occur, based on reported claims or on the basis of estimates when not reported.
Provision for outstanding claims represents the estimate of the total reported costs of notified claims on an individual case basis
at the reporting date as well as the corresponding handling costs. Incurred but not reported claims (“IBNR”) are also provided.
Claims incurred before the accounting periods but reported subsequent to those dates are considered as incurred but not
reported (“IBNR”) claims.
According to the “Communiqué on Amendments to Communiqué on Technical Reserves for Insurance, Reinsurance and Pension
Companies and the Related Assets That Should Be Invested Against Those Technical Reserves” published in Official Gazette no
27655 dated 28 July 2010 and “Communiqué on Technical Reserves and Circular on Actuarial Chain Ladder Method” dated 20
September 2010 and numbered 2010/12, it is stated that the difference between the result of the actuarial chain ladder method
and reported but not settled (IBNR calculation by ACLM method) is compared to test IBNR claims and greater amount is recorded
to financial statements are accepted as IBNR claims. Requirement on test IBNR calculation is removed per Communiqué on
Amendments to Aforementioned Communiqué is published in Official Gazette no 28356 17 July 2013 dated. It is stated that
amount, content and implementation principals of incurred but not reported claims should be determined according to IBNR
calculation by ACLM method specified by Turkish Treasury or other methods determined by Turkish Treasury.
As at 1 January 2012, 100% of the calculated negative IBNR balances per each insurance branch are taken into calculation in
accordance with the Circular issued by the Turkish Treasury dated 26 December 2011 and numbered 2011/23. Accrued salvage,
subrogation and similar income is taken into calculation with collections in ACLM method.
The Company recorded 100% of the IBNR calculated by ACLM method with additional provision explained below amounting to
TL 327.611.024 (31 December 2013: TL 193.676.094) to the unconsolidated financial statements as IBNR and TL 17.969.121
(31 December 2013: TL 7.596.560) as reinsurer’s share of IBNR.
In Accordance with the Circular issued by the Turkish Treasury dated 2010/12 and 2010/16, the Company
eliminated severe damages by using Box-Plot method to make more homogeneous calculation in ACML.
Also, according to Circular Article 7 issued in 2010/12, total number of files contained in the main branch,
excluding the health branch of the total number of files no more than one thousand of damage or major damage under 300
remaining branches can be done by actuary.
According to Treasury Circular 2010/16, the amounts with ACML determined the minimum amount of provision. If Amounts
which are determined the company’s other tools or actuarial studies shows the company’s statu better than methods
recommended by the Treasury, the company reflect amount of provision which provided higher than Treasury to financial
statements. In accordance with these judgments, as a result of actuarial studies, the Company made IBNR provision amounts
to total TL 11.069.337 (31 December 2013: TL 4.831.998) which are TL 858.216 in branch of Health, TL 6.190.791 in branch of
Water Vehicles, TL 2.859.830 in branch of Air Craft Responsibility and TL 1.160.500 in branch of Credit.
In accordance with the “Sector Announcement Related to Updating Past Outstanding Claim Amounts for IBNR Calculation” dated
17 June 2013 and numbered 2013/13 and the Company’s actuary decision starting from 30 June 2014, the Company updated
provision for outstanding claims for general liability branch.
IBNR amounts which obtained results of updates provision for outstanding claims and uncorrected version in the ACLM
triangular series are TL 417.681.075. In accordance with Circular no. 2011/1, the Company corrected updated provision for
outstanding claims backwards to avoid deterioration of the data series in the history of the triangle ACLM. As 31 December 2014,
IBNR figures obtained for this correction is TL 114.990.730. This amount is accounted in the Company’s financials.
ACLM to be used is announced with “Communiqué on Technical Reserves” which is issued by the Turkish Treasury on 20
September 2010, Insurance and reinsurance companies are allowed to use five different methods which are “Standard Chain,
Claim/Premium, Cape Code, Frequency/Volume and Munich Chain Ladder” to make ACLM calculations. The Company’s method
selections for each branch are presented below.
In accordance with the Circular of the Turkish Treasury No: 2013/8 dated 5 April 2013 “Circular on Actuarial Chain Ladder
Method”, according to the Circular numbered 2010/12, the ACLM calculation methods start to be changed at the end of 2013
that can be started as of first quarter of 2013 if minimal fluctuation between the periods is wanted. Accordingly, in Discretionary
Fiscal Responsibility branch, for the purpose of additional IBNR need to be aimed to determine actuarial forecast works by the
Company actuary for compatible with the branch’s ACML calculation method has been changed as of 30 September 2013 and
“Munich Chain” method was disused to “Standard Chain” method was started to carry out. As 30 September 2014, for the Motor
Vehicles and General Losses branches, the Company started to use ‘Standard’ instead of Münich Chain’.
Based on each branch, calculation amount of Net IBNR; reinsurance agreements’ effect in force was to be reflected based on
actual reinsurance rate.
Motor vehicles
Water vehicles
Third party liability for motor vehicles (MTPL)
Third party liability
Third party liability for air vehicles
Fire and natural disasters
Air crafts
Accident
General losses
Financial losses
Health
Transportation
Credit
Legal protection
General liability
31 December 2014
Standard Chain Ladder
Cape Code
Munich Chain Ladder
Cape Code
31 December 2013
Munich Chain
Munich Chain
Munich Chain
Munich Chain
Munich Chain
In accordance with “Circular Related to Information on Calculation of Incurred But Not Reported Claims Reserve” numbered
2011/23 and dated 26 November 2011, companies may decrease their outstanding claims reserve balances based on the winning
ratio of the sub-branches calculated from the last five years claims. Winning ratio used for decrease in provision for outstanding
claims could not exceed 25% (15% for the new sub-branches which do not have five year data). Based on the aforementioned
regulation, the Company calculated winning ratio from the last five year data set and TL 75.260.122 (31 December 2013:
TL 53.749.627) as IBNR and 9.912.780 TL (31 December 2013: TL 6.764.302) as reinsurer’s share of IBNR is excluded from
outstanding claims reserve balance
The calculated winning ratio of the Company as at 31 December 2014 is within 0% - 100% range (31 December 2013:%0-%35),
Winning ratios used in and amounts decreased from provision for outstanding claims are as follows:
31 December 2014
Branch
General responsibility
Motor vehicles
General losses
Water vehicles
Transportation
Accident
Credit
Legal protection
Total
31 December 2013
Branch
Motor vehicles
Transportation
General losses
Motor vehicles
Accident
Legal protection
Total
Winning Ratios Used
%13
%25
%23
%21
%19
%25
%25
%14
%25
%25
Winning Ratios Used
%17
%25
%17
%18
%11
%17
%25
%18
%16
Gross Amount
Decreased
Net Amount
Decreased
27.061.833
31.775.165
10.183.292
2.623.152
2.057.461
791.187
431.542
304.698
25.000
6.792
75.260.122
26.173.740
30.362.994
4.417.948
2.533.992
686.961
493.422
362.137
284.356
25.000
6.792
65.347.342
Gross Amount
Decreased
Net Amount
Decreased
27.348.214
15.096.889
6.386.641
2.065.493
361.329
1.153.064
973.319
357.604
7.074
53.749.627
26.167.440
14.288.654
2.789.609
1.977.160
333.118
515.357
569.692
337.221
7.074
46.985.325
New Regulations on Treatment Costs Resulted from Traffic Accidents in Accordance with the Circular Numbered
2011/18 “Circular Related to the Accounting of Payments Related to Payment of Treatment Costs Resulted from Traffic
Accidents and New Accounts in the Insurance Chart of Accounts”
According to the Article 59 of the aforementioned law, starting from 25 February 2011, premiums written under compulsory
motor third party liability insurance contracts providing health assurance will be transferred to SSI by the rate up to 15%
which will be later defined by Turkish Treasury. By this premium transfer, all liabilities related to body injuries resulted from
traffic accidents will be compensated by SSI. According to the Provisional Article 1 and Article 59 of the Law, up to 20% of
the transferred premium amount defined by the Turkish Treasury will also be transferred to SSI and treatment costs resulted
from traffic accidents occurred before 25 February 2011 will also be compensated by SSI. As part of the aforementioned law,
“Communiqué on Payment of Treatment Costs Resulted from Traffic Accidents” which was issued in Official Gazette numbered
28038 and dated 27 August 2011 has become effective. On 17 October 2011, the Turkish Treasury issued circular numbered
2011/18 “Circular Related to the Accounting of Payments Related to Payment of Treatment Costs Resulted from Traffic Accidents
and New Accounts in the Insurance Chart of Accounts”. In accordance with the related circular, the Company eliminated
outstanding claims reserve amounting to TL 2.279.273 related to treatment costs occurred before issuance of the aforementioned
law, with “Paid Claims” account. The same amount is recorded as “Payable to SSI” under “Other Payables” in the accompanying
financial statements.
2.26 Reserve for unexpired risks
In accordance with the Communiqué on Technical Reserves, while providing reserve for unearned premiums, in each accounting
period, the companies should perform adequacy test covering the preceding 12 months due to the probability that future claims
and compensations of the outstanding policies may be in excess of the reserve for unearned premiums already provided. In
performing this test, it is required to multiply the reserve for unearned premiums, net with the expected claim/premium ratio.
Expected claim/premium ratio is calculated by dividing incurred losses (provision for outstanding claims, net at the end of the
period + claims paid, net - provision for outstanding claims, net at the beginning of the period) to earned premiums (written
premiums, net + reserve for unearned premiums, net at the beginning of the period - reserve for unearned premiums, net at
the end of the period). In the calculation of earned premiums; deferred commission expenses paid to the agencies and deferred
commission income received from the reinsurance firms which were netted off from reserve for unearned premiums both at the
beginning of the period and at the end of the period are not taken into consideration.
In accordance with Treasury circular numbered 2012/15, unexpired risk reserve started to be calculated over main branches as
of December 31, 2012. The test is performed on branch basis and in case where the expected claim/premium ratio is higher than
95%, reserve calculated by multiplying the exceeding portion of the expected claim/premium ratio with the reserve for unearned
premiums of that specific branch is added to the reserves of that branch. Accordingly, as at the reporting date, the Company has
provided net reserve for unexpired risk amounting to TL 52.687.216 (31 December 2013: TL 22.489.032) and unexpired risk
amounting of reassurance to TL 12.307.870 (31 December 2013: TL 9.370.659) in the accompanying unconsolidated financial
statements.
As at 31 December 2014, reserve for unexpired risks at the beginning of the period is revised according to calculation method
used in the current period in order to determine consistent claims /premium ratio.
According to the Circular numbered 2011/18, the Company excluded both the premiums transferred to SSI and claims related to
treatment costs from calculation of reserve for unexpired risks in motor third party liability, compulsory transportation financial
liability and compulsory personal accident for bus transportation branches.
2.27 Equalization provision
In accordance with the Communiqué on Technical Reserves put into effect starting from 1 January 2008, the companies should
provide equalization provision in credit insurance and earthquake branches to equalize the fluctuations in future possible claims
and for catastrophic risks. Equalization provision, started to be provided in 2008, is calculated as 12% of net premiums written
in credit insurance and earthquake branches. In the calculation of net premiums, fees paid for un-proportional reinsurance
agreements are considered as premiums ceded to the reinsurance firms. The companies should provide equalization provision
up to reaching 150% of the highest premium amount written in a year within the last five years. In case where claims incurred,
the amounts below exemption limits as stated in the contracts and the share of the reinsurance firms cannot be deducted from
equalization provisions. Claims payments are deducted from first year’s equalization provisions by first in first out method.
Equalization provisions are presented under “other technical reserves” in the accompanying financial statements. As at the
reporting date, the Company provided equalization provision amounting to TL 60.549.876 in the accompanying unconsolidated
financial statements (31 December 2013: TL 44.579.840)
Net losses (after reinsurance) resulted from earthquake occurred in Van amounting to TL 7,101,831 (31 December 2013: TL
7.101.831) are decreased from prior periods’ equalization provision .
2.28 Related parties
Parties are considered related to the Company if;
(a) directly, or indirectly through one or more intermediaries, the party:
• controls, is controlled by, or is under common control with the Company (this includes parent, subsidiaries and fellow subsidiaries);
• has an interest in the Company that gives it significant influence over the Company; or
• has joint control over the Company;
(b) the party is an associate of the Company;
(c) the party is a joint venture in which the Company is a venturer;
(d) the party is member of the key management personnel of the Company and its parent;
(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled or significantly influenced by, or for which significant voting power in such entity
resides with directly or indirectly, any individual referred to in (d) or
(g) the party is a post-employment benefit plan for the benefit of employees of the Company, or of any entity that is a related
party of the Company.
A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a
price is charged.
A number of transactions are entered into with related parties in the normal course of business.
2.29 Earnings per share
Earnings per share are determined by dividing the net income by the weighted average number of shares outstanding during the
year attributable to the shareholders of the Company. In Turkey, companies can increase their share capital by making a pro-rata
distribution of shares (“Bonus Shares”) to existing shareholders from retained earnings. For the purpose of earnings per share
computations, such bonus shares issued are regarded as issued shares.
Post-balance sheet events that provide additional information about the Company’s position at the reporting dates (adjusting
events) are reflected in the financial statements. Post-balance sheet events that are not adjusting events are disclosed in the notes
when material.
2.31 New standards and interpretations not yet adopted
There are a number of new standards, updates related to the existing standards and interpretations which are not adopted in the
preparation of the accompanying financial statements and have not yet entered into force for the accounting period 31 December
2014. TFRS 9 - Financial instruments, is published by International Accounting Standards Board in November 2009 as a part
of a wider project that aims to bring new regulations to replace TAS 39 - Financial Instruments: Recognition and Measurement
published by the Turkish Accounting Standards Board on Official Gazette dated 27 April 2010 and numbered 27564.
Developing a new standard for the financial reporting of financial assets that is principle-based and less complex is aimed by
this project. The objective of TFRS 9, being the first phase of the project, is to establish principles for the financial reporting of
financial assets that will present relevant and useful information to users of financial statements for their assessment of amounts,
timing and uncertainty of the entity’s future cash flows. With TFRS 9 an entity shall classify financial assets as subsequently
measured at either amortized cost or fair value on the basis of both the entity’s business model for managing the financial assets
and the contractual cash flow characteristic of the financial assets. The guidance in TAS 39 on impairment of financial assets and
hedge accounting continues to apply.
An entity shall apply TFRS 9 for annually years beginning on or after 1 January 2018. An earlier application is permitted. If an
entity adopts this TFRS in its financial statements for a period beginning before 1 January 2012, then prior periods are not
needed to be restated.
3 Critical accounting estimates and judgments in applying accounting policies
The notes given in this section are provided to addition/supplement the commentary on the management of insurance risk note
4.1 - Management of insurance risk and note 4.2 - Financial risk management.
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas at estimation uncertainty and critical judgment in applying accounting policies
that have the most significant effect on the amount recognized in the financial statements are described in the following notes:
Note 4.1 - Management of insurance risk
Note 4.2 - Financial risk management
Note 10 - Reinsurance assets/liabilities
Note 11 - Financial assets
Note 12 - Loans and receivables
Note 17 - Insurance liabilities and reinsurance assets
Note 17 - Deferred acquisition costs
Note 19 - Trade and other payables, deferred income
Note 21 - Deferred income taxes
Note 23 - Provisions for other liabilities and charges
4 Management of insurance and financial risk
4.1 Management of insurance risk
Insurance risk is defined as coverage for exposures that exhibit a possibility of financial loss due to applying inappropriate
and insufficient insurance techniques. Main reasons of insurance risk exposure result from the risk selection and inaccurate
calculation of insurance coverage, policy terms and fee or inaccurate calculation of coverage portion kept within the company and
coverage portion transfers to policyholders and transfer conditions.
Objective of managing risks arising from insurance contracts and policies used to minimize such risks
Potential risks that may be exposed in transactions are managed based on the requirements set out in the Company’s “Risk
Management Policies” issued by the approval of the Board of Directors. The main objective of risk management policies is to
determine the risk measurement, assessment, and control procedures and maintain consistency between the Company’s asset
quality and limitations allowed by the insurance standards together with the Company’s risk tolerance of the accepted risk level
assumed in return for a specific consideration. In this respect, instruments that are related to risk transfer, such as; insurance risk
selection, risk quality follow-up by providing accurate and complete information, effective monitoring of level of claims by using
risk portfolio claim frequency, treaties, facultative reinsurance contracts and coinsurance agreements, and risk management
instruments, such as; risk limitations, are used in achieving the related objective.
Risk tolerance is determined by the Company’s Board of Directors by considering the Company’s long-term strategies, equity
resources, potential returns and economical expectations, and it is presented by risk limitations. Authorization limitations during
policy issuing include authorizations for risk acceptances granted based on geographical regions in relation to unacceptable
special risks or pre-approved acceptable special risks, insurance coverage to agencies, district offices, technical offices, assistant
general managers and top management in the policy issuance period and authorizations for claim payment granted to district
offices, claim management administration, automobile claims administration and Claim Committee established by the managing
director and assistant managing director in the claim payment period.
Whatsoever, risk acceptance is based on technical income expectations under the precautionary principle. In determining
insurance coverage, policy terms and fee, these expectations are based accordingly
It is essential that all the authorized personnel in charge of executing policy issuance transactions, which is the initial phase of
insurance process, should ensure to gather or provide all the accurate and complete information to issue policies in order to
obtain evidence on the acceptable risks that the Company can tolerate from the related insurance transactions. On the other hand,
decision to be made on risk acceptance will be possible by transferring the coverage to the reinsurers and/or coinsurers and
considering the terms of the insurance policy.
In order to avoid destructive losses over company’s financial structure, company transfers the exceeding portion of risks assumed
over the Company’s risk tolerance and equity resources through treaties, facultative reinsurance contracts and coinsurance
agreements to reinsurance and coinsurance companies. Insurance coverage and policy terms of reinsurance are determined by
assessing the nature of each insurance branch.
Sensitivity to insurance risk
Insurance risks do not generally have significant unrecoverable losses in the course of ordinary transactions, except for risks
associated with earthquake and other catastrophic risks. Therefore, there is a high sensitivity to earthquake and catastrophic
risks.
The case of potential claims’ arising from earthquake and other catastrophic risks exceeding the maximum limit of the excess of
loss agreements, such risks are treated as the primary insurance risks and are managed based on the precautionary principle.
Maximum limit of excess of loss agreements is determined based on the worst case scenario on the possibility of an earthquake
that Istanbul might be exposed to in terms of its severity and any potential losses incurred in accordance with the generally
accepted international earthquake models. The total amount of protection for catastrophic risks of the company is identified
taking into the compensation amount for an earthquake will occur in a 1000 years.
Insurance risk concentration
The Company’s gross and net insurance risk concentrations (after reinsurance) in terms of insurance branches are summarized
as below:
Total claims liability (*)
31 December 2014
Motor vehicles liability (MTPL)
General liability
General losses
Motor vehicles
Water vehicles
Transportation
Air crafts
Financial losses
Accident
Air crafts liability
Health
Credit
Legal protection
Total
Gross total claims Reinsurance share of
liability total claims liability
536.683.814
(16.321.658)
302.883.129
(35.816.816)
126.898.890
(67.749.236)
68.615.172
(41.639.167)
83.781.790
1.274.635
35.733.940
(18.673.835)
19.805.194
(13.706.887)
28.943.534
(20.172.876)
17.017.918
(15.402.033)
15.096.696
(1.291.762)
4.955.110
(59.627)
1.936.936
(53.446)
759.191
(186.986)
876.450
31
1.243.987.764
(229.799.663)
Net total
claims liability
520.362.156
267.066.313
59.149.654
26.976.005
85.056.425
17.060.105
6.098.307
8.770.658
1.615.885
13.804.934
4.895.483
1.883.490
572.205
876.481
1.014.188.101
31 December 2013
General liability
Motor vehicles
General losses
Air crafts
Water vehicles
Transportation
Accident
Financial losses
Health
Credit
Legal protection
Total
392.957.242
(15.116.022)
145.694.331
(14.833.210)
75.030.329
(31.394.357)
57.404.411
1.789.780
55.319.765
(33.483.122)
24.940.859
(15.814.715)
22.199.757
(8.976.371)
22.053.555
(11.185.251)
16.393.181
(430.548)
7.323.143
(5.559.770)
1.482.083
(312.944)
1.352.782
(18.250)
1.228.470
34.052
448.905
(56.773)
823.828.813
(135.357.501)
Net total
claims liability
377.841.220
130.861.121
43.635.972
59.194.191
21.836.643
9.126.144
13.223.386
10.868.304
15.962.633
1.763.373
1.169.139
1.334.532
1.262.522
392.132
688.471.312
Total claims liability includes outstanding claims reserve (excluding contingent amounts deducted from claims reserve determined by winning probability) and
incurred but not reported claims.
(*)
Gross and net insurance risk concentrations of the insurance contracts (after reinsurance) based on geographical regions are
summarized as below:
31 December 2014
Turkey
Europe
America
Asia
Total
31 December 2013
Marmara Region
Middle Anatolian Region
Aegean Region
Mediterranean Region
South East Anatolian Region
Black Sea Region
East Anatolian Region
Marmara Region
945.064.232
1.905.186
156.303
224.723
947.350.444
Net total
claims liability
(221.076.633)
(566.539)
(95.322)
(4.829)
(221.743.323)
723.987.599
1.338.647
60.981
219.894
725.607.121
Net total
claims liability
522.387.693
137.929.862
73.890.193
68.908.939
43.207.867
34.487.066
64.252.612
945.064.232
(121.442.279)
(43.864.250)
(11.987.253)
(10.656.183)
(7.764.575)
(2.878.530)
(22.483.563)
(221.076.633)
400.945.414
94.065.612
61.902.940
58.252.756
35.443.292
31.608.536
41.769.049
723.987.599
Net total
claims liability
(*)
Total claims liability includes estimated compensation amounts for realized claims. Gross incurred but not reported claims amounting to TL 327.611.024 additional
provision for outstanding claims per adequacy test amounting to TL 44.286.418 outstanding claims of treaty activities which could not be distributed to geographical
regions and the contingent amounts deducted from claims reserve amounting to TL (75.260.122) are excluded from the table
31 December 2013
Turkey
Europe
Asia
Africa
Total
Total claims liability
31 December 2013
Marmara Region
Aegean Region
Black Sea Region
Total
645.190.292
1.969.039
293.765
190.977
647.644.073
(134.181.200)
(264.418)
(11.963)
(67.662)
(134.525.243)
511.009.092
1.704.621
281.802
123.315
513.118.830
Net total
claims liability
326.101.895
80.036.803
58.923.420
55.160.378
47.737.283
45.936.845
31.293.668
645.190.292
(84.537.280)
(7.988.570)
(5.953.188)
(6.895.999)
(17.149.331)
(8.833.747)
(2.823.085)
(134.181.200)
241.564.615
72.048.233
52.970.232
48.264.379
30.587.952
37.103.098
28.470.583
511.009.092
regions and the contingent amounts deducted from claims reserve amounting to TL (53.749.627) are excluded from the table.
(*)
Given insurance collateral amounts in respect to branches
Health
Accident
General liability
General losses
Motor vehicles
Transportation
Water vehicles
Air crafts
Legal protection
Total
31 December 2014
31 December 2013
4.283.371.745.693
263.459.916.521
254.952.055.702
35.427.794.810
41.614.148.232
63.746.730.255
40.753.693.279
46.432.952.597
17.529.066.354
1.651.393.745
38.500
5.048.939.535.688
4.511.111.250.942
195.943.025.085
221.876.822.746
33.131.190.355
41.043.206.431
49.463.100.289
31.063.663.602
21.981.060.492
14.968.174.500
979.655.702
-5.121.561.150.144
4.2 Management of financial risk
Introduction and overview
This note presents information about the Company’s exposure to each of the below risks, the Company’s objectives, policies
and processes for measuring and managing risk, and the Company’s management of capital. The Company has exposure to the
following risks from its use of financial instruments:
• credit risk
• liquidity risk
• market risk
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management
framework. Duties and responsibilities of the Risk Management and Internal Control Department include design and
implementation of risk management system and identification and implementation of risk management policies. It is also
responsible for ensuring that the Company implements all necessary risk management techniques. Activities of the Risk
Management and Internal Control Department are managed directly by General Manager. The Board of Directors monitors the
effectiveness of the risk management system through the internal audit department.
Risk management policies and guidelines are set by the Board of Directors and applied by the top management. These policies
include organisation and scope of the risk management function, risk measurement and assessment methods, duties and
responsibilities of the Board of Directors, top management and all of the employees, procedures followed in the case of limit
extension and compulsory approval and confirmation processes for certain situations.
Credit Risk
Credit risk is most simply defined as the potential that a bank borrower or counterparty will fail to meet its obligations in
accordance with agreed terms. The balance sheet items that the Company is exposed to credit risks are as follows:
• Cash at banks
• Other cash and cash equivalents
• Available for sale financial assets (except equity-shares)
• Financial assets held for trading (except equity-shares)
• Held to maturity financial asset
• Premium receivables from policyholders
• Receivables from intermediaries (agencies)
• Receivables from reinsurance companies related to commissions and claims paid
• Reinsurance shares of insurance liability
• Receivables from related parties
• Other receivables
Reinsurance contracts are the most common method to manage insurance risk. This does not, however, discharge the Company’s
liability as the primary insurer. If a reinsurer fails to pay a claim for any reason, the Company remains liable for the payment to
the policyholder. The creditworthiness of reinsurers is considered on an annual basis by reviewing their financial strength prior
to finalization of the reinsurance contract.
Net carrying value of the assets that is exposed to credit risk is shown in the table below.
Cash and cash equivalents (Note 14)
Receivables from main operations (Note 12)
Financial assets (Note 11) (*)
Reinsurer share in provision for outstanding claims (Note 10), (Note 17)
Prepaid taxes and funds (Note 19)
Other receivables (Note 12)
Other prepaid expenses (Note 10)
Other miscellaneous current assets (Not 12)
Due from related parties (Note 12)
Total
(*)
Equity shares amounting to TL 104.126.890 are not included (31 December 2013: TL 88.786.648).
31 December 2014
31 December 2013
1.606.182.886
797.454.113
539.941.067
229.799.663
1.848.492
3.595.183
2.733.430
1.895.592
-3.183.450.426
1.154.688.944
773.925.226
542.222.098
135.357.501
9.659.923
2.968.734
1.086.704
735.558
72.324
2.620.717.012
As at 31 December 2014 and 31 December 2013, the aging of the receivables from main operations is as follows:
31 December 2014
Gross Amount
Provision
Not past due
Past due 0-30 days
Past due 31-60 days
Past due 61-90 days
More than 90 days (*)
Total (**)
583.917.123
89.759.753
13.190.866
3.147.750
116.737.854
806.753.346
----(113.380.507)
(113.380.507)
31 December 2013
Gross Amount
Provision
565.073.223
77.880.279
12.545.113
4.096.093
116.140.120
775.734.828
----(102.829.158)
(102.829.158)
As per the 3 February 2005 dated and B.02.1.HM.O.SGM.0.3.1/01/05 numbered Circular issued by the Turkish Treasury, in case where subrogation is subject to
claim/legal action, related subrogation amount is recognized as doubtful receivables and allowance for doubtful receivables is provided by the same amount in the
financial statements. Related amounts are presented in “More than 90 days” line in the above table.
(*)
Except for TL 806.753.346 (31 December 2013: TL 775.734.828) presented under receivables from insurance operations in the financial statements, this amount
also includes TL 81.109.551 (31 December 2013: TL 81.315.004) of untransferred amount collected by intermediaries and TL 30.648.790 (31 December 2013:
TL 29.179.630) of subrogation and salvage receivables. Subrogation receivables having past over 4 months for individuals and 6 months for legal entities but not
transferred to legal follow-up amounting to TL 7.677.067 (31 December 2013: TL 9.475.078) are excluded from the table.
(**)
The movements of the allowances for impairment losses for receivables from main operations during the period are as follows:
Provision for receivables from insurance operations at the beginning of
the period
Collections during the period (Note 47)
Impairment losses provided during the period (Note 47)
Impairment losses provided for subrogation - salvage receivables during
the period (Note 47)
Provision for receivables from insurance operations at the end of
the period
31 December 2014
31 December 2013
102.829.158
(1.071.425)
2.518.673
87.996.612
(908.822)
1.503.704
9.104.101
113.380.507
14.237.664
102.829.158
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet cash commitments associated with
financial instruments.
Management of the liquidity risk
The Company considers the maturity match between asset and liabilities for the purpose of avoiding liquidity risk and ensure
that it will always have sufficient liquidity to meet its liabilities when due.
Maturity distribution of monetary assets and liabilities:
31 December 2014
Financial assets
Receivables from main operations
Other receivables and current assets
Other prepaid expenses
Total monetary assets
Insurance technical provisions (*)
Payables arising from main operations
Other liabilities
Provisions for taxes and other similar
obligations
Provisions for other risks and expense
accruals
Total monetary liabilities
Carrying
amount
Up to 1 month
1 to 3 months
1.606.048.714
563.509.281
960.079.777
4.962.323
2.949.214
644.067.957
797.454.113
2.733.430
3.055.266.537
16.290.316
77.086.258
29.820.736
3 to 6 months
82.459.656
33.595.436
6 to 12
months
--
Over 1 year
--
248.492.451
272.013.141
--
272.013.141
1.250.015
319.130.980
83.346.625
659.835.069 1.301.584.951
437.100.952
128.065.431
--
256.666.993
--
431.465
1.483.415
862.929
8.174.542
--
1.014.188.101
152.781.804
305.563.607
116.206.094
83.703.672
95.606.941
99.256.001
340.380.595
27.386.135
27.386.135
--
--
--
--
1.438.414.865
274.525.222
302.045.983
47.561.333
47.233.313
76.105.908
18.251.375
--
46.629.462
26.393.381
3.356.650
381.943.100
--
15.759.247
215.669.013
--
43.855.877
309.715.708
718.715
Unallocated
--
--
194.862.942
--
--
--
--
--
--
2.916.577
--
--
28.117.416
--
371.414.588
--
Provision for outstanding claims is presented as short term liabilities in the accompanying unconsolidated financial statements whereas maturity distribution is
presented according to projected payment dated in the above table.
(*)
31 December 2013
Financial assets
Due from related parties
Other liabilities
obligations
Provisions for other risks and expense
accruals
Carrying
amount
Up to 1 month
1 to 3 months
1.153.712.216
552.341.090
585.163.978
72.324
12.054
631.008.746
773.925.226
3.234.708
26.458.758
13.800.085
3 to 6 months
16.207.148
28.181.861
6 to 12
months
--
70.723.063
Over 1 year
--
308.660.105
--
183.184.874
80.117.472
288.235.185
315.443.908
78.142.696
--
1.086.704
361.879.993
--
149.208.056
--
320.646.070
183.184.874
--
656.067
24.108
1.312.134
24.108
936.264
12.054
330.243
11.985.965
Unallocated
--
--
--
--
2.563.039.924
--
659.585.441
888.535.490
688.471.312
105.907.915
211.815.830
4.506.003
263.749.010
80.988.022
68.551.187
221.208.358
27.491.024
27.491.024
--
--
--
--
--
1.136.261.474
203.362.303
243.581.084
--
327.033.095
56.534.780
36.731.263
51.873.735
18.089.629
--
21.458.198
16.480.307
254.260.338
10.147.654
915.265
355.799.951
6.904.347
3.802.264
--
79.257.798
--
3.037.035
19.335.691
Provision for outstanding claims is presented as short term liabilities in the accompanying unconsolidated financial statements whereas maturity distribution is
(*)
--
1.086.704
--
--
--
--
Market risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and credit spreads will affect
the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.
Currency risk
Foreign exchange gains and losses arising from foreign currency transactions are recorded at transaction dates. At the end of the
periods, foreign currency assets and liabilities evaluated by the Central Bank of the Republic of Turkey’s spot purchase rates and
the differences arising from foreign currency rates are recorded as foreign exchange gain or loss in the statement of income.
US Dollar
Euro
Other
currencies
Total
Financial assets
Total foreign currency assets
170.593.626
-120.322.331
290.915.957
44.519.657
12.320.065
2.232.333
59.072.055
5.389.927
-987.046
6.376.973
220.503.210
12.320.065
123.541.710
356.364.985
Insurance technical provisions
Total foreign currency liabilities
91.396.977
111.938.980
203.335.957
24.659.552
9.454.831
34.114.383
691.344
-691.344
116.747.873
121.393.811
238.141.684
87.580.000
24.957.672
5.685.629
118.223.301
US Dollar
Euro
Other
currencies
Total
Financial assets
146.548.975
-119.962.922
266.511.897
40.037.398
9.115.193
3.084.146
52.236.737
1.091.043
-1.036.139
2.127.182
187.677.416
9.115.193
124.083.207
320.875.816
104.016.906
127.927.163
231.944.069
21.350.893
26.396.067
47.746.960
1.666.077
948.835
2.614.912
127.033.876
155.272.065
282.305.941
34.567.828
4.489.777
(487.730)
38.569.875
31 December 2014
Net financial position
31 December 2013
TL equivalents of the related monetary amounts denominated in foreign currencies are presented in the above table.
If technical provision denominated in any currency not specified, ıt is evaluated are evaluated by the Central Bank of the Republic
of Turkey’s spot sales rates as at 31 December 2014 and Foreign currency transactions are recorded at the foreign exchange rates
ruling at the dates of the transactions and foreign currency denominated monetary items are evaluated by the Central Bank of the
Republic of Turkey’s spot purchase rates as at 31 December 2014.
Exposure to currency risk
Foreign currency rates used for the translation of foreign currency denominated assets and liabilities as at 31 December 2014
and 31 December 2013 are as follows:
31 December 2014
31 December 2013
31 December 2014
Profit or loss
Equity (*)
US Dollar
Euro
Other
Total, net
8.758.000
2.495.767
568.563
11.822.330
8.758.000
2.495.767
568.563
11.822.330
US Dollar
Euro
2,3189
2,1343
2,8207
2,9365
31 December 2013
Profit or loss
Equity (*)
3.456.783
448.978
(48.773)
3.856.988
3.456.783
448.978
(48.773)
3.856.988
Exposure to interest risk
The principal risk to which non-trading portfolios are exposed is the risk of loss from fluctuations in the future cash flows or
fair values of financial instrument because of a change in market interest rates. Interest rate risk is managed principally through
monitoring interest rate gaps and by having pre-approved limits for repricing bands.
As at reporting date; the interest rate profile of the Company’s interest earning financial assets and interest bearing financial
liabilities are detailed as below:
Financial assets with fixed interest rates:
Financial assets held for trading - reverse repos (Note 11)
Cash at banks (Note 14) (*)
Available for sale financial assets - Private debt securities (Note 11)
Cash deposited to insurance and reinsurance companies (Note 12)
Available for sale financial assets - Government bonds (Note 11)
Financial assets with variable interest rates:
Held to maturity investments - Government bonds (Note 11)
Financial assets held for trading - Government bonds (Note 11)
(*)
Demand deposits amounting to TL 6.208.075 TL are not included (31 December 2013: 16.793.473 TL).
31 December
2014
31 December
2013
5.887.281
1.350.525.371
-6.739.965
260.405.699
26.447.255
885.045.104
122.041.060
5.128.627
191.749.446
73.670.047
11.198.005
900.017
19.993.767
94.501.549
11.180.763
914.787
989.012
Interest rate sensitivity of the financial instruments
Interest rate sensitivity of the statement of income is the effect of the assumed changes in interest rates on the fair values of
financial assets at fair value through profit or loss and on the net interest income for the periods ended 31 December 2014 and
2013 of the floating rate non-trading financial assets and financial liabilities held at 31 December 2014 and 2013. This analysis
assumes that all other variables, in particular foreign currency rates, remain constant. The table below demonstrating the effect
of changes in interest rates on statement of income and equity excludes tax effects on related loss or income.
31 December 2014
Profit or loss
100 bp
100 bp
increase
decrease
Financial assets held for trading
Available for sale financial assets
Total, net
(20.889)
-(20.889)
31 December 2013
Profit or loss
100 bp
100 bp
increase
decrease
Total, net
(28.046)
-(28.046)
(*)
(*)
Equity effect also includes profit or loss effect.
21.616
-21.616
29.286
-29.286
Equity (*)
100 bp
increase
(20.889)
(3.964.215)
(3.985.104)
Equity (*)
100 bp
increase
(28.046)
(3.107.941)
(3.135.987)
100 bp
decrease
21.616
4.094.020
4.115.636
100 bp
decrease
29.286
3.208.812
3.238.098
Fair value information
The estimated fair values of financial instruments have been determined using available market information, and where they
exist, appropriate valuation methodologies.
The Company has classified its financial assets as held for trading, available for sale or held to maturity. As at the reporting date,
available for sale financial assets and financial assets held for trading are measured at their fair values based on their quoted
prices or fair value information obtained from brokers in the accompanying unconsolidated financial statements. Equity shares
not traded in active markets are measured at cost less impairment losses if any. Held to maturity investments with a carrying
amount of TL 73.670.047 (31 December 2013: TL: 94.501.549) are measured at amortised cost and their fair value amounting to
TL 74.133.508 (31 December 2013: TL 93.990.092) as at 31 December 2014.
Management estimates that the fair value of other financial assets and liabilities are not materially different than their carrying
amounts.
Fair value sensitivity of the equities
The effect on income as a result of 10% change in the fair value of equity instruments held as held for trading financial assets
(traded at İstanbul Stock Exchange) due to a reasonably possible change in equity indices, with all other variables held constant,
is as follows (excluding tax effect):
31 December 2014
Profit or loss
Equity (*)
Associates
Total, net
(*)
(303.683)
--(303.683)
Equity impact includes impact of change of conjectural interest rates on income statement.
(303.683)
(9.717.561)
(39.140.000)
(49.161.244)
31 December 2013
Profit or loss
Equity (*)
(266.316)
--(266.316)
(266.316)
(8.196.227)
(36.820.000)
(45.282.543)
Classification of fair value measurements
TFRS 7 - Financial instruments: Disclosures requires the classification of fair value measurements into a fair value hierarchy by
reference to the observability and significance of the inputs used in measuring fair value of financial instruments measured at fair
value to be disclosed. This classification basically relies on whether the relevant inputs are observable or not. Observable inputs
refer to the use of market data obtained from independent sources, whereas unobservable inputs refer to the use of predictions
and assumptions about the market made by the Company. This distinction brings about a fair value measurement classification
generally as follows:
Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly (as prices) or indirectly (derived from prices).
Level 3: Fair value measurements using inputs for the assets or liability that are not based on observable market data
(unobservable inputs).
Classification requires the utilization of observable market data, if available.
The classification of fair value measurements of financial assets and liabilities measured at fair value is as follows:
Level 1
Financial assets:
Associates (Note 9)
Financial assets held for trading (Note 11)
Available for sale financial assets (*) (Note 11)
Total financial assets
391.400.000
134.054.733
432.428.727
957.883.460
Level 1
Financial assets:
Associates (Note 9)
368.200.000
85.630.648
446.715.336
900.545.984
31 December 2014
Level 2
Level 3
-----
--3.297.263
3.297.263
31 December 2013
Level 2
Level 3
-----
--3.297.263
3.297.263
Total
391.400.000
134.054.733
435.725.990
961.180.723
Total
368.200.000
85.630.648
450.012.599
903.843.247
As at 31 December 2014, securities that are not publicly traded and the determination of fair values could not be obtained reliably amounting to TL 617.187 have
been measured at cost (31 December 2013: TL 863.950)
(*)
Available for sale, beginning of the period
Valuation gain, (valuation of financial assets)
Available for sale, at the end of the period
31 December
2014
31 December
2013
3.297.263
-3.297.263
3.272.355
24.908
3.297.263
Gains and losses from financial assets
Gains and losses recognized in the statement of income:
31 December 2014
31 December 2013
99.252.595
59.970.980
16.000.000
63.016.751
52.709.177
18.000.000
10.197.910
702.880
20.210.895
453.914
Interest income from bank deposits
Foreign exchange gains
Income from investments in associates
Income from debt securities classified as held to maturity financial
investments
Income from equity shares classified as available-for-sale financial
assets
Income from equity shares classified as trading financial assets
Income from debt securities classified as available-for-sale financial
assets
Income from debt securities classified as held for trading financial assets
Income from derivative transactions
Income from investment funds
Other
Investment income
35.373.747
75.040
205.678
21.308.588
3.106.153
256.924.372
15.639.877
262.958
212.931
1.604.205
1.232.065
183.252.297
Loss from valuation of financial assets
Foreign exchange losses
Loss from derivative transactions
Loss from disposal of financial assets
Investment expenses - including interest
Investment expenses
(3.509.979)
(49.954.025)
(184.509)
(7.713.065)
(136.623)
(61.498.201)
Financial gains and losses recognized in the statement of income,
net
195.426.171
(4.677.619)
(28.804.896)
(99.585)
(13.581.516)
-(47.163.616)
31 December 2014
31 December 2013
23.200.000
106.200.000
Financial gains and losses recognized in equity:
10.730.801
Fair value changes in investments in associates (Note 15)
Net gains transferred from statement of equity to the statement of
income on disposal of available for sale financial assets (Note 15)
Fair value changes in available-for-sale financial assets (Note 15)
Gains and losses recognized in equity, net
(9.609.723)
21.041.450
34.631.727
9.909.524
136.088.681
(2.723.732)
(13.677.094)
89.799.174
Capital management
The Company’s capital management policies include the following:
• To comply with the insurance capital requirements required by the Turkish Treasury
• To safeguard the Company’s ability to continue as a going concern
In accordance with the “Communiqué on Measurement and Assessment of Capital Adequacy for Insurance, Reinsurance and
Individual Pension Companies” issued by Turkish Treasury on 19 January 2008 dated and 26761 numbered; the Company
measured its minimum capital requirement as TL 847.030.553 as at 30 June 2014. As at 31 December 2014, the capital amount
of the Company presented in the unconsolidated financial statements are above the minimum capital requirement amounts
calculated according to the communiqué.
5 Segment reporting
A segment is a distinguishable component of the Company that is engaged either in providing products or services (business
segment), or in providing products or services within a particular economic environment (geographical segment), which is
subject to risks and rewards that are different from those of other segments.
Business segment
A business segment reporting of the Company is presented in accordance with TFRS 8 - Operating Segments standard in this
section.
Insurance on Fire and Natural Disaster
Insurance on fire and natural disasters covers material damages occurred due to fire, lightening, explosion or smoke, steam and
temperature resulted from fire, lightning and explosion up to insurance policy limits.
Motor Third Party Liability Insurance
According to the Motorway Traffic Code numbered 2918, Motor Third Party Liability Insurance is covers vehicle owner’s legal
liability for all bodily damages to third persons and financial damages to other vehicles.
Damages caused by the trailer or semi-trailers (included light trailers) or the vehicles pulled is covered by the insurance of the
trailer. However, the trailers used for transportation of people should be included in an additional liability insurance in order to
obtain coverage.
In order to reduce and prevent the damage in the accident happened, reasonable and necessary expenses of the policyholder is
compensated by the Company. This insurance also covers unfair claims against the policyholders.
Motor Vehicles
Insurance on motor vehicles covers the following dangers related with vehicles. It is possible to widen policy scope for
accessories or audio, display and communication devices which are not included in standard version of the vehicle by specifying
on the insurance policy.
• Accident with the motorized or non-motorized vehicles which used in high-ways,
• Crash with fixed or moving items without desire of the driver or accidents due to crash, capsize, fall or tumble
• The actions of third parties resulted from bad intention or mischief,
• Burn,
• Theft or attempted theft.
Health
Insurance on health compensates treatment costs of illnesses or accidental injuries during the period of insurance and, if any,
daily allowances in this general framework with special conditions up to the amount written in the policy. Geographical limits of
the insurance are stated in the policy.
Geographical segment
The main geographical segment which the Company operates is Turkey. Hence, the Company has not disclosed report on
geographical segments.
Motor third
party liability
Health Motor vehicles
Fire and
natural
disasters
Other Unallocated
Total
1 January - 31 December 2013
1- Earned Premiums (Net of Reinsurer
Share)
1.1- Written Premiums (Net of
Reinsurer Share)
1.2- Change in Reserve for Unearned
Premiums (Net of Reinsurer Shares
and Less the Amounts Carried
Forward)
1.3- Change in Reserve for Unexpired
Risks (Net of Reinsurer Share and Less
2- Other Technical Income (Net of
Reinsurer Share)
704.976.162
698.476.272
242.507.645
256.547.252
786.541.564
790.728.883
190.560.310
213.840.185
311.173.659
--
2.235.759.340
6.499.890
(14.039.607)
(4.187.319)
(23.279.875)
(27.082.837)
--
(62.089.748)
--
--
--
--
(27.260.973)
34.052
--
--
(27.260.973)
--
2.325.110.061
65.238
5.516.244
320.015
710.557.644
--
2.276.330
242.827.660
794.379.098
5.561.204
191.572.000
918.516
311.370.977
163.266
--
--
2.250.707.379
1- Incurred Losses (Net of Reinsurer
Share)
(579.959.219)
(199.455.063)
(555.299.019)
(98.225.647)
(305.140.113)
--
(1.738.079.061)
1.2- Change in Provisions for
Outstanding Claims (Net of Reinsurer
Share and Less the Amounts Carried
Forward)
(142.520.936)
(548.957)
(25.862.233)
(15.513.682)
(141.270.981)
--
(325.716.789)
3- Accrued Salvage and Subrogation
Income
Technical Income (*)
1.1- Claims Paid (Net of Reinsurer
Share)
2- Change in Other Technical Reserves
(Net of Reinsurer Share and Less the
4- Other Technical Provisions
Technical Expense
(437.438.283)
--
(181.604.847)
(10.218.490)
(771.782.556)
(198.906.106)
--
(44.314.719)
(6.594.484)
(250.364.266)
(529.436.786)
(3.035.177)
(186.178.682)
(14.949.198)
(759.462.076)
93.174
365.517.469
(82.711.965)
(10.577.300)
(38.744.510)
(5.851.538)
(153.398.995)
(163.869.132)
(2.357.559)
(71.843.471)
(5.608.222)
(384.949.365)
Investment Income
--
--
---
--
258.928.064
2.788.809
12.159.230
(1.412.362.272)
(15.970.036)
(522.686.229)
(43.221.932)
(2.319.957.258)
258.928.064
Investment Expense (*)
(85.300.178)
(85.300.178)
Income tax
(13.685.863)
(13.685.863)
Other (**)
Net loss before tax
Net loss
(*)
Investment income transferred to non-technical section from technical section amounting to TL 190.509.410 is not included.
(**)
Deferred tax income amounting TL 7.396.097 is presented as income tax.
(19.132.198)
(19.132.198)
85.245.809
71.559.946
Motor third
party liability
Fire and
natural
disasters
Other
Unallocated
Total
Share)
Reinsurer Share)
Forward)
Reinsurer Share)
Income
Share)
1.1- Claims Paid (Net of Reinsurer
Share)
493.420.390
199.257.307
721.082.517
149.968.441
262.060.515
--
1.825.789.170
(138.056.176)
(12.891.459)
(54.285.632)
(13.140.337)
(14.032.383)
--
(232.405.987)
12.085
--
--
--
(9.032.935)
--
(9.020.850)
1.843.709.742
631.464.481
212.148.766
775.368.149
163.108.778
75.063
285.125.833
84.400
--
54.849
4.959.591
185.128
498.434.830
--
2.524.934
199.442.435
731.359.774
7.752.323
150.680.930
637.426
263.791.773
1.646.858
--
(428.640.496)
(156.834.895)
(479.833.052)
(73.474.442)
(207.304.119)
--
2.067.216.007
2.924.374
14.996.198
(1.346.087.004)
1.2- Change in Provisions for
Forward)
(291.979.894)
(156.751.764)
(490.009.240)
(68.674.051)
(139.551.206)
--
(1.146.966.155)
(136.660.602)
(83.131)
10.176.188
(4.800.391)
(67.752.913)
--
(199.120.849)
(141.750.670)
(1.780.007)
--
(274.209.782)
--
Technical Expense
--
(13.428.446)
(583.819.612)
--
(36.294.964)
(6.115.753)
(199.245.612)
(2.087.392)
(178.514.725)
(15.995.101)
(676.430.270)
(8.555.192)
(43.655.601)
(6.661.240)
(132.346.475)
(62.618.146)
(2.507.510)
Investment Income
---
186.213.348
(12.422.591)
(462.834.106)
(44.708.050)
(1.866.051.751)
186.213.348
(63.995.428)
(63.995.428)
Income tax
(11.654.589)
(11.654.589)
(20.759.398)
Other (**)
Net loss before tax
Net loss
(*)
(20.759.398)
79.116.513
67.461.924
Investment income transferred to non-technical section from technical section amounting to TL 123.220.226 TL is not included.
(**)
6 Tangible assets
Movements in tangible assets in the period from 1 January to 31 December 2014 are presented below:
Cost:
Investment properties (Note 7)
Buildings for own use
Machinery and equipment
Motor Vehicles
Other tangible assets (including leasehold
improvements)
1 January 2014
Additions
Disposals
31 December
2014
6.982.776
6.520.974
32.800.391
11.331.085
1.285.983
-319.222
2.925.379
444.331
383.160
-(51.463)
(1.171.752)
-(306.920)
6.982.776
6.788.733
34.554.018
11.775.416
1.362.223
18.262.277
4.166.354
81.349.840
1.138.850
-5.210.942
--(1.530.135)
19.401.127
4.166.354
85.030.647
3.578.553
1.795.812
23.879.216
8.729.811
813.465
139.655
131.780
3.198.899
666.091
215.321
-(25.772)
(1.164.362)
-(255.057)
3.718.208
1.901.820
25.913.753
9.395.902
773.729
Accumulated depreciation:
Motor vehicles
improvements)
3.593.702
4.166.105
46.556.664
Carrying amounts
34.793.176
3.259.748
199
7.611.693
--(1.445.191)
6.853.450
4.166.304
52.723.166
32.307.481
Cost:
Motor Vehicles
improvements)
1 January 2013
Additions
Disposals
31 December
2013
6.982.776
6.387.729
26.268.960
9.031.553
1.299.851
-1.222.795
6.531.431
2.299.532
183.855
-(1.089.550)
--(197.723)
6.982.776
6.520.974
32.800.391
11.331.085
1.285.983
4.038.677
4.166.354
58.175.900
14.977.547
-25.215.160
(753.947)
-(2.041.220)
18.262.277
4.166.354
81.349.840
3.438.898
2.221.271
20.908.142
8.495.404
764.551
139.655
116.975
2.971.074
234.407
232.810
-(542.434)
--(183.896)
3.578.553
1.795.812
23.879.216
8.729.811
813.465
Motor vehicles
improvements)
3.255.088
4.165.906
43.249.260
Carrying amounts
14.926.640
648.138
199
4.343.258
(309.524)
-(1.035.854)
3.593.702
4.166.105
46.556.664
34.793.176
There is not any change in depreciation method in the current period.
There is not any mortgage over tangible assets of the Company as at 31 December 2014 and 31 December 2013.
7 Investment properties
As at 31 December 2014, the total carrying amount of the investment properties is TL 3.264.568 (31 December 2013: TL
3.404.223). The fair values of the investment properties are determined by a third party independent expertise firm authorized
by Capital Markets Board of Turkey as TL 40.077.000. The total rental income from the investment properties for the year ended
31 December 2013 is TL 1.772.698 (31 December 2013: TL 1.698.492).
8 Intangible assets
Movements in intangible assets in the period from 1 January to 31 December 2014 are presented below:
Cost:
Goodwill
Advances given for intangible
assets
Other intangible assets
1 January 2014
Additions
Transfers
Disposals
31 December
2014
16.250.000
--
--
--
16.250.000
Accumulated amortization:
19.296.314
54.879.873
90.426.187
2.853.643
12.779.449
15.633.092
(20.420.579)
20.420.579
--
----
1.729.378
88.079.901
106.059.279
27.614.154
27.614.154
16.190.284
16.190.284
---
43.804.438
43.804.438
Carrying amounts
62.812.033
---
62.254.841
Movements in intangible assets in the period from 1 January to 31 December 2013 are presented below
Cost:
Goodwill
assets
1 January 2013
Additions
Transfers
16.250.000
--
--
Disposals
31 December
2013
16.250.000
31.717.343
21.643.962
69.611.305
11.190.332
11.350.608
22.540.940
(21.885.303)
21.885.303
--
(1.726.058)
-(1.726.058)
19.296.314
54.879.873
90.426.187
15.125.600
15.125.600
12.488.554
12.488.554
---
27.614.154
27.614.154
Carrying amounts
54.485.705
---
62.812.033
9 Investments in associates
31 December 2014
Participation
Carrying value
rate
391.400.000
%20,0
391.400.000
Investments in associates, net
Total financial assets (Note 4.2)
Name
Anadolu Hayat Emeklilik
A.Ş. (consolidated financial
statements)
391.400.000
31 December 2013
Participation
Carrying value
rate
368.200.000
%20,0
368.200.000
368.200.000
Total
assets
Shareholders’
equity
Retained
earnings
Profit for
the period
Audited
or not
Period
10.157.734.455
616.308.553
12.090.039
95.160.780
Audited
31 December
2014
In the current period, the Company has bonus stocks amounting to TL 6.000.000 owing to capital expenditure from internal
resources in income from subsidiaries. The Company has TL 10.000.000 of dividend income from subsidiaries.
10 Reinsurance assets and liabilities
As at 31 December 2014 and 31 December 2013, outstanding reinsurance assets and liabilities of the Company in accordance
with existing reinsurance contracts are as follows:
Reinsurance assets
Reserve for unearned premiums, ceded (Note 17)
Provision for outstanding claims, ceded (Note 4.2), (Note 17)
Commission income accrual from reinsurers (Note 12)
Cash deposited to reinsurance companies (Note 12)
Reinsurers share in the provision for subrogation and salvage
receivables
Total
There is no impairment losses recognised for reinsurance assets.
Reinsurance liabilities
Payables to the reinsurers related to premiums written (Note 19)
Deferred commission income (Note 19)
Commission payables to the reinsurers related to written premiums (Note 23)
Cash deposited by reinsurance companies (Note 19)
Total
31 December 2014
31 December 2013
294.929.264
229.799.663
1.250.015
6.739.965
290.028.419
135.357.501
1.086.704
5.128.627
36.305
532.755.212
119.739
431.720.990
31 December 2014
31 December 2013
188.610.275
45.447.065
1.576.728
7.277.133
242.911.201
230.767.903
39.363.495
915.265
3.105.906
274.152.569
Gains and losses recognized in the statement of income in accordance with existing reinsurance contracts are as follows:
Premiums ceded during the period (Note 17)
Reserve for unearned premiums, ceded at the beginning of the period
(Note 17)
Reserve for unearned premiums, ceded at the end of the period (Note 17)
Premiums earned, ceded (Note 17)
31 December 2014
31 December 2013
(605.617.965)
(618.521.175)
(290.028.419)
294.929.264
(600.717.120)
(218.883.986)
290.028.419
(547.376.742)
140.834.682
102.233.055
Claims paid, ceded during the period (Note 17)
Provision for outstanding claims, ceded at the beginning of the period
(Note 17)
Provision for outstanding claims, ceded at the end of the period (Note 17)
Claims incurred, ceded (Note 17)
(135.357.501)
229.799.663
235.276.844
(89.440.431)
135.357.501
148.150.125
Commission income accrued from reinsurers during the period (Note 32)
Deferred commission income at the beginning of the period (Note 19)
Deferred commission income at the end of the period (Note 19)
Commission income earned from reinsurers (Note 32)
60.026.011
30.698.798
(32.107.489)
58.617.320
51.944.012
25.952.255
(30.698.798)
47.197.469
Commission debt accrued to reinsurers
Commission receivable accrued from reinsurers
(1.576.728)
1.250.015
-1.086.704
(307.149.669)
(350.942.444)
Total, net
11 Financial assets
As at 31 December 2014 and 31 December 2013, the Company’s financial assets are as follows
Held to maturity financial assets
Impairment loss on available for sale financial assets
Total
31 December 2014
31 December 2013
442.140.789
73.670.047
134.054.733
(5.797.612)
644.067.957
456.674.161
94.501.549
85.630.648
(5.797.612)
631.008.746
As at 31 December 2014 and 31 December 2013, the Company’s available for sale financial assets are as follows:
31 December 2014
Face
Value
Cost
Fair
Value
Carrying Value
261.907.366
19.560.000
14.360.000
5.000.000
200.000
281.467.366
260.630.673
19.561.015
14.360.000
5.000.000
201.015
280.191.688
271.603.704
19.993.767
14.713.703
5.078.714
201.350
291.597.471
271.603.704
19.993.767
14.713.703
5.078.714
201.350
291.597.471
Other non-fixed income financial assets:
Investment funds
Issued by İş Portföy (Note 45)
Equity shares
Impairment loss on equity shares
3.714.742.000
3.714.742.000
56.198.951
-3.770.940.951
43.165.318
43.165.318
82.023.168
-125.188.486
43.655.648
43.655.648
106.887.670
(5.797.612)
144.745.706
43.655.648
43.655.648
106.887.670
(5.797.612)
144.745.706
Total available for sale financial assets (Note 4.2)
4.052.408.317
405.380.174
436.343.177
436.343.177
Debt instruments:
Government bonds - TL
Private sector bonds - TL
Issued by ISGYO (Note 45)
Issued by ISFIN
Others
31 December 2013
Face
Value
Cost
Fair
Value
Carrying Value
208.933.298
134.001.139
133.000.000
1.001.139
342.934.437
205.043.677
122.295.528
121.293.570
1.001.958
327.339.205
202.930.209
123.030.072
122.028.890
1.001.182
325.960.281
202.930.209
123.030.072
122.028.890
1.001.182
325.960.281
Investment funds
Founded by Is Portföy (Note 45)
Equity shares
4.089.046.000
4.089.046.000
51.223.377
-4.140.269.377
42.399.932
42.399.932
74.521.510
-116.921.442
38.792.780
38.792.780
91.921.100
(5.797.612)
124.916.268
38.792.780
38.792.780
91.921.100
(5.797.612)
124.916.268
4.483.203.814
444.260.647
450.876.549
450.876.549
Debt instruments:
Issued by İş Bankası (Note 45)
Others
As at 31 December 2014 and 31 December 2013, the Company’s financial assets held for trading are as follows
31 December 2014
Face
Value
Debt instruments:
Reverse repo receivables
Investment funds
Founded by Iş Bankası (Note 45)
Founded by Iş Portföy Yönetimi A.Ş.(Note 45)
Founded by Işbank GmbH (Note 45)
Equity shares
Total financial assets held for trading (Note 4.2)
Cost
Fair
Value
Carrying Value
900.000
907.616
5.885.733
6.793.349
900.017
5.887.281
6.787.298
900.017
5.887.281
6.787.298
7.393.158.949
120.605.000
7.272.463.818
90.131
2.287.783
106.660.295
9.009.287
89.847.008
7.804.000
4.085.272
110.745.567
124.230.603
15.972.195
95.938.343
12.320.065
3.036.832
127.267.435
124.230.603
15.972.195
95.938.343
12.320.065
3.036.832
127.267.435
117.538.916
134.054.733
134.054.733
900.000
31 December 2013
Face
Value
Debt instruments:
Investment funds
Founded by Iş Portföy Yönetimi A.Ş.(Note 45)
Equity shares
Cost
Fair
Value
Carrying Value
900.000
910.156
26.442.546
27.352.702
914.787
26.447.255
27.362.042
914.787
26.447.255
27.362.042
2.901.419.050
120.605.000
2.780.723.919
90.131
2.287.783
47.118.587
9.009.287
30.305.300
7.804.000
4.085.272
51.203.859
55.605.446
13.588.728
32.901.525
9.115.193
2.663.160
58.268.606
55.605.446
13.588.728
32.901.525
9.115.193
2.663.160
58.268.606
78.556.561
85.630.648
85.630.648
As at 31 December 2014 and 31 December 2013, the Company’s financial assets held to maturity are as follows:
31 December 2014
Debt instruments:
Total financial assets held to maturity
Face
Value
Cost
Fair
Value
Carrying Value
55.937.785
55.937.785
57.921.026
57.921.026
74.133.508
74.133.508
73.670.047
73.670.047
31 December 2013
Debt instruments:
Face
Value
Cost
Fair
Value
Carrying Value
73.661.976
73.661.976
76.666.867
76.666.867
93.990.092
93.990.092
94.501.549
94.501.549
All debt instruments (financial assets held to maturity) presented above are publicly traded in active markets and the fair value of
financial assets are classified in the 1st Level.
As at 31 December 2014, equity shares classified as available for sale financial assets with a carrying amount of TL 3.914.450 are
not publicly traded (31 December 2013: TL 4.161.213).
There is no debt security issued during the period or issued before and paid during the period by the Company.
There is no financial asset that is overdue but not impaired among the Company’s financial investments portfolio. As at
31 December 2014, TL 5.797.612 of impairment loss is recognised for equity shares classified as available for sale in the
accompanying unconsolidated financial statements (31 December 2013: TL 5.797.612).
Value increases in financial assets including equity shares classified as available for sale financial assets for the last 3 years
(including tax effects):
Year
Change in value
increase /
(decrease)
Total increase
in value
2014
2013
2012
34.631.727
89.799.174
115.217.914
336.666.816
302.035.089
212.235.915
31 December 2014
Available
Held to
for sale
maturity
450.876.549
94.501.549
450.725.656
-(494.361.599)
(18.745.842)
24.347.100
--(2.085.660)
4.755.471
-436.343.177
73.670.047
Total
604.561.491
541.175.656
(544.018.273)
33.791.991
(2.085.660)
4.755.471
638.180.676
31 December 2013
Available
Held to
for sale
maturity
218.238.305
89.590.740
692.777.960
-(447.305.977)
(796.600)
(16.767.758)
--5.707.409
3.934.019
-450.876.549
94.501.549
Total
349.880.119
714.083.260
(450.845.409)
(18.197.907)
5.707.409
3.934.019
604.561.491
Movements of the financial assets during the period are presented below:
Trading
59.183.393
90.450.000
(30.910.832)
9.444.891
--128.167.452
(*)
Balance at the beginning of the period
Acquisitions during the period
Disposals (sale and redemption)
Change in the fair value of financial assets (Note 15)
Change in amortized cost of the financial assets
Bonus shares acquired
Balance at the end of the period
(*)
Amount of reverse repo to TL 5.887.281 TL (31 December 2013: 26.447.255 TL) are excluded.
Trading
42.051.074
21.305.300
(2.742.832)
(1.430.149)
--59.183.393
(*)
(*)
Amount of reverse repo to TL 26.447.255 (31 December 2012: TL: 5.542.173) are excluded
Financial assets blocked in favour of the Turkish Treasury as a guarantee for the insurance activities are as follows.
31 December 2014
Held to maturity financial assets (Note 17)
Available for sale financial assets (Note 17)
Total
Face
Value
Cost
Fair
Value
Carrying Value
55.937.785
10.000.000
65.937.785
57.921.026
9.801.651
67.722.677
74.133.508
10.145.962
84.279.470
73.670.047
10.145.962
83.816.009
31 December 2013
Face
Value
Cost
Fair
Value
Carrying Value
20.000.000
64.467.988
84.467.988
19.775.285
67.074.876
86.850.161
19.677.439
82.079.788
101.757.227
19.677.439
82.596.991
102.274.430
31 December
2014
31 December
2013
Receivables from main operations (Note 4.2)
Other receivables (Note 4.2)
Income prepaid expenses (Note 4.2), (Note 10)
Other current assets (Note 4.2)
Receivables from related parties (Note 4.2)
Total
797.454.113
3.595.183
2.733.430
1.895.592
-805.678.318
773.925.226
2.968.734
1.086.704
735.558
72.324
778.788.546
Short-term receivables
Long and medium-term receivables
Total
805.678.318
-805.678.318
778.788.546
-778.788.546
Total
12 Loans and receivables
As at 31 December 2014 and 31 December 2013, the details of the receivables from main operations are as follows:
Receivables from agencies, brokers and intermediaries
Salvage and subrogation receivables
Receivables from policyholders
Long term receivable which is bank guarantee and three months credit
card
Total receivables from insurance operations, net
Receivables from reinsurance operations
Cash deposited to insurance and reinsurance companies (Note 4.2),
(Note 10)
Provisions for receivables from insurance operations - subrogation
receivables
Doubtful receivables from insurance operations - subrogation
receivables
Provisions for doubtful receivables from insurance operations subrogation receivables (Note 4.2)
Doubtful receivables from main operations - premium receivables
Provisions for doubtful receivables from main operations premium receivables (Note 4.2)
31 December 2014
31 December 2013
624.433.183
30.648.790
33.242.694
610.583.925
29.179.630
35.367.913
63.044.183
751.368.850
61.066.508
736.197.976
47.022.365
42.073.701
(7.677.067)
(9.475.078)
(86.645.265)
26.735.242
(77.541.164)
25.287.994
6.739.965
5.128.627
86.645.265
77.541.164
(26.735.242)
797.454.113
(25.287.994)
773.925.226
As at 31 December 2014 and 31 December 2013, the details of mortgages and other guarantees for the Company’s receivables are
presented below:
Mortgage notes
Letters of guarantees
Other guarantees
Government bonds and treasury bills
Total
31 December 2014
31 December 2013
71.597.067
71.825.655
15.188.186
2.976.479
161.587.387
71.634.717
64.353.218
12.620.807
2.939.585
151.548.327
Provisions for overdue receivables and receivables not due yet
a) Receivables under legal or administrative follow up (due): 26.735.242 TL (31 December 2013: TL 25.287.994).
b) Provision for subrogation receivables under legal or administrative follow up: 94.322.332 TL (31 December 2013: TL
87.016.242).
The Company’s receivables from and payables to shareholders, associates and subsidiaries are detailed in note 45 - Related party
transactions.
The details of the receivables and payables denominated in foreign currencies and foreign currency rates used for the translation
are presented in Note 4.2- Financial risk management.
13 Derivative financial instruments
As at 31 December 2014, the Company does not have derivative financial instruments (31 December 2013: None).
14 Cash and cash equivalents
As at 31 December 2014 and 31 December 2013, cash and cash equivalents are as follows:
31 December 2014
At the
At the
beginning of
end of
the period
the period
Cash on hand
Bank deposits
Cheques given and payment orders
Bank guaranteed credit card receivables with
maturities less than three months
Cash and cash equivalents in the balance sheet
Bank deposits - blocked (*) (Note 17)
Time deposits with maturities longer than 3 months
Interest accruals on banks deposits
Cash and cash equivalents in the statement of
cash flows
(*)
37.347
1.356.733.446
(171.519)
49.256
901.838.577
(1.025.984)
31 December 2013
At the
At the
beginning of
end of
the period
the period
49.256
901.838.577
(1.025.984)
59.000
810.515.425
(1.104.472)
249.449.440
1.606.048.714
252.850.367
1.153.712.216
252.850.367
1.153.712.216
159.051.422
968.521.375
(223.171.410)
(335.567.238)
(3.580.842)
(151.508.238)
(174.210.161)
(2.481.010)
(151.508.238)
(174.210.161)
(2.481.010)
(125.966.707)
(315.826.956)
(2.299.223)
1.043.729.224
825.512.807
825.512.807
524.428.489
As at 31 December 2014 and 31 December 2013 cash collateral kept in favour of the Turkish Treasury as a guarantee for the insurance activities.
As at 31 December 2014 and 31 December 2013, bank deposits are further analyzed as follows:
Foreign currency denominated bank deposits
- time deposits
- demand deposits
Bank deposits in Turkish Lira
- time deposits
- demand deposits
Bank deposits
31 December
2014
31 December
2013
119.637.331
3.883.616
111.825.146
12.217.907
1.230.888.040
2.324.459
1.356.733.446
773.219.958
4.575.566
901.838.577
15 Equity
Paid in capital
The shareholder having direct or indirect control over the shares of the Company is İş Bankası Group.
The Company does not increase its share capital in the current period.
The Company unregistered Group A shares as of 11 April 2013 in which approved in Main Article of the Company dated in 11
April 2013. The share capital of the Company consists of 50,000,000,000 (31 December 2013: 50,000,000,000 shares) issued
shares with TL 0.01 nominal value each.
Other capital reserves
In accordance with tax legislation, 75% of profits from sales of participation shares and real states included in the assets of
companies is exempt from corporate tax provided that it is classified under a special fund for full five years. The exempt gains
cannot be transferred to another account other than a capital increase or cannot be withdrawn from the entity for five years. As
at 31 December 2014, tax exempt gain from participation shares and real estate sale in 2010 amounting to TL 8.081.516 and in
2011 amounting to TL 80.025 is classified as other capital reserves and also in 2013 amounting TL 647.763 reclassified to other
capital reserves as a gain on sale of fixed assets and equity.
Other capital reserves at the beginning of the period
Transfer from profit
Other capital reserves at the end of the period
31 December 2014
31 December 2013
8.161.541
647.763
8.809.304
8.161.541
-8.161.541
Legal reserves
The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial Code. The first legal
reserve is appropriated out of the statutory profits at the rate of 5%, until the total reserve reaches a maximum of 20% of the
entity’s share capital. The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the
entity’s share capital. The first and second legal reserves are not available for distribution unless they exceed 50% of the share
capital, but may be used to absorb losses in the event that the general reserve is exhausted.
The movements of legal reserves are as follows:
Legal reserves at the beginning of the period
Legal reserves at the end of the period
31 December 2014
31 December 2013
30.638.111
141.651
30.779.762
30.638.111
-30.638.111
31 December 2014
31 December 2013
18.123.361
2.422.240
20.545.601
18.123.361
-18.123.361
31 December 2014
31 December 2013
6.993.082
269.138
7.262.220
6.993.082
-6.993.082
Extraordinary reserves
The movements of extraordinary reserves are presented below:
Extraordinary reserves at the beginning of the period
Extraordinary reserves at the end of the period
Statutory reserves
The movements of statutory reserves are presented below:
Statutory reserves at the beginning of the period
Statutory reserves at the end of the period
Valuation of financial assets
Movement of fair value reserves of available for sale financial assets and associates are presented below:
31 December 2014
Available
for sale
financial
assets
Associates
Fair value reserves at the
beginning of the period
Change in the fair value
Net gains transferred to the
statement of income
Deferred tax effect
Fair value reserves at the end of
the period
Total
8.866.957 293.168.132 302.035.089
24.347.100
(3.609.723)
(3.305.650)
23.200.000
(6.000.000)
--
31 December 2013
Available
for sale
financial
assets
Associates
25.267.783 186.968.132 212.235.915
47.547.100 (16.767.758)
(9.609.723)
(3.305.650)
26.298.684 310.368.132 336.666.816
Total
(2.723.732)
3.090.664
106.200.000
---
89.432.242
(2.723.732)
3.090.664
8.866.957 293.168.132 302.035.089
Other profit reserves
In accordance with the 4 July 2007 dated and 2007/3 numbered Compliance Circular issued by the Turkish Treasury, it was
stated that the companies would not further provide earthquake provision for the year 2007. However, it was also stated that
earthquake provisions provided in previous periods (earthquake provision in the financial statements as at 31 December 2006)
should be transferred to the reserve accounts under equity in accordance with the 5th Temporary Article of the Insurance Law.
The companies had to transfer total amount of provisions, including earthquake provisions reserved as at 31 December 2006 and
related gains obtained from investment of these amounts, to the account called as “549.01 - transferred earthquake provisions”
which would be opened as at 1 September 2007 within Uniform Chart of Account and the reserves amount should not be subject
to dividend distribution or should not be transferred to other accounts.
Accordingly, the Company initially transferred total provisions amounting to TL 96.036.157 including earthquake provisions
reserved as at 31 December 2006 and related gains obtained from investment of this amount, to the reserve accounts under
equity, TL 51.846.111 of this amount is used for capital increase in 2010. Accordance with IAS 19, to add the amount of actuarial
loss and net profit of TL 625.539 defined remeasure net profit debt, the amount of new balance is TL 44.209.563.
Profit on assets sale that will be transferred to capital
cannot be transferred to another account other than a capital increase or cannot be withdrawn from the entity for five years.
In the direction of sector announcement made by Treasury dated 27 October ,2008 and numbered 2008/41, the Company
classified the gain on sale from the land in real estate amounting to TL 920.272 which is into “Profit not Available for Distribution”
in accordance with the Board of Directors decision dated 2 April 2013 and numbered 6807,dated 26 June and numbered 6844.
16 Other reserves and equity component of DPF
As at 31 December 2014 and 31 December 2013, change in fair values of available-for-sale financial assets which is presented as
“valuation of financial assets” and earthquake provisions provided in the previous years presented under “other profit reserves”
are explained in detail in Note 15 - Equity above. As at 31 December 2014 and 31 December 2013, the Company does not hold any
insurance or investment contracts which contain a DPF.
17 Insurance contract liabilities and reinsurance assets
Estimation of the ultimate payment for the outstanding claims is one of the most important accounting assumptions of the
Company. Estimation of the insurance contract liabilities contains several ambiguities by nature. The Company makes calculation
of the related insurance technical provisions accordance with the Insurance Legislation and reflects them into financial
statements as mentioned in Note 2 - Summary of significant accounting policy.
As at 31 December 2014 and 31 December 2013, technical reserves of the Company are as follows::
31 December 2014
31 December 2013
Reserve for unearned premiums, gross
Reserve for unearned premiums, SSI share
Reserves for unearned premiums, net
1.491.252.563
(294.929.264)
(36.692.792)
1.159.630.507
1.422.324.312
(290.028.419)
(34.755.134)
1.097.540.759
Provision for outstanding claims, gross
Provision for outstanding claims, ceded (Note 10)
Provision for outstanding claims, net
1.243.987.764
(229.799.663)
1.014.188.101
823.828.813
(135.357.501)
688.471.312
52.687.216
(12.307.870)
40.379.346
22.489.031
(9.370.658)
13.118.373
60.549.876
7.702.761
68.252.637
44.579.840
7.702.761
52.282.601
Total technical provisions, net
2.282.450.591
1.851.413.045
Short-term
Medium and long-term
2.214.197.954
68.252.637
2.282.450.591
1.799.130.444
52.282.601
1.851.413.045
Gross of provision unexpired risk reserve
Reinsurer’s share of the provision for unexpired risk
Provision unexpired risk reserve, net
Equalization provision, net (*)
General provision, net
Other technical provisions, net
(*)
Net losses (after reinsurance) resulted from earthquake occurred in Van amounting to TL 7.101.831 TL (31 December 2013: 7.101.831 TL) are decreased from prior
periods’ equalization provision based on the regulation.
As at 31 December 2014 and 31 December 2013, movements of the insurance liabilities and related reinsurance assets are
presented below:
Reserve for unearned premiums
Reserve for unearned premiums at the beginning of
the period
Premiums written during the period
Premiums earned during the period
Reserve for unearned premiums at the end of the
period
the period
period
31 December 2014
Reinsurer
Gross
share
1.422.324.312
3.004.830.066
(2.935.901.815)
1.491.252.563
(294.929.264)
31 December 2013
Reinsurer
Gross
share
1.104.218.773
2.749.704.405
(2.431.598.866)
1.422.324.312
Provision for outstanding claims
Provision for outstanding claims at the beginning of the period
Claims reported during the period and changes in the estimations of
provisions for outstanding claims provided at the beginning of the
period
Claims paid during the period
Provision for outstanding claims at the end of the period
provisions for outstanding claims provided at the beginning of the
period
(290.028.419)
(605.617.965)
600.717.120
(218.883.986)
(618.521.175)
547.376.742
(290.028.419)
SSI share
(34.755.134)
1.097.540.759
(74.102.040)
2.325.110.061
72.164.382 (2.263.020.313)
(36.692.792)
1.159.630.507
SSI share
Net
(20.200.015)
865.134.772
(63.967.223)
2.067.216.007
49.412.104 (1.834.810.020)
(34.755.134)
31 December 2014
Gross
Ceded
823.828.813
1.973.355.905
(1.553.196.954)
1.243.987.764
(135.357.501)
1.494.237.129
(1.249.199.210)
823.828.813
1.097.540.759
Net
688.471.312
(235.276.844)
1.738.079.061
140.834.682 (1.412.362.272)
(229.799.663) 1.014.188.101
31 December 2013
Gross
Ceded
578.790.894
Net
(89.440.431)
Net
489.350.463
(148.150.125)
1.346.087.004
102.233.055 (1.146.966.155)
(135.357.501)
688.471.312
Claim development tables
The basic assumption used in the estimation of provisions for outstanding claims is the Company’s past experience on claim
developments. Judgment is used to assess the extent to which external factors such as judicial decisions and government
legislation affect the estimates. The sensitivity of certain assumptions like legislative change, uncertainty in the estimation
process, etc, is not possible to quantify. Furthermore, because of delays that arise between occurrence of a claim and its
subsequent notification and eventual settlement, the outstanding claim provisions are not known with certainty at the reporting
date. Consequently, the ultimate liabilities will vary as a result of subsequent developments. Differences resulting from
reassessment of the ultimate liabilities are recognized in subsequent financial statements.
Development of insurance liabilities enables to measure the performance of the Company in estimation of its ultimate claim
losses. The amounts presented on the top of the below tables show the changes in estimations of the Company for the claims
in subsequent years after claim years. The amounts presented on the below of the below tables give the reconciliation of total
liabilities with provision for outstanding claims presented in the accompanying financial statements.
31 December 2014
Claim year
2010
2011
2012
2013
2014
Total
Claim year
856.910.386 1.075.581.281 1.495.474.317 1.229.263.704
1.717.748.856
6.374.978.544
1 year later
867.349.763 1.144.103.263 1.543.105.072 1.300.026.322
-4.854.584.420
2 years later
878.025.588 1.189.429.253 1.609.382.065
--3.676.836.906
3 years later
900.866.545 1.238.843.054
---2.139.709.599
4 years later
928.050.817
----928.050.817
Current estimate of
cumulative claims
928.050.817 1.238.843.054 1.609.382.065 1.300.026.322
1.717.748.856
6.794.051.114
Cumulative payments to
date
861.604.436 1.131.547.961 1.398.954.819 1.116.056.443
1.189.365.685
5.697.529.344
Liability recognized in
the financial statements
66.446.381
107.295.093
210.427.246
183.969.879
528.383.171
1.096.521.770
Liability recognized
before 2009
-----147.465.994
Total gross outstanding claims presented in the financial statements at the end of the period
1.243.987.764
31 December 2013
Claim year
2009
2010
2011
2012
2013
Claim year
902.239.347
851.459.419 1.067.586.430 1.482.692.631 1.272.774.899
1 year later
907.824.330
861.798.734 1.135.585.447 1.529.990.732
-2 years later
921.465.530
872.386.982 1.180.548.434
--3 years later
931.210.335
895.069.601
---4 years later
962.409.997
----Current estimate of
cumulative claims
962.409.997
895.069.601 1.180.548.434 1.529.990.732 1.272.774.899
date
899.070.812
840.148.526 1.092.013.460 1.336.660.376
919.034.121
Liability recognized in
the financial statements
63.339.185
54.921.075
88.534.974 193.330.356
353.740.778
Liability recognized
before 2008
-----Total gross outstanding claims provision presented in the financial statements at the end of the period
Total
5.576.752.726
4.435.199.243
2.974.400.946
1.826.279.936
962.409.997
5.840.793.663
5.086.927.295
753.866.368
69.962.445
823.828.813
Total amount of guarantee that should be placed by the Company for life and non-life branches and guarantees placed for the life
and non-life branches in respect of related assets
Non-life:
Bank deposits (Note 14)
Financial assets (*) (Note 11)
Total
Non-life:
Total
31 December 2014
Should be
placed (**)
Placed (*)
282.343.518
222.697.267
84.612.376
307.309.643
31 December 2013
Should be
placed (**)
Placed (*)
230.055.081
151.443.845
101.932.249
253.376.094
Carrying
amount
223.171.410
83.816.009
306.987.419
Carrying
amount
151.508.238
102.274.430
253.782.668
“As at 31 December 2014 and 31 December 2013, government bonds and treasury bills are measured at daily official prices announced by the Central Bank of
Turkey in accordance with the 6th Article of “Circular Related to the Financial Structure of Insurance, Reinsurance, and Private Pension Companies.
(*)
“According to the 7th article of the “Circular Related to the Financial Structure of Insurance, Reinsurance, and Private Pension Companies” which regulates necessary
guarantee amount, minimum guarantee fund for capital adequacy calculation period will be established as a guarantee in two months following the calculation period.
According to “Regulations Regarding to Capital Adequacy Measurement and Assessment of Insurance, Reinsurance, and Private Pension Companies”, companies
must prepare their capital adequacy tables twice in a financial year at June and December periods and must sent capital adequacy tables to the Turkish Treasury
Department within two months. Since the amounts that should be placed as of 31 December 2014 (31 December 2013) will be through the calculated amounts as of
30 June 2014 (30 June 2013), the settled amounts as of June is presented as “should be placed” amounts.
(**)
Company’s number of life insurance policies, additions, disposals during the period and the related mathematical reserves
None.
Distribution of new life insurance policyholders in terms of numbers and gross and net premiums as individual or group during
the period
None.
Distribution of mathematical reserves for life insurance policyholders who left the Company’s portfolio as individual or group
during the period
None.
Deferred commission expenses
The Company capitalizes commissions paid to the intermediaries related to policy production under short-term and long-term
prepaid expenses. As at 31 December 2014, short-term prepaid expenses amounting to TL 205.884.923 (31 December 2013:
TL 196.680.406) consist of deferred commission expenses amounting to TL 187.284.759 (31 December 2013: TL 182.110.391)
and other prepaid expenses amounting to TL 5.260.484 (31 December 2013: TL 5.905.318). The amount of commission expense
TL13.339.680 TL (31 December 2013: 8.664.697) Long-term prepaid expenses amounting TL 3.562.038 (31 December 2013: TL
34.671) are composed of other prepaid expenses.
As at 31 December 2014 and 31 December 2013, the movements of deferred commission expenses are presented below:
31 December 2014
31 December 2013
190.775.088
429.400.515
(419.551.164)
200.624.439
156.049.462
392.156.692
(357.431.066)
190.775.088
31 December 2014
31 December 2013
Payables from main operations
Other payables
Deferred income and expense accruals (Note 10)
Taxes and funds payable and other similar obligations
Total
302.045.983
47.561.333
45.447.065
27.386.135
422.440.516
327.033.095
56.534.780
39.363.495
27.491.024
450.422.394
Short-term liabilities
Long-term liabilities
Total
422.440.516
-422.440.516
450.422.394
-450.422.394
Deferred commission expenses at the beginning of the period
Commissions accrued during the period
Commissions expensed during the period (*)
Deferred commission expenses at the end of the period
(*)
Commission expense are included as a reinsurance commissions.
Individual pension funds
None.
18 Investment contract liabilities
None
19 Trade and other payables and deferred income
As at 31 December 2014, other payables amounting to TL 47.561.333 (31 December 2013: TL 56.534.780) consist of treatment
cost payables to SSI amounting to TL 16.375.984 (31 December 2013: TL 25.801.332), payables to Tarsim and DASK and
outsourced benefits and services amounting to TL 28.268.772 (31 December 2013: TL 27.696.412) and deposits and guarantees
received amounting to TL 2.916.577 (31 December 2013: TL 3.037.036).
Payables arising from main operations of the Company as at 31 December 2014 and 31 December 2013 are as follows:
31 December 2014
31 December 2013
Payables to reinsurance companies (Note 10)
Payables to agencies, brokers and intermediaries
Total payables arising from insurance operations
188.610.275
30.052.668
218.662.943
230.767.903
29.888.503
260.656.406
Payables arising from other operating activities
Cash deposited by insurance and reinsurance companies (Note 10)
76.105.907
7.277.133
302.045.983
63.270.783
3.105.906
327.033.095
Corporate tax liabilities and prepaid taxes are disclosed below:
Corporate tax liabilities
Taxes paid during the period
Corporate tax assets, net
31 December 2014
31 December 2013
22.930.452
(21.081.960)
1.848.492
9.659.923
-9.659.923
Total amount of investment incentives which will be benefited in current and forthcoming periods
None.
20 Financial liabilities
The Company has no financial liabilities as at 31 December 2014 (31 December 2013: None).
21 Deferred tax
As at 31 December 2014 and 31 December 2013, deferred tax assets and liabilities are attributable to the following:
Deferred tax effect of current period tax losses (Note 2.18)
Other provisions
Equalization provision
Reserve for unexpired risks
Provisions for employee termination benefits and unused vacations
Provision for subrogation receivables
Difference in depreciation methods on tangible and intangible
assets between tax regulations and the Reporting Standards
Discount of receivables and payables
Valuation differences in financial assets
Subrogation receivables from third parties
Deferred tax assets, net
31 December 2014
Deferred tax
assets /(liabilities)
31 December 2013
Deferred tax
-3.588.669
8.907.829
8.075.869
2.812.254
1.535.413
732.945
2.944.113
6.299.668
2.623.675
2.581.526
1.895.016
(2.192.013)
(88.941)
(1.547.916)
(965.401)
20.125.763
As at 31 December 2014 The company has not deductible tax losses. (31 December 2013: 9.302.276 TL).
Expiration date
(1.224.897)
115.797
827.566
(603.708)
16.191.701
31 December 2014
31 December 2013
----
-3.664.725
3.664.725
Movement of deferred tax assets table:
31 December 2014
31 December 2013
Opening balance at 1 January
Recognised in profit or loss (Note 35)
Recognised in equity (Note 15)
Deferred tax asset
16.191.701
7.396.097
(3.462.035)
20.125.763
24.604.121
(11.654.589)
3.242.169
16.191.701
31 December 2016
31 December 2017
Total
22 Retirement benefit obligations
The participants or beneficiaries of pension funds are required to be transferred Social Security Institution according to
“Amendments to the Social Security and General Health Insurance Act Including Certain Laws and Decrees” numbered 5754
which was published in the Official Gazette dated 8 May 2008 and numbered 26870. Transfer will be completed within a period
of 3 years and prescribes the extension period of the transfer as maximum of two years upon the order of the Cabinet. The related
three-year transfer period has been prolonged for two years by the Cabinet decision, which was published on the Official Gazette
dated 9 April 2011. Accordingly, the three-year period expired on 8 May 2011 was extended to the 8 May 2013. In accordance
with the Act, as of the transfer date, present value of the liabilities will be determined by considering the income and expense of
the pension fund. Technical deficit rate of 9.8% shall be used in the actuarial calculation of the value in cash, and uncovered other
rights and compensations of participants or beneficiaries of pension funds should be covered by the entities that transfer the
funds.
Up to date, as per the actuarial calculation performed, there has not been any deficit in Anadolu Anonim Türk Sigorta Şirketi
Memurları Emekli Sandığı (Pension Fund of Anadolu Anonim Türk Sigorta Şirketi), which has been founded in accordance with
the Article 20 of the Social Securities Act No: 506 and the Company has made no payment for this purpose. It is believed that
the assets of this institution are adequate enough to cover its total obligations; therefore this shall not constitute any additional
liability on the Company.
Phrases of 2 years which expression in “ Amendments Social Insurance and General Health Insurance Law Amending the Law”
numbered 28227 which was published in the Official Gazette dated 8 March 2012 and numbered 506 law which has relevant
terms was changed to 4 years Banks, insurance and reinsurance companies, chambers of commerce, industry chambers,
exchanges which take part scope of Law 506, No: 20 or the crate which established for constituted staff association are included
in this Law to transferred Social Security Administration in the publication of this article within three years from the date. Three
year period may be extended by a maximum two years via The Council of Ministers . As of the date of transfer, pension fund
contributors are insured scope of this Law Article 4 (a).With this amendment, the authority postpone the transfer of the funds are
given The Council of Ministers modified 4 years. (8 May 2011 to 8 May 2015) In this context, the Council of Ministers postpone
transfer of the funds one more year with the decision of The Council of Ministers dated 24 February 2014 No. 2014/6042.
23 Other liabilities and provisions
As at 31 December 2014 and 31 December 2013; the details of the provisions for other risks are as follows:
Provision for employee termination benefits
Provision for unused vacation pay liability
Total provision for other risks
Provision for agency award
Provision for guarantee account
Provision for employee bonus
Expense provision for gauge commission (Not 10)
Provision for tax assessment (Not 42, (Not 47)
Prepaid income and expense accruals
31 December 2014
31 December 2013
12.628.115
1.433.153
14.061.268
11.720.142
1.187.490
12.907.632
31 December 2014
31 December 2013
3.356.650
7.182.519
7.000.000
1.576.728
15.489.301
34.605.198
4.300.000
6.180.307
6.000.000
915.265
7.615.549
25.011.121
Movements of provision for employee termination benefits during the period are presented below:
Provision at the beginning of the period
Interest cost (Note 47)
Service cost (Note 47)
Payments made during the period (Note 47)
Actuarial difference (Note 47)
Provision at the end of the period
31 December 2014
31 December 2013
11.720.142
1.196.136
930.599
(436.838)
(781.924)
12.628.115
9.856.211
757.050
936.206
(586.852)
757.527
11.720.142
24 Net insurance premium
Net insurance premium revenue is presented in detailed in the accompanying consolidated statement of income.
25 Fee revenue
None.
26 Investment income
Investment income is presented in “Note 4.2 - Financial Risk Management.
27 Net income accrual on financial assets
Net realized gains on financial assets are presented in “Note 4.2 - Financial Risk Management.
28 Assets held at fair value through profit or loss
Presented in “Note 4.2 - Financial Risk Management”.
29 Insurance rights and claims
Claims paid, net off reinsurers’ share
Changes in reserve for unearned premiums, net off reinsurers’ share
Changes in provision for outstanding claims, net off reinsurers’ share
Change in equalization provisions
Changes in reserve for unexpired risks, net off reinsurers’ share
Total
31 December 2014
31 December 2013
1.412.362.272
62.089.748
325.716.789
15.970.036
27.260.973
1.843.399.818
1.146.966.155
232.405.987
199.120.849
12.422.591
9.020.850
1.599.936.432
30 Investment contract benefits
None.
31 Other expenses
The allocation of the expenses with respect to their nature or function is presented in Note 32 - Expenses by nature below.
32 Operating expenses
The operating expenses are disclosed as follows:
Commission expenses (Note 17)
Commissions to intermediaries accrued during the period (Note 17)
Change in deferred commission expenses (Note 17)
Employee benefit expenses (Note 33)
Commission income from reinsurers (Note 10)
Commission income from reinsurers accrued during the period (Note 10)
Change in deferred commission income (Note 10)
Administration expenses
Advertising and marketing expenses
Outsourced benefits and services
Total
31 December 2014
31 December 2013
385.141.391
390.315.759
(5.174.368)
104.693.751
(58.617.320)
(60.026.011)
1.408.691
69.230.043
13.987.613
8.250.751
522.686.229
357.431.066
392.156.692
(34.725.626)
95.467.768
(72.496.752)
(76.879.895)
4.383.143
69.800.405
10.695.100
1.936.519
462.834.106
33 Employee benefits expenses
Wages and salaries
Employer’s share
Other
Total
31 December 2014
31 December 2013
76.090.749
15.758.608
12.844.394
104.693.751
67.586.147
13.983.364
13.898.257
95.467.768
34 Financial costs
Finance costs of the period are presented in “Note 4.2 - Financial Risk Management” above. There are no finance costs classified
in production costs or capitalized on tangible assets. All financial costs are directly recognised as expense in the unconsolidated
statement of income.
35 Income tax
Income tax expense in the accompanying unconsolidated financial statements is as follows:
Current tax expense provision:
Corporate tax provision
Deferred taxes:
Origination and reversal of temporary differences
Total income tax expense recognised in profit or loss
31 December 2014
31 December 2013
(21.081.960)
--
7.396.097
(13.685.863)
(11.654.589)
(11.654.589)
A reconciliation of tax expense applicable to profit from operating activities before income tax at the statutory income tax rate to
income tax expense at the Company’s effective income tax rate is as follows:
Profit before tax
Taxes on income per statutory tax rate
Tax exempt income
Non deductible expenses
Total tax income recognized in profit or loss
31 December 2014
85.245.809
Tax rate (%)
17.049.162
20,00
(4.041.796)
(4,74)
678.497
0,80
13.685.863
16,05
31 December 2013
79.116.513
Tax rate (%)
15.823.303
20,00
(4.940.572)
(6,24)
771.858
0,98
11.654.589
14,73
36 Net foreign exchange gains
Net foreign exchange gains are presented in “Note 4.2 - Financial Risk Management” above.
37 Earnings per share
Earnings per share are calculated by dividing net profit of the period to the weighted average number of shares.
Net profit /(loss) for the period
Weighted average number of shares
Earnings /(loss) per share (TL)
38 Dividends per share
31 December
2014
31 December
2013
71.559.946
50.000.000.000
0,00143
67.461.924
50.000.000.000
0,00135
The company did not perform profit distribution in years of 2013 and 2014.
39 Cash generated from operations
The cash flows from operating activities are presented in the accompanying consolidated statement of cash flows.
40 Convertible bonds
None.
41 Redeemable preference shares
None.
42 Risks
In the normal course of its operations, the Company is exposed to legal disputes, claims and challenges, which mainly stem from
its insurance operations. The necessary income/expense accruals for the revocable cases against/on behalf of the Company are
provided under provision for outstanding claims in the accompanying consolidated financial statements.
As at 31 December 2014, total amount of the claims that the Company face is TL 1.040.392.000 in gross (31 December 2013: TL
726.988.000). The Company provided provision for outstanding claims in the consolidated financial statements by considering
collateral amounts.
As at 31 December 2014, ongoing law suits prosecuted by the Company against the third parties amounting TL 194.259.000
(31 December 2013: TL 206.337.000).
Anadolu Anonim Türk Sigorta Şirketi Mensupları Dayanışma Vakfı” was established by Anadolu Anonim Türk Sigorta Şirketi
in accordance with the Turkish Commercial and Civil Laws which is examined by Tax Audit Committee inspectors due to the
Company payments what are fulfilled obligations to the foundation owing to deed of the foundation and the related act. As a
result of this investigation, an examination was reported for periods of 2007, 2008, 2009, 2010 and 2011.
Legal process has been initiated related to 2007 and 2008, also as of the report date there are cases against/on behalf of us
and also for the against result cases the case has been moved to a higher court. In addition, some part of the payment orders
submitted to us for the following periods are subjected to litigation and for the other part of the cases compromise were made to
relevant parties.
As of the report date the Company made a payment of TL 3.801.378 for tax assessments, also due to a precautionary condition
the company has made a provision to the amount of TL 15.489.301 (31 December 2013: 7.615.549).
As a result of investigation conducted by the Ministry of Finance Tax Audit Board, tax penalty which is amount of TL 2.1 million
(actual tax), and TL 3.1 million tax penalty is announced by reason to tax salvage operations not subject to the banking and
insurance transactions tax. The Company does not make any provision for this tax penalty because of thinking that the Company’s
operations are in line with the local regulations.
43 Commitments
The details of the guarantees that are given by the Company for the operations in non-life branches are presented in Note 17.
The future aggregate minimum lease payments under operating leases for properties rented for use of head office and regional offices
and motor vehicles rented for sales and marketing departments are as follows:
Within one year
Between one to five years
Total of minimum lease payments
31 December 2014
7.517.871
3.476.491
10.994.362
31 December 2013
5.871.892
7.725.700
13.597.592
44 Business combinations
None.
45 Related party transactions
The ultimate controlling party of the Company is İş Bankası Group and the groups having direct control over İş Bankası Group
and the affiliates and associates of İş Bankası Group are defined as related parties of the Company.
The related party balances as of 31 December 2014 and 31 December 2013 are as follows:
31 December 2014
31 December 2013
İş Bankası - cash at banks
Türkiye Sınai ve Kalkınma Bankası - cash at banks
Banks
533.547.278
-533.547.278
678.467.430
13.055
678.480.485
Bonds issued by İş Bankası (Note 11)
Bonds issued by Is GYO (Not 11)
Bonds issued by Is Leasing (Not 11)
Investment funds founded by İş Bankası (Note 11)
Investment funds founded by İş Portföy Yönetimi A.Ş. (Note 11)
Investment funds founded by İşbank GmbH (Note 11)
Financial assets
-14.713.703
5.078.714
15.972.195
139.593.991
12.320.065
187.678.668
122.028.890
--13.588.728
71.694.305
9.115.192
216.427.115
91.802.800
76.454.603
İş Bankası - receivables stem from premiums written via the Bank
Receivables stems from premiums written via Şişecam Sigorta Aracılık
Hiz. A.Ş.
Trakya Cam Sanayii A.Ş.
Milli Reasürans T.A.Ş. - receivables from reinsurance operations
Anadolu Hayat Emeklilik A.Ş. - premium receivables
2.924.252
167.971
1.416
490.293
95.386.732
5.743.294
21.600
644
4.650
82.224.791
Milli Reasürans T.A.Ş.- payables from reinsurance operations
İş Bankası - commission payables
Şişecam Sigorta Aracılık Hizmetleri A.Ş. - commission payables
11.953.520
7.082.553
23.437
19.059.510
20.215.519
5.900.234
365.739
26.481.492
No guarantees have been taken against receivables from related parties.
There are no doubtful receivables from shareholders, subsidiaries and joint ventures.
No guarantees, commitments, guarantee letters, advances and endorsements given in favour of shareholders, associates and
subsidiaries.
The Company accrued TL 57.835.977 premium (31 December 2013: 50.126.169 TL) for related party policies. The transactions
with related parties during the year ended 31 December 2014 and 2013 are as follows:
31 December 2014
31 December 2013
İş Bankası - premiums written via the Bank
Premiums written via Şişecam Sigorta Aracılık Hizmetleri A.Ş.
İş Finansal Leasing- premiums written
Premiums written via TSKB
Premiums written
328.891.626
41.316.107
17.077.324
101.511
387.386.568
261.701.058
38.432.938
14.231.789
952.525
315.318.310
Milli Reasürans T.A.Ş
Premiums written, ceded
(93.328.833)
(93.328.833)
(79.445.393)
(79.445.393)
55.732.060
9.488.742
11.500
560.304
11.828.210
77.620.816
36.922.222
---3.797.714
40.719.936
(33.650.040)
(8.674.189)
(3.240.935)
-21.497.125
(24.068.039)
(24.613.912)
(7.353.671)
(2.744.249)
(75.589)
18.214.159
(16.573.262)
(3.250.000)
-(2.837.238)
-(632.924)
(6.720.162)
(3.271.539)
(371.750)
(1.480.031)
(4.883.609)
(475.950)
(10.482.879)
İş Bankası - interest income from deposits
İş Portföy Yönetimi - income from investment funds
İş Yatırım Menkul Değerler - income from investment funds
İş Gayrimenkul Yatırım Ortaklığı - income from bonds
İş Bankası - income from bonds
Investment income
Türkiye İş Bankası A.Ş - commission expense
Şişecam Sigorta Aracılık Hizmetleri A.Ş. - commission expense
İş Leasing - commission expense
TSKB - commission expense
Milli Reasürans T.A.Ş- commission expense
Operating expenses, net
İş Bankası - banking service fee
İş Bankası - rent expense
İş Merkezleri Yönetim ve İşletim A.Ş. - building service cost
İş Gayrimenkul Yatırım Ortaklığı A.Ş. - rent expense
İş Portföy Yönetimi - management commission
Other expenses
46 Events after the reporting date
Subsequent events are disclosed in Note 1.10 Events after the reporting date.
47 Others
Items and amounts classified under the “other” account in financial statements either exceeding 20% of the total amount of the
group to which they relate or 5% of the total assets in the balance sheet
They are presented in the related notes above.
“Payables to employees and receivables from employees presented under accounts, “other receivables” and “other short or long
term payables”, and which have balance more than 1% of the total assets
None.
Subrogation recorded in “Off-Balance Sheet Accounts”
None.
Real rights on immovable and their values
None.
Explanatory note for the amounts and nature of previous years’ income and losses
None.
For the years ended 31 December 2014 and 2013, details of discount and provision expenses are as follows:
Provision expenses
Other provision income /(expense)
Provision expense for unused vacation (Note 23)
Provision expense for employee termination benefits (Note 23)
Provision expense for doubtful receivables (Note4.2)
Tax assessment expense (Not 23)
Total
Rediscount expenses
Rediscount income
Rediscount expense
Total of rediscounts
31 December 2014
31 December 2013
1.071.425
(245.663)
(1.689.897)
(11.622.773)
(7.873.752)
(20.360.660)
908.822
(338.452)
(1.106.404)
(15.741.368)
(7.615.549)
(23.892.951)
31 December 2014
31 December 2013
12.636.796
(15.997.077)
(3.360.281)
12.842.993
(10.489.059)
2.353.934
31 December 2014 Consolidated Financial Statements Together with
Other Matters and Financial Statements / Information on Consolidated Subsidiaries
Information on Consolidated Subsidiaries
Offering service in private pension and life insurance segments, Anadolu Hayat Emeklilik was founded in 1990 as “Turkey’s first
life insurance company”. The first and only publicly-traded pension company in Turkey, Anadolu Hayat Emeklilik is the largest
company in the sector in terms of total funds attained in life insurance and private pension branches, while preserving its top
spot with the number of participants achieved in the Private Pension System.
A subsidiary of İşbank, Anadolu Hayat Emeklilik’s shares are quoted on the Borsa Istanbul (BIST) National Market under the
symbol (ANHYT)
Headquartered in İstanbul, Anadolu Hayat Emeklilik brings its products to its customers via regional offices in İstanbul (2),
Ankara, Adana, Antalya, Bursa, Trabzon and İzmir a branch in the Turkish Republic of Northern Cyprus, direct sales force, and
nearly 300 agencies.
Anadolu Hayat Emeklilik possesses the most extensive bank insurance network in Turkey. The Company uses the branches of
İşbank, Anadolubank, HSBC, TSKB, BankPozitif and Albaraka Türk Participation Bank as fundamental element of its service
delivery.
Controlling a 11% share of the market with a premium production of TL 365 million in the life insurance branch, Anadolu Hayat
Emeklilik retained its leadership by a large margin with total life insurance funds in excess of TL 1.8 billion.
According to the Pension Monitoring Center (PMC) data dated 2 January 2015, Anadolu Hayat Emeklilik achieved 18% increase
in the number of participants and in total funds in the twelve months to year-end 2014. Having reached TL 7,399 million in total
funds and 863,978 people in the number of participants, Anadolu Hayat Emeklilik is the sector’s leader with respective market
shares of 20% and 17% in total funds including state contributions and number of participants.
Total unconsolidated assets of Anadolu Hayat Emeklilik were up 28% year-to-year and reached TL 10,154 million at year-end
2014.
Posting TL 97.7 million in net profit, the company successfully completed yet another year in terms of sustainable profitability
Other Matters and Financial Statements / 31 December 2014 Consolidated Financial Statements Together with Independent Auditors’ Report Thereon
31 December 2014 Consolidated Financial Statements Together With
Convenience Translation of the Independent Auditors’ Report Originally Prepared and Issued in Turkish (See Note 2.1.1)
Akis Bağımsız Denetim ve Serbest
Muhasebeci Mali Müşavirlik A.Ş.
Kavacık Rüzgarlı Bahçe Mah.
Kavak Sok. No: 3
Beykoz 34805 İstanbul
Telephone +90 (216) 681 90 00
Fax
+90 (216) 681 90 90
İnternet
www.kpmg.com.tr
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of Anadolu Anonim Türk Sigorta Şirketi
Introduction
We have audited the accompanying consolidated balance sheet of Anadolu Anonim Türk Sigorta Şirketi (“the Company”) as at 31
December 2014 and the related consolidated statement of income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance
with the accounting principles and standards, in force as per the insurance legislation. This responsibility includes: designing,
implementing and maintaining internal systems relevant to the preparation and fair presentation of financial statements that
are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.
Independent Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our
audit in accordance with audit standards in force as per the insurance legislation. Those standards require that we comply with
relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements
are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal systems relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal system. An audit also
includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit
opinion.
Basis for Qualified Opinion
As explained in Note 17, the accompanying consolidated financial statements included a general provision amounting to TL
7.702.761 provided by the Company management considering the circumstances which may arise from any changes in economy
or market conditions recognized as expense in the prior periods. The total amount had been expensed in previous years’ financial
statements.
Consolidated Financial Statements
Qualified Opinion
In our opinion, except for the effect on the consolidated financial statements of the matter described in the basis for qualified
opinion paragraph above, nothing has come to our attention that causes us to believe that the accompanying consolidated
financial statements give a true and fair view of the consolidated financial position of Anadolu Anonim Türk Sigorta Şirketi as
at 31 December 2014, and of its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with the accounting principles and standards (see Note 2) in force as per the insurance legislation.
Report on Other Legal and Regulatory Requirements
1) Pursuant to the fourth paragraph of Article 398 of Turkish Commercial Code (“TCC”) no. 6102; Auditors’ Report on System and
Committee of Early Identification of Risks is presented to the Board of Directors of the Company on 29 January 2015.
2) Pursuant to the fourth paragraph of Article 402 of the TCC; no significant matter has come to our attention that causes us to
believe that the Group’s bookkeeping activities, financial statements and group’s financial statements for the period 1 January 31 December 2014 are not in compliance with TCC and provisions of the Company’s articles of association in relation to financial
reporting.
3) Pursuant to the fourth paragraph of Article 402 of the TCC; the Board of Directors provided us the necessary explanations and
required documents in connection with the audit.
Alper Güvenç, Certified Public Accountant
Partner
29 Ocak 2015
İstanbul, Türkiye
Additional paragraph for convenience translation to English:
As explained in Note 2.1.1, the accompanying consolidated financial statements are not intended to present the financial position
and results of operations of the Company in accordance with the accounting principles and practices generally accepted in
countries and jurisdictions other than Turkey.
We confirm that the consolidated financial statements and related disclosures and footnotes as at 31 December 2014 which were
prepared in accordance with the accounting principles and standards in force as per the regulations of T.C. Başbakanlık Hazine
Müsteşarlığı are in compliance with the “Code Related to the Financial Reporting of Insurance, Reinsurance and Private Pension
Companies” and the financial records of our Company.
İstanbul, 29 January 2015
Musa ÜLKEN
Member of Board of Directors
Fatih GÖREN
Executive Vice President of Finance
Murat TETİK
Accounting Reporting Manager
Taylan MATKAP
Actuary
CONTENTS
CONSOLIDATED BALANCE SHEET
186-190
CONSOLIDATED STATEMENT OF INCOME
191-193
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
194
CONSOLIDATED STATEMENT OF CASH FLOWS
196
CONSOLIDATED STATEMENT OF PROFIT DISTRIBUTION
197
NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS
198-260
NOTE 1 General Information
198
NOTE 3 Critical accounting estimates and judgments in applying accounting policies
217
NOTE 2 NOTE 4 NOTE 5 NOTE 6 NOTE 7 NOTE 8 NOTE 9 NOTE 10 NOTE 12 NOTE 13 NOTE 14 NOTE 15 NOTE 16 NOTE 17 NOTE 18 NOTE 19 NOTE 20 NOTE 21 NOTE 22 NOTE 23 NOTE 24 NOTE 25 Summary of significant accounting policies Management of insurance and financial risk
Segment reporting
Tangible assets
Investments in associate
Intangible assets
Investments in associates
Reinsurance assets and liabilities
Loans and receivables
Derivative financial instruments
Equity
Other reserves and equity component of DPF
Insurance contract liabilities and reinsurance assets
Investment contract liabilities
Trade and other payables and deferred income
Financial liabilities
Deferred tax
Retirement benefit obligations
Other liabilities and provisions
Net insurance premium
Fee revenue
200
218
231
234
235
236
236
237
242
243
244
245
247
247
252
252
253
253
254
255
255
255
NOTE 26 Investment income
255
NOTE 28 Assets held at fair value through profit or loss
255
NOTE 27 NOTE 29 NOTE 30 NOTE 31 NOTE 32 NOTE 33 NOTE 34 NOTE 35 NOTE 36 NOTE 37
NOTE 38 NOTE 39 NOTE 40 NOTE 41 NOTE 42 NOTE 43 NOTE 44 NOTE 45 NOTE 46 NOTE 47 Net income accrual on financial assets
Insurance rights and claims
Investment contract benefits
Other expenses
Operating expenses
Employee benefits expenses
Financial costs
Income tax
Net foreign exchange gains
Earnings per share
Dividends per share
Cash generated from operations
Convertible bonds
Redeemable preference shares
Risks
Commitments
Business combinations
Related party transactions
Events after the reporting date
Others
255
256
256
256
256
256
256
257
257
257
257
257
257
257
258
258
258
259
260
260
Consolidated Balance Sheet
ASSETS
I- Current Assets
A- Cash and Cash Equivalents
1- Cash
2- Cheques Received
3- Banks
4- Cheques Given and Payment Orders
5- Bank Guaranteed Credit Card Receivables with Maturities Less Than Three Months
6- Other Cash and Cash Equivalents
B- Financial Assets and Financial Investments with Risks on Policyholders
1- Available-for-Sale Financial Assets
2- Held to Maturity Investments
3- Financial Assets Held for Trading
4- Loans and Receivables
5- Provision for Loans and Receivables
6- Financial Investments with Risks on Saving Life Policyholders
7- Company’s Own Equity Shares
8-Provision in Value of Financial Investments
C- Receivables from Main Operations
5- Cash Deposited to Insurance and Reinsurance Companies
8- Receivables from Individual Pension Operations
D- Due from Related Parties
E- Other Receivables
F- Prepaid Expenses and Income Accruals
1- Prepaid Expenses
2- Accrued Interest and Rent Income
3- Income Accruals
4- Other Prepaid Expenses
G- Other Current Assets
1- Stocks to be Used in the Following Months
4- Job Advances
5- Advances Given to Personnel
7- Other Miscellaneous Current Assets
8- Provision for Other Current Assets
I- Total Current Assets
Note
14
14
14
14
14
11
11
11
11
11
12
12
2.21,12
12
12
12
12
12
12
17
10,12
19
12
12
12
Audited Current Period
31 December 2014
1.606.048.714
37.347
-1.356.733.446
(171.519)
249.449.440
-644.067.957
442.140.789
73.670.047
134.054.733
----(5.797.612)
797.454.113
751.368.850
(7.677.067)
47.022.365
-6.739.965
---113.380.507
(113.380.507)
----------3.595.183
--358.718
3.236.465
---208.618.353
205.884.923
-2.733.430
-3.956.342
212.258
1.848.492
-165.103
4.631
-1.725.858
-3.263.740.662
Audited Prior Period
31 December 2013
1.153.712.216
49.256
-901.838.577
(1.025.984)
252.850.367
-631.008.746
456.674.161
94.501.549
85.630.648
----(5.797.612)
773.925.226
736.197.976
(9.475.078)
42.073.701
-5.128.627
---102.829.158
(102.829.158)
72.324
----72.324
----2.968.734
--394.512
2.574.222
---197.767.110
196.680.406
-1.086.704
-11.284.255
888.774
9.659.923
-39.175
35.897
-660.486
-2.770.738.611
ASSETS
II- Non-Current Assets
A- Receivables from Main Operations
5- Cash Deposited for Insurance and Reinsurance Companies
8- Receivables from Individual Pension Business
B- Due from Related Parties
C- Other Receivables
D- Financial Assets
1- Investments in Equity Shares
2- Investments in Associates
3- Capital Commitments to Associates
4- Investments in Subsidiaries
5- Capital Commitments to Subsidiaries
6- Investments in Joint Ventures
7- Capital Commitments to Joint Ventures
8- Financial Assets and Financial Investments with Risks on Policyholders
9- Other Financial Assets
10- Impairment in Value of Financial Assets
E- Tangible Assets
1- Investment Properties
2- Impairment for Investment Properties
3- Owner Occupied Property
4- Machinery and Equipments
5- Furniture and Fixtures
6- Motor Vehicles
7- Other Tangible Assets (Including Leasehold Improvements)
8- Tangible Assets Acquired Through Finance Leases
9- Accumulated Depreciation
10- Advances Paid for Tangible Assets (Including Construction in Progress)
F- Intangible Assets
1- Rights
2- Goodwill
3- Pre-operating Expenses
4- Research and Development Costs
5- Other Intangible Assets
6- Accumulated Amortization
7- Advances Paid for Intangible Assets
G- Prepaid Expenses and Income Accruals
1- Prepaid Expenses
2- Income Accruals
3- Other Prepaid Expenses and Income Accruals
H- Other Non-Current Assets
1- Effective Foreign Currency Accounts
2- Foreign Currency Accounts
3- Stocks to be Used in the Following Years
6- Other Miscellaneous Non-Current Assets
7- Amortization on Other Non-Current Assets
8- Provision for Other Non-Current Assets
II- Total Non-Current Assets
TOTAL ASSETS
Note
9
9
6
6,7
6
6
6
6
6
6
6
8
8
8
8
8
17
17
21
21
Audited
Current Period
31 December 2014
-----------------------------123.261.711
-123.261.711
--------32.307.481
6.982.776
-6.788.733
34.554.018
11.775.416
1.362.223
19.401.127
4.166.354
(52.723.166)
-62.254.841
-16.250.000
--88.079.901
(43.804.438)
1.729.378
3.562.038
3.562.038
--20.125.763
----20.125.763
---241.511.834
3.505.252.496
Audited
Prior Period
31 December 2013
-----------------------------108.028.666
-108.028.666
--------34.793.176
6.982.776
-6.520.974
32.800.391
11.331.085
1.285.983
18.262.277
4.166.354
(46.556.664)
-62.812.033
-16.250.000
--54.879.873
(27.614.154)
19.296.314
34.671
34.671
--16.191.701
----16.191.701
---221.860.247
2.992.598.858
LIABILITIES
III- Short-Term Liabilities
4- Current Portion of Long Term Debts
5- Principal Instalments and Interests on Bonds Issued
5- Payables Arising from Other Main Operations
6- Discount on Payables from Other Main Operations
5- Due to Personnel
D- Other Payables
E- Insurance Technical Provisions
F- Provisions for Taxes and Other Similar Obligations
1- Taxes and Funds Payable
2- Social Security Premiums Payable
4- Other Taxes and Similar Payables
5- Corporate Tax Payable
6- Prepaid Taxes and Other Liabilities Regarding Current Period Income
7- Provisions for Other Taxes and Similar Liabilities
3- Provisions for Costs
H- Deferred Income and Expense Accruals
1- Deferred Income
2- Expense Accruals
I- Other Short-Term Liabilities
3- Other Various Short-Term Liabilities
III - Total Short-Term Liabilities
Note
19
19
10,19
19
19
17
17
2.26,17
17
19
35
19
23
23
23
Audited
Current Period
31 December 2014
---------302.045.983
218.662.943
-7.277.133
-76.105.907
--------47.561.333
2.916.577
16.625.234
28.268.772
(249.250)
2.214.197.954
1.159.630.507
40.379.346
-1.014.188.101
--27.386.135
25.121.485
2.264.650
--21.081.960
(21.081.960)
-----80.052.263
45.447.065
34.605.198
-1.433.153
--1.433.153
2.672.676.821
Audited
Prior Period
31 December 2013
---------327.033.095
260.656.406
-3.105.906
-63.270.783
--------56.534.780
3.037.036
26.428.955
27.696.412
(627.623)
1.799.130.444
1.097.540.759
13.118.373
-688.471.312
--27.491.024
25.772.003
1.719.021
---------64.374.616
39.363.495
25.011.121
-1.187.490
--1.187.490
2.275.751.449
LIABILITIES
Audited
Current Period
31 December 2014
Audited
Prior Period
31 December 2013
--
--
--
--
4- Bonds Issued
--
--
IV- Long-Term Liabilities
Note
--
--
--
--
-----
--
--
--
---
---
--
--
5- Payables Arising from Other Operations
--
--
----
6- Discount on Payables from Other Operations
--
--
--
---
---
--
--
5- Due to Personnel
--
--
----
D- Other Payables
--
--
--
---
---
E-Insurance Technical Provisions
17
--
68.252.637
52.282.601
---
---
F-Other Liabilities and Relevant Accruals
1- Other Liabilities
3- Other Liabilities and Expense Accruals
-17
--
--
--
---
--
----
68.252.637
52.282.601
--
--
--
--
---
--
--
--
--
23
12.628.115
11.720.142
23
12.628.115
11.720.142
--
--
H-Deferred Income and Expense Accruals
--
1- Deferred Income
2- Expense Accruals
--
--
--
I- Other Long-Term Liabilities
--
--
--
2- Other Long-Term Liabilities
---
--
64.002.743
IV- Total Long-Term Liabilities
80.880.752
--
--
EQUITY
V- Equity
A- Paid in Capital
1- (Nominal) Capital
2- Unpaid Capital
3- Positive Capital Restatement Differences
4- Negative Capital Restatement Differences
5- Register in Progress Capital
B- Capital Reserves
1- Share Premiums
2- Cancellation Profits of Equity Shares
3- Profit on Asset Sales That Will Be Transferred to Capital
4- Currency Translation Adjustments
5- Other Capital Reserves
C- Profit Reserves
1- Legal Reserves
2- Statutory Reserves
3- Extraordinary Reserves
4- Special Funds
6- Other Profit Reserves
D- Retained Earnings
1- Retained Earnings
E- Accumulated Losses
1- Accumulated Losses
F-Net Profit/(Loss) for the Period
2- Net Loss for the Period
3- Profit not Available for Distribution
V- Total Equity
TOTAL EQUITY AND LIABILITIES
Note
2.13,15
15
15
15
15
15
15
15
15
Audited
Audited
Current Period
Prior Period
31 December 2014 31 December 2013
500.000.000
500.000.000
500.000.000
500.000.000
--------8.809.304
8.161.541
--------8.809.304
8.161.541
154.907.376
127.158.918
46.999.839
45.293.051
7.710.040
7.161.457
20.962.756
19.723.583
--35.200.299
11.454.747
44.034.442
43.526.080
13.386.141
-13.386.141
--(48.878.904)
-(48.878.904)
74.592.102
66.403.111
73.197.477
65.755.348
--1.394.625
647.763
751.694.923
652.844.666
3.505.252.496
2.992.598.858
Consolidated Statement of Income
I-TECHNICAL SECTION
1.1.3- Premiums Transferred to Social Security Institutions
1.2- Change in Reserve for Unearned Premiums (Net of Reinsurer Shares and Less the Amounts
Carried Forward)
1.2.3 - Reserve for Unearned Premiums, Social Security Institution Share
1.3- Change in Reserve for Unexpired Risks (Net of Reinsurer Share and Less the Amounts Carried
Forward)
2- Investment Income - Transferred from Non-Technical Section
3.1- Other Technical Income, gross
3.2- Other Technical Income, ceded
B - Non-Life Technical Expense
Carried Forward)
Carried Forward)
Forward)
Forward)
5.2 - Change in Mathematical Provisions, ceded
6- Change in Other Technical Provisions (Net of Reinsurer and Less the Amounts Carried Forward)
6.1- Change in Other Technical Provisions, gross
6.2- Change in Other Technical Provisions, ceded
C- Net Technical Income-Non-Life (A - B)
D- Life Technical Income
1.2- Change in Reserve for Unearned Premiums (Net of Reinsurer Share and Less the Amounts
Carried Forward)
1.3- Change in Reserve for Unexpired Risks (Net of Reinsurer Share and Less the Amounts Carried
Forward)
2- Investment Income
3- Unrealized Gains on Investments
4.1- Other Technical Income. gross
4.2- Other Technical Income. Ceded
5- Accrued Salvage Income
Note
17
17
10,17
17,29
17
17
29
17
17,29
17
10,17
17,29
17
17
29
32
2.25
2.25
Audited
Current Period
31 December 2014
2.441.216.789
2.235.759.340
2.325.110.061
3.004.830.066
(605.617.965)
(74.102.040)
Audited
Prior Period
31 December 2013
1.966.929.968
1.825.789.170
2.067.216.007
2.749.704.405
(618.521.175)
(63.967.223)
(27.260.973)
(30.198.184)
2.937.211
190.509.410
2.788.809
2.788.809
-12.159.230
(2.319.957.258)
(1.738.079.061)
(1.412.362.272)
(1.553.196.954)
140.834.682
(9.020.850)
(12.778.086)
3.757.236
123.220.226
2.924.374
2.924.374
-14.996.198
(1.866.051.751)
(1.346.087.004)
(1.146.966.155)
(1.249.199.210)
102.233.055
----
----
(62.089.748)
(68.928.251)
4.900.846
1.937.657
(325.716.789)
(420.158.951)
94.442.162
(232.405.987)
(318.105.539)
71.144.433
14.555.119
(199.120.849)
(245.037.920)
45.917.071
(15.970.036)
(522.686.229)
(12.422.591)
(462.834.106)
----
----
---(43.221.932)
(43.221.932)
-121.259.531
------
----------
---(44.708.050)
(44.708.050)
-100.878.217
------
----------
I-TECHNICAL SECTION
Note
Audited
Current Period
31 December 2014
Audited
Prior Period
31 December 2013
E- Life Technical Expense
--
--
--
--
Carried Forward)
--
--
Carried Forward)
Forward)
3.1.1- Change in Actuarial Mathematical Provisions, gross
3.1.2- Change in Profit Share Provisions (Provision for Financial Investments with Risks on Saving
Life Policyholders), gross
3.2- Change in Mathematical Provisions, ceded
3.2.1- Change in Actuarial Mathematical Provisions, ceded
3.2.2- Change in Profit Share Provisions (Provision for Financial Investments with Risks on Saving
Life Policyholders). ceded
Forward)
6- Investment Expenses
7- Unrealized Losses on Investments
-------------------
-------------------
8- Investment Income Transferred to the Non-Life Technical Section
F- Net Technical Income- Life (D - E)
--
--
G- Pension Business Technical Income
--
--
--
1- Fund Management Income
--
--
4- Management Expense Charge in case of Suspension
--
--
2- Management Fee
3- Entrance Fee Income
5- Income from Private Service Charges
6- Increase in Value of Capital Allowances Given as Advance
-----
--
-----
7- Other Technical Expense
H- Pension Business Technical Expense
--
--
1- Fund Management Expense
--
2- Decrease in Value of Capital Allowances Given as Advance
---
---
I- Net Technical Income - Pension Business (G - H)
---
--
--
---
--
II-NON-TECHNICAL SECTION
Note
C- Net Technical Income - Non-Life (A-B)
Audited
Current Period
31 December 2014
Audited
Prior Period
31 December 2013
121.259.531
100.878.217
F- Net Technical Income - Life (D-E)
--
--
I - Net Technical Income - Pension Business (G-H)
--
--
121.259.531
100.878.217
J- Total Net Technical Income (C+F+I)
1- Income from Financial Assets
261.960.220
185.154.535
4.2
130.174.857
85.749.368
4.2
59.970.980
52.709.177
2- Income from Disposal of Financial Assets
4.2
5- Income from Associates
4.2
3- Valuation of Financial Assets
6- Income from Subsidiaries and Joint Ventures
7- Income from Property, Plant and Equipment
8- Income from Derivative Transactions
10- Income Transferred from Life Section
4.2
4.2
L- Investment Expense
1- Investment Management Expenses (inc. interest)
2- Diminution in Value of Investments
3- Loss from Disposal of Financial Assets
4- Investment Income Transferred to Non-Life Technical Section
5- Loss from Derivative Transactions
6- Foreign Exchange Losses
7- Amortization Expenses
8- Other Investment Expenses
M- Income and Expenses From Other and Extraordinary Operations
1- Provisions
4.2
4.2
4.2
4.2
4.2
6,8
47
47
5- Deferred Taxation (Deferred Tax Assets)
35
6- Deferred Taxation (Deferred Tax Liabilities)
7- Other Income
8- Other Expenses and Losses
35
9- Prior Year’s Income
10- Prior Year’s Expenses and Losses
2- Corporate Tax Provision and Other Fiscal Liabilities
19.032.156
--
1.815.006
205.678
188.686
35
16.004.372
10.576.449
16.941.187
--
2.848.377
212.931
112.674
--
(187.215.654)
(3.509.979)
(4.677.619)
(136.623)
(7.713.065)
--
--
(13.581.516)
(190.509.410)
(123.220.226)
(23.801.977)
(16.831.812)
(184.509)
(49.954.025)
(99.585)
(28.804.896)
--
(11.736.101)
(32.413.987)
(20.360.660)
(3.360.281)
(23.892.951)
2.353.934
---
7.396.097
--
---
--
--
(11.654.589)
--
--
5.142.413
(553.670)
--
N- Net Profit for the Period
1- Profit for the Period
19.421.434
(275.809.588)
2- Rediscounts
3- Specified Insurance Accounts
31.151.423
3.469.073
(2.689.454)
--
74.592.102
66.403.111
95.674.062
66.403.111
--
--
(21.081.960)
74.592.102
--
66.403.111
Consolidated Statement of Changes in Equity
Notes
I - Balance at the end of the previous year 31 December 2012
III - Restated balances (I+II) - 1 January 2013
1- In cash
2- From reserves
C- Gains or losses that are not included in the
statement of income
I - Dividends paid
II - Balance at the end of the period 31 December 2013
11,15
15
Paid-in Capital
Own Shares of
Revaluation of
the Company Financial Assets
500.000.000
-500.000.000
-----
--------
500.000.000
--
---------
---------
34.628.767
-34.628.767
-----
-(23.174.020)
------11.454.747
Note
I Balance at the end of the previous year 31 December 2013
III - Restated balances (I+II) -1 January 2014
1- In cash
2- From reserves
C- Gains or losses that are not included in the
statement of income
I - Dividends paid
IV - Balance at the end of the period 31 December 2014
11,15
15
Paid-in Capital
Own Shares of
Revaluation of
the Company Financial Assets
500.000.000
-500.000.000
-----
--------
11.454.747
-11.454.747
-----
500.000.000
--
35.200.299
---------
---------
-23.745.552
-------
Other
Reserves and
Retained Net Profit for
Statutory
Earnings
the Year
Reserves
Inflation
Adjustments
Currency
Translation
Adjustments
Legal
Reserves
--------
--------
43.918.190
-43.918.190
-----
--
--
45.293.051
Inflation
Adjustments
Currency
Translation
Adjustments
Legal
Reserves
Statutory
Reserves
--------
--------
45.293.051
-45.293.051
-----
7.161.457
-7.161.457
-----
71.411.204
-71.411.204
-----
--
--
46.999.839
7.710.040
73.806.502
---------
---------
---------
---------
-------1.374.861
-------1.706.788
9.737.625
-9.737.625
-----
72.916.015 (55.790.717)
--72.916.015 (55.790.717)
---------
7.161.457
71.411.204
-------(2.576.168)
-------548.583
(663.966)
------(840.845)
---400.000
-66.403.111
(378.504)
55.769.221
66.403.111
Other
Reserves and
Retained Net Profit for
Earnings
the Year
512.603
------1.882.695
Retained
Earnings
Total
4.848.165
-4.848.165
-----
610.258.045
-610.258.045
-----
(48.878.904)
652.844.666
-------(53.727.069)
(663.966)
(23.174.020)
-400.000
-66.403.111
(378.504)
--
Retained
Earnings
Total
66.403.111 (48.878.904)
--66.403.111 (48.878.904)
---------
652.844.666
-652.844.666
-----
74.592.102
751.694.923
-----74.592.102
-(66.403.111)
-------62.265.045
13.386.141
512.603
23.745.552
---74.592.102
---
Consolidated Statement of Cash Flow
Note
A - CASH FLOWS FROM OPERATING ACTIVITIES
1- Cash provided from insurance activities
2- Cash provided from reinsurance activities
3- Cash provided from individual pension business
4- Cash used in insurance activities
5- Cash used in reinsurance activities
6- Cash used in individual pension business
7- Cash provided by operating activities
8- Interest paid
9- Income taxes paid
12-Net cash provided by operating activities
B - CASH FLOWS FROM INVESTING ACTIVITIES
1- Proceeds from disposal of tangible assets
2- Acquisition of tangible assets
3- Acquisition of financial assets
4- Proceeds from disposal of financial assets
5- Interests received
6- Dividends received
9- Net cash provided by investing activities
C- CASH FLOWS FROM FINANCING ACTIVITIES
1- Equity shares issued
2- Cash provided from loans and borrowings
3- Finance lease payments
4- Dividends paid
7- Net cash used in financing activities
D- EFFECT OF EXCHANGE RATE FLUCTUATIONS ON CASH AND CASH
EQUIVALENTS
E- Net increase in cash and cash equivalents
F- Cash and cash equivalents at the beginning of the year
G- Cash and cash equivalents at the end of the year
19
6, 8
11
14
14
Audited
Audited
Current Period
Prior Period
31 December 2014 31 December 2013
3.153.798.374
--(2.924.054.056)
(6.560.002)
-223.184.316
-(22.930.452)
26.050.558
(37.055.680)
189.248.742
2.854.861.834
6.871.227
-(2.501.075.344)
(1.222.563)
-359.435.154
-980.233
50.333.609
(70.513.485)
340.235.511
-(21.111.793)
(541.175.656)
865.215.792
(142.557.704)
10.000.000
62.448.109
(205.552.139)
27.266.609
1.823.500
(47.756.100)
(714.083.260)
431.437.029
89.565.184
8.000.000
198.407.879
(37.769.638)
(70.375.406)
--------
--------
1.701.066
218.216.417
825.512.807
1.043.729.224
31.224.213
301.084.318
524.428.489
825.512.807
Consolidated Profit Distribution
Note
Audited
Current Period
31 December 2014
Audited
Prior Period
31 December 2013(**)
94.279.437
(21.081.960)
(21.081.960)
--73.197.477
-3.659.874
-69.537.603
-----------------------------------------
66.814.161
----66.814.161
63.981.132
141.651
-2.691.378
---------------269.138
2.422.240
------------------------
I. PROFIT DISTRIBUTION
1.1. CURRENT YEAR PROFIT (*)
1.2. TAX AND FUNDS PAYABLE
1.2.1. Corporate Income Tax (Income Tax)
1.2.2. Income tax deduction
1.2.3. Other taxes and Duties
A NET PROFIT (1.1 - 1.2)
1.3. PREVIOUS PERIOD LOSSES (-)
1.4. FIRST LEGAL RESERVE
1.5. STATUTORY FUND (-)
B NET PROFIT DISTRIBUTION [(A-(1.3 + 1.4 + 1.5)]
1.6. FIRST DIVIDEND TO SHAREHOLDERS (-)
1.7. DIVIDEND TO PERSONNEL (-)
1.9. SECOND DIVIDEND TO SHAREHOLDERS (-)
1.10. SECOND LEGAL RESERVE (-)
1.11. STATUTORY RESERVES (-)
1.12. EXTRAORDINARY RESERVES
1.13. OTHER RESERVES
1.14. SPECIAL FUNDS
II. DISTRIBUTION OF RESERVES
2.1. DISTRIBUTION OF RESERVES
2.2. SECOND LEGAL RESERVES (-)
2.3. COMMON SHARES (-)
2.3.2 Holders of Preferred shares
2.3.4 Holders of Participation Bond
2.3.5 Holders of Profıt and Loss sharing certificate
2.4. DIVIDENDS TO PERSONNEL (-)
III. PROFIT PER SHARE
IV. DIVIDEND PER SHARE
(*)
Capital Markets Board’s no.2014/2 in the Weekly Bulletin “Profit Distribution Statement Preparation Guide” in accordance with the profit distribution are based
on the consolidated profit figure. Profit for the year December 31, 2014, no.5 of the Corporate Tax Law than 75% of their income from investments in associates and
real estate sales pursuant to the shareholders’ equity under “Profit not subject to distribution” account the amount of 1.394.625 TL allocated for follow-up taken into
consideration.
(**)
Profit distribution table has not been filled yet due to profit distribution proposal for the year 2014 has not prepared by the Board of Directors.
(***)
The figures of 2013 is filled with the data which is “According to Legal Records” belongs to the Profit Distribution.
Notes to the Consolidated Financial Statements
1.1 Name of the Company and the ultimate owner of the group
The shareholding structure of Anadolu Anonim Türk Sigorta Şirketi (“the Company”) is presented below. As at 31 December
2014, the shareholder having indirect control over the shares of Anadolu Anonim Türk Sigorta Şirketi (“the Company”) is Türkiye
İş Bankası A.Ş. (“İş Bankası”).
Shareholder
Other
Paid in capital
31 December 2014
Shareholding Shareholding
Amount (TL)
Rate (%)
31 December 2013
Shareholding Shareholding
Amount (TL)
Rate (%)
286.550.106
213.449.894
500.000.000
286.550.106
213.449.894
500.000.000
57,31
42,69
100,00
57,31
42,69
100,00
1.2 Domicile and the legal structure of the Company, country and the address of the registered office (address of the operating
centre if it is different from the registered office)
The Company was registered in Turkey and has the status of ‘Incorporated Company’. The Company moved from “Büyükdere
Caddesi İş Kuleleri Kule 2 Kat: 22-26, 34330 4. Levent, Istanbul to the new address “Rüzgarlıbahçe Mahallesi, Kavak Sokak, No:31
34805 Kavacık/İstanbul and the Company has nine regional offices; two of them established in İstanbul and others established in
Antalya, İzmir, Samsun, Adana, Ankara, Trabzon and Bursa, and a branch in Turkish Republic of Northern Cyprus.
1.3 Business of the Company
The Company operates in almost all non-life insurance branches consisting of mainly accident, health, motor vehicles, air vehicles,
water vehicles, transportation, fire and natural disasters, general loss, credit, financial losses, and legal protection.
As at 31 December 2014, the Company serves through, 2.485 authorized agencies and 91 unathorized agencies (31 December
2013: 2.468 authorized agencies and 83 unathorized agencies) of which, 2.576 agencies (31 December 2013: 2.551 authorized) .
1.4 Description of the main operations of the Company
The Company conducts its operations in accordance with the Insurance Law No.5684 (the “Insurance Law”) issued in 14 June
2007 dated and 26552 numbered Official Gazette and the communiqués and other regulations in force issued by the Turkish
Treasury based on the Insurance Law. The Company operates in insurance branches as mentioned above Note 1.3 Business of the
Company.
The Company’s shares have been listed on the Istanbul Stock Exchange (“ISE”). The company operates in their own specific
laws and regulations for the matters of establishment, auditing, supervision/oversight, accounting and financial reporting in
accordance Capital Market Law No:6362, part of VIII and paragraph of 5 of Article 136.
1.5 The average number of the personnel during the period in consideration of their categories
The average number of the personnel during the period in consideration of their categories is as follows:
Directors
Intermediate directors
Officers
Contracted personnel
Total
31 December 2014
31 December 2013
7
37
3
142
799
988
8
38
3
128
760
937
1.6 Wages and similar benefits provided to the senior management
For the year ended 31 December 2014, wages and similar benefits provided chairman is amounting to TL 1.034.290 TL
(31 December 2013: 948.790 TL), senior management 3.915.203 TL (31 December 2013: 3.918.307 TL).
1.7 Keys used in the distribution of investment income and operating expenses (personnel, administrative, research and
development, marketing and selling, services rendered from third parties and other operating expenses) in the financial
statements
Procedures and principles related to keys used in the financial statements of the companies are determined in accordance with
the 4 January 2008 dated and 2008/1 numbered “Communiqué Related to the Procedures and Principles for the Keys Used in the
Financial Statements Being Prepared In Accordance With Insurance Accounting Plan” issued by the Turkish Treasury.
In accordance with the above mentioned Communiqué, insurance companies are allowed to transfer technical section operating
expense to insurance section through methods determined by Turkish Treasury or by the Company itself. Methods determined by
the Company should be approved by the Turkish Treasury, Known and exactly distinguishable operating expenses are distributed
to related branches directly, while operating expenses are distributed to the sub-branches in accordance with the average of 3
ratios calculated by dividing “number of the policies produced within the last three years”, “gross premium written within the
last three years”, and “number of the claims reported within the last three years” to the “total number of the policies”, “total gross
written premiums” and the “total number of the claims reported”, respectively.
Income from the assets invested against non-life technical provisions is transferred to technical section from non-technical
section; remaining income is transferred to the non-technical section.
1.8 Information on the financial statements as to whether they comprise an individual company or a group of companies
The accompanying financial statements comprise consolidated financial information of the Company and basis of the
consolidation is detailed in note 2.2 - Consolidation.
The Company owns 20% of Anadolu Hayat Emeklilik Anonim Şirketi (“Anadolu Hayat”) and this associate have been consolidated
in the accompanying consolidated financial statements by using the equity method of accounting.
The activities of Anadolu Hayat involve providing individual and group insurance and reinsurance services relating to group
life, individual life, retirement and related personal accident branches, establishing retirement funds, developing internal rules
and regulations related to these funds, carrying out retirement, annual income insurance, portfolio management and custody
contracts for the assets of the funds held in custody.
1.9 Name or other identity information about the reporting entity and the changes in this information after previous reporting
date
Trade name of the Company:
Registered address of the head office:
The web page of the Company:
Rüzgarlıbahçe Mahallesi, Kavak Sokak, No:3134805 Kavacık /İstanbul
Since the end of the previous reporting period, there is not been any change in presented information.
There haven’t been any change at services of the company, recording of this services and company policies after accounting date.
2 Summary of significant accounting policies
2.1 Basis of preparation
2.1.1 Information about the principles and the specific accounting policies used in the preparation of the financial
statements
In accordance with Article 136(5) in Section VIII of the Capital Markets Law, numbered 6362 insurance companies have to
comply with their own specific laws and regulations in matters of establishment, auditing, supervision/oversight, accounting and
financial reporting. Therefore, the Company maintains its books of account and prepares its financial statements in accordance
with the Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”), and other accounting and
financial reporting principles, statements and guidance (collectively “the Reporting Standards”) in accordance with the
“Communiqué Related to the Financial Reporting of Insurance, Reinsurance, and Individual Pension Companies” as promulgated
by the Turkish Treasury based on Article 18 of the Insurance Law and Article 11 of the 4632 numbered Individual Pension
Savings and Investment System Law (‘‘Individual Retirement Law’’).
Although the 4th standard of the Turkish Accounting Standards Board (“TASB”) for the ‘Insurance contracts’ became effective
on 25 March 2006 for the accounting periods that begin on or after 31 December 2005, it is stated that TFRS 4 will not be
implemented at this stage since the second phase of the International Accounting Standards Board project about the insurance
contracts has not been completed yet. In this context, “Communiqué on Technical Reserves for Insurance, Reinsurance and
Individual Pension Companies and the Related Assets That Should Be Invested Against Those Technical Reserves” (“Communiqué
on Technical Reserves”) is published in the Official Gazette dated 7 August 2007, numbered 26606 and became effective on
1 January 2008. Subsequent to the publication of the Communiqué on Technical Reserves, some other circulars and sector
announcements which contain explanations and regulations related to application of the Communiqué on Technical Reserves
are published. Accounting policies applied for the insurance contracts based on these communiqué, circulars and other sector
announcements are summarized on their own captions in the following sections
Accounting for subsidiaries, associates and joint ventures is regulated with 28 December 2007 dated and 2007/26 numbered
“Circular Related to the Accounting of Subsidiaries, Associates and Joint Ventures”, issued by the Turkish Treasury. It is stated
that, the companies will continue to apply the principles of the related standards of TFRSs for the accounting of subsidiaries,
associates and joint venture until the publication of another regulation on this issue by the Turkish Treasury. “Circular Related to
the Preparation of the Consolidated Financial Statements of Insurance, Reinsurance, and Individual Pension Companies” issued
by the Turkish Treasury in the 31 December 2008 dated and 27097 numbered (4th repeat) Official Gazette, constituted the basis
of consolidation to be effective on the dates that circular specifies.
Additional paragraph for convenience translation to English
The differences between accounting principles, as described in the preceding paragraphs, and the accounting principles generally
accepted in countries, in which the accompanying consolidated financial statements are to be distributed, and International
Financial Reporting Standards (“IFRS”), may have significant influence on the accompanying consolidated financial statements.
Accordingly, the accompanying consolidated financial statements are not intended to present the financial position and results of
operations in accordance with the accounting principles.
2.1.2 Other accounting policies appropriate for the understanding of the financial statements
Accounting in hyperinflationary countries
Financial statements of the Turkish entities have been restated for the changes in the general purchasing power of the Turkish
Lira based on “TAS 29 - Financial Reporting in Hyperinflationary Economies” as at 31 December 2004. TAS 29 requires that financial
statements prepared in the currency of a hyperinflationary economy be stated in terms of the measuring unit current at the
reporting date, and that corresponding figures for previous years be restated in the same terms.
With respect to the declaration of the Turkish Treasury with the article dated 4 April 2005 and numbered 19387, financial
statements as of 31 December 2004 are adjusted for the opening balances of 2005 in accordance with the section with respect
to inflation accounting of the Capital Markets Board (“CMB”) Communiqué No: 25 of Series XI, “Communiqué on Accounting
Standards in Capital Market” published in the Official Gazette dated 15 January 2003 and numbered 25290. Inflation accounting
is no longer applied starting from 1 January 2005, in accordance with the same declaration of the Turkish Treasury. Accordingly,
as at 31 December 2014, non-monetary assets and liabilities and items included in shareholders’ equity including paid-in capital
recognized or recorded before 1 January 2005 are measured as restated to 31 December 2004 in order to reflect inflation
adjustments. Non-monetary assets and liabilities and items included in shareholders’ equity including paid-in capital recognized
or recorded after 1 January 2005 are measured at their nominal values.
Other accounting policies
Information regarding other accounting polices is disclosed above in “Note 2.1.1 - Information about the principles and the specific
accounting policies used in the preparation of the financial statements” and each under its own caption in the following sections of
this report.
2.1.3 Valid and presentation currency
The accompanying consolidated financial statements are presented in TL, which is the Company’s functional currency.
2.1.4 Rounding scale of the amounts presented in the financial statements
Financial information presented in TL, has been rounded to the nearest TL values.
2.1.5 Basis of measurement used in the preparation of the financial statements
The accompanying financial statements are prepared on the historical cost basis as adjusted for the effects of inflation that lasted
until 31 December 2004, except for the financial assets at fair value through profit or loss, available-for-sale financial assets and
derivative financial instruments which are measured at their fair values unless reliable measures are available.
2.1.6 Accounting policies, changes in accounting estimates and errors
There is not any change in accounting estimates or determined errors in current year. Critical accounting judgements used in
applying the Company’s accounting policies are explained in Note 3 - Critical accounting estimates and judgments in applying
accounting policies.
2.2 Consolidation
“Circular Related to the Preparation of the Consolidated Financial Statements of Insurance, Reinsurance, and Individual Pension
Companies” issued by the Turkish Treasury in the 31 December 2008 dated and 27097 numbered Official Gazette, has been in
force since 31 March 2009. Accordingly, consolidated financial statements are prepared using the equity method of accounting to
consolidate the Company’s associate; Anadolu Hayat Emeklilik A.Ş.
Accordingly, consolidated financial statements are prepared using the equity method of accounting to consolidate the Company’s
associate; Anadolu Hayat.
2.3 Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components, whose
operating results are reviewed regularly by the Board of Directors (being chief operating decision maker) to make decisions
about resources allocated to each segment and assess its performance, and for which discrete financial information is available.
Since the main economic environment, where the Company operates, is Turkey, a geographical segment reporting has not been
presented. A business segment reporting of the Company is presented in Note 5 in accordance with TFRS 8- Operating Segments
standard.
2.4 Foreign currency transactions
Transactions are recorded in TL, which is the Company’s functional currency. Transactions in foreign currencies are recorded at
the rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated
at exchange rates ruling at the reporting date and foreign currency exchange differences are offset and all exchange differences
are recognized in the statement of income.
Foreign currency exchange differences of unrecognized gains or losses arising from the difference between their fair value and
the discounted values calculated per effective interest rate method of foreign currency available-for-sale financial assets are
recorded in “Revaluation of financial assets” under equity and the realized gain or losses are recognized directly in the statement
of income.
2.5 Tangible assets
Tangible assets of the Company are recorded at their historical costs that have been adjusted for the effects of inflation until the
end of 31 December 2004. There have been no other inflationary adjustments for these tangible assets for the following years and
therefore they have been recorded at their costs restated for the effects of inflation until 31 December 2004. Tangible assets that
have been purchased after 1 January 2005 have been recorded at their costs after deducting any exchange rate differences and
finance expenses.
Gains/losses arising from the disposal of the tangible assets are calculated as the difference between the net carrying value and
the proceeds from the disposal of related tangible assets and reflected to the statement of income of the related period.
Maintenance and repair costs incurred in the ordinary course of the business are recorded as expense.
There are no pledges, mortgages and other encumbrances on tangible fixed assets.
There are no changes in accounting estimates that have significant effect on the current period or that are expected to have
significant effect on the following periods.
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of
tangible assets since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in
the asset.
Depreciation rates and estimated useful lives are as follows:
Tangible Assets
Buildings
Machinery and equipments
Vehicles
Other tangible assets (including leasehold improvements)
2.6 Investment properties
Estimated Useful Lives
(years)
50
3 - 16
4 - 16
5
5 - 10
4 - 10
Depreciation
Rates (%)
2,0
6,3 - 33,3
6,3 - 25,0
20,0
10,0 - 20,0
10,0 - 25,0
Investment properties are held either to earn rentals and/or for capital appreciation or for both.
Investment properties are measured initially at cost including transaction costs.
Subsequent to initial recognition, the Company measured all investment properties based on the cost model in accordance with
the cost model for property and equipment (i.e. at cost less accumulated depreciation and less impairment losses if any).
Investment properties are derecognized when either they have been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or
disposal of an investment property are recognized in profit or loss in the period of retirement or disposal.
2.7 Intangible Assets
The Company’s intangible assets consist of computer software, goodwill and advances paid for tangible assets.
Intangible assets are recorded at cost in compliance with “TAS 38 - Accounting for intangible assets”. The cost of the intangible
assets purchased before 31 December 2004 are restated from the purchasing dates to 31 December 2004, the date the
hyperinflationary period is considered to be ended. The intangible assets purchased after this date are recorded at their historical
costs.
Amortization is charged on a straight-line basis over their estimated useful lives over the cost of the asset.
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net identifiable
assets of the acquired subsidiary/associate at the date of the acquisition. Goodwill on acquisitions of associates is included in
‘investments in associates’ and is tested for impairment as part of the overall balance. Separately recognized goodwill is tested
annually for impairment and carried at cost less accumulated impairment losses, Impairment losses on goodwill are not reversed.
Gain or losses on the disposal of an entity includes the carrying amount of goodwill relating to the entity disposed of.
For the purpose of impairment testing, goodwill is allocated to cash-generating units. The allocations made to those cashgenerating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arises.
The Company has acquired the health portfolio of Anadolu Hayat Emeklilik A.Ş. at 31 August 2004 with all of its rights and
liabilities. The value at acquisition of the portfolio amounting to TL 16.250.000 is capitalized as goodwill by the Company.
2.8 Financial assets
A financial asset is any asset that is cash, an equity instrument of another entity, a contractual right to receive cash or another
financial asset from another entity; or to exchange financial assets or financial liabilities with another entity under conditions
that are potentially favourable to the entity.
Financial assets are classified in four categories; as financial assets held for trading, available-for-sale financial assets, held to
maturity financial assets, and loans and receivables.
Financial assets at fair value through profit or loss are presented as financial assets held for trading in the accompanying financial
statements and trading securities and derivatives are included in this category. Financial assets at fair value through profit or
loss measured at their fair values and gain/loss arising due to changes in the fair values of related financial assets is recorded
in profit /loss. Interest income earned on trading purpose financial assets and the difference between their fair values and
acquisition costs are recorded as interest income in the statement of income. In case of disposal of such financial assets before
their maturities, the gains/losses on such disposal are recorded under trading income/losses. Accounting policies of derivatives
are detailed in note 2.10 - Derivative financial instruments.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They arise when the Company provides money, goods or services directly to a debtor with no intention of trading
the receivable. Loans and receivables those are not interest earning are measured by discounting of future cash flows less
impairment losses, and interest earning loans and receivables are measured at amortized cost less impairment losses.
Held to maturity financial assets are the financial assets with fixed maturities and fixed or pre-determined payment schedules that
the Company has the intent and ability to hold until maturity, excluding loans and receivables. Subsequent to initial recognition,
held to maturity financial assets and loans and receivables are measured at amortized cost using effective interest rate method
less impairment losses, if any. The Company has no financial assets that are not allowed to be classified as held to maturity
financial assets for two years due to the tainting rules applied for the breach of classification rules.
Available-for-sale financial assets are the financial assets other than assets held for trading purposes, held-to-maturity financial
assets and loans and receivables.
Available-for-sale financial assets are initially recorded at cost and subsequently measured at their fair values. Unrecognized
gains or losses derived from the difference between their fair value and the discounted values calculated per effective interest
rate method are recorded in “Revaluation of financial assets” under shareholders’ equity. Upon disposal, the realized gain or
losses are recognized directly in the statement of income.
The determination of fair values of financial instruments not traded in an active market is determined by using valuation
techniques. Observable market prices of the quoted financial instruments which are similar in terms of interest, maturity and
other conditions are used in determining the fair value.
The Company has accounted equity shares classified as available-for-sale according to quoted market prices or dealer
price quotations for financial instruments traded in active markets or according to cost less impairment losses for financial
instruments not traded in active markets.
Securities are recognized and derecognized at the date of settlement.
Associates; Anadolu Hayat has been consolidated in the accompanying consolidated financial statements by using the equity
method of accounting.
A financial asset is derecognized when the control over the contractual rights that comprise that asset is lost. This occurs when
the rights are realized, expire or are surrendered.
2.9 Impairment on assets
Impairment on financial asset
Financial assets or group of financial assets are reviewed at each reporting date to determine whether there is objective evidence
of impairment. If any such indication exists, the Company estimates the amount of impairment. A financial asset is impaired
if, and only if, there is objective evidence that the expected future cash flows of financial asset or group of financial assets are
adversely affected by an event(s) (“loss event(s)”) incurred subsequent to recognition. The losses expected to incur due to future
events are not recognized even if the probability of loss is high.
Loans and receivables are presented net of specific allowances for uncollectibility. Specific allowances are made against the
carrying amounts of loans and receivables that are identified as being impaired based on regular reviews of outstanding balances
to reduce these loans and receivable to their recoverable amounts.
The recoverable amount of an equity instrument is its fair value. The recoverable amount of debt instruments and purchased
loans measured to fair value is calculated as the present value of the expected future cash flows discounted at the current market
rate of interest.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognized. For financial assets measured at amortized cost and available-for-sale financial assets that are debt securities, the
reversal is recognized in the statement of operations. For available-for-sale financial assets that are equity securities, the reversal
is recognized directly in equity.
Impairment on tangible and intangible assets
On each reporting date, the Company evaluates whether there is an indication of impairment of tangible and intangible assets.
If there is an objective evidence of impairment, the asset’s recoverable amount is estimated in accordance with the “TAS 36 Impairment of Assets” and if the recoverable amount is less than the carrying value of the related asset, a provision for impairment
loss is made.
Rediscount and provision expenses of the period are detailed in Note 47.
2.10 Derivative financial instruments
As of the reporting date, the Company does not have any derivative financial instruments. Derivative instruments are treated as
held for trading financial assets in compliance with the standard TAS 39 - Financial Instruments: Recognition and measurement.
Derivative financial instruments are initially recognized at their fair value.
The receivables and liabilities arising from the derivative transactions are recognized under the off-balance sheet accounts
through the contract amounts.
Derivative financial instruments are subsequently remeasured at fair value and positive fair value differences are presented
either as “financial assets held for trading” and negative fair value differences are presented as “other financial liabilities” in the
accompanying financial statements. All unrealized gains and losses on these instruments are included in the statement of income.
2.11 Offsetting of financial assets
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company
has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability
simultaneously.
Income and expenses are presented on a net basis only when permitted by the Reporting Standards, or for gains and losses
arising from a group of transactions resulting from the Company’s similar activities like trading transactions.
2.12 Cash and cash equivalents
Cash and cash equivalents, which is the basis for the preparation of the statement of cash flows includes cash on hand, cheques
received, other cash and cash equivalents, demand deposits and time deposits at banks having an original maturity less than 3
months which are ready to be used by the Company or not blocked for any other purpose.
2.13 Share capital
The shareholder having direct or indirect control over the shares of the Company is İş Bankası Group, As at 31 December 2014
and 31 December 2013, the share capital and ownership structure of the Company are as follows:
Name
Other
Paid in Capital
31 December 2014
Shareholding
Shareholding
Amount (TL)
Rate (%)
286.550.106
213.449.894
500.000.000
57,31
42,69
100,00
31 December 2013
Shareholding
Shareholding
Amount (TL)
Rate (%)
286.550.106
213.449.894
500.000.000
57,31
42,69
100,00
Sources of capital increases during the period
The company has not performed capital increase as at 31 December 2014 . (31 December 2013: None).
Privileges on common shares representing share capital
As at 31 December 2014, the issued share capital of the Company is TL 500.000.000 (31 December 2013: 500.000.000 TL).
the share capital of the Company consists of 50,000,000,000 (31 December 2013: 50,000,000,000 shares) issued shares with TL
0.01 nominal value each. The share capital is represented by 150 Group A shares of TL 0,01 each.
Registered capital system in the Company
The Company has accepted the registered capital system. As of 31 December 2014, the Company’s registered capital is TL
700.000.000 (31 December 2013: 700.000.000 TL).
Repurchased own shares by the Company
None.
2.14 Insurance and investments contracts - classification
An insurance contract is a contract under which the Company accepts significant insurance risk from another party (the
policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely
affects the policyholder. Insurance risk covers all risk except for financial risks. All premiums have been received within the
coverage of insurance contracts recognized as revenue under the account caption “written premiums”.
Investment contracts are those contracts which transfer financial risk with no significant insurance risk. Financial risk is the risk
of a possible future change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index
of prices or rates, credit rating or credit index or other variable, provided, that it is not specific to a party to the contract, in the
case of a non-financial variable.
As at the reporting date, the Company does not have a contract which is classified as an investment contract
2.15 Insurance contracts and investment contracts with discretionary participation feature
Discretionary participation feature (“DPF”) within insurance contracts and investment contracts is the right to have following
benefits in addition to the guaranteed benefits.
(i) that are likely to comprise a significant portion of the total contractual benefits;
(ii) whose amount or timing is contractually at the discretion of the Issuer; and
(iii) that are contractually based on:
(1) the performance of a specified pool of contracts or a specified type of contract;
(2) realized and/or unrealized investments returns on a specified pool of assets held by the Issuer; or
(3) the profit or loss of the Company, Fund or other entity that issues the contract.
As at the reporting date, the Company does not have any insurance or investment contracts that contain a DPF.
2.16 Investment contracts without DPF
As at the reporting date, the Company does not have any insurance contracts and investment contracts without DPF.
2.17 Liabilities
Financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another entity.
Financial liabilities of the Company are measured at their discounted values. A financial liability is derecognized when it is
extinguished.
2.18 Income taxes
Corporate tax
Statutory income is subject to corporate tax at 20%. This rate is applied to accounting income modified for certain exemptions
(like dividend income) and deductions (like investment incentives), and additions for certain non-tax deductible expenses and
allowances for tax purposes. If there is no dividend distribution planned, no further tax charges are made.
Dividends paid to the resident institutions and the institutions working through local offices or representatives are not subject
to withholding tax. The withholding tax rate on the dividend payments other than the ones paid to the non-resident institutions
generating income in Turkey through their operations or permanent representatives and the resident institutions is 15%. In
applying the withholding tax rates on dividend payments to the non-resident institutions and the individuals, the withholding tax
rates covered in the related Double Tax Treaty Agreements are taken into account. Appropriation of retained earnings to capital is
not considered as profit distribution and therefore is not subject to withholding tax.
Prepaid taxes are calculated and paid at the rates valid for the earnings of the related years. The payments can be deducted from
the annual corporate tax calculated for the whole year earnings.
In accordance with the tax legislation, tax losses can be carried forward to offset against future taxable income for up to five
years. As at 31 December 2014 The Company has not deductible tax losses. (31 December 2013: 3.664.725 TL).
In Turkey, there is no procedure for a final and definite agreement on tax assessments. Companies file their tax returns with their
tax offices by the end of 25th of the fourth month following the close of the accounting period to which they relate. Tax returns are
open for five years from the beginning of the year that follows the date of filing during which time the tax authorities have the
right to audit tax returns, and the related accounting records on which they are based, and may issue re-assessments based on
their findings.
Deferred taxes
In accordance with TAS 12 - Income taxes, deferred tax assets and liabilities are recognized on all taxable temporary differences
arising between the carrying values of assets and liabilities in the financial statements and their corresponding balances
considered in the calculation of the tax base, except for the differences not deductible for tax purposes and initial recognition of
assets and liabilities which affect neither accounting nor taxable profit.
Deferred tax assets and liabilities are reported as net in the financial statements if, and only if, the Company has a legally
enforceable right to offset current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity.
In case where gains/losses resulting from the subsequent measurement of the assets are recognized in the statement of income,
then the related current and/or deferred tax effects are also recognized in the statement of income. On the other hand, if such
gains/losses are recognized as an item under equity, then the related current and/or deferred tax effects are also recognized
directly in the equity.
Transfer pricing
In Turkey, the transfer pricing provisions have been stated under the Article 13 of Corporate Tax Law with the heading of
“disguised profit distribution via transfer pricing”. The General Communiqué on disguised profit distribution via Transfer Pricing,
dated 18 November 2007 sets details about implementation.
If a taxpayer enters into transactions regarding sale or purchase of goods and services with related parties, where the prices are
not set in accordance with arm’s length principle, then related profits are considered to be distributed in a disguised manner
through transfer pricing. Such disguised profit distributions through transfer pricing are not accepted as tax deductible for
corporate income tax purposes.
2.19 Employee benefits
Pension and other post-retirement obligations
A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee and his/her dependants will
receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.
Employees of the Company are the members of “Anadolu Anonim Türk Sigorta Şirketi Memurları Emekli Sandığı (“Anadolu
Anonim Pension Fund”) which is established in accordance with the temporary Article 20 of the Social Security Act No: 506.
As per the temporary sub article No: 20 of the Article 73 of the Social Security Law, pension funds should be transferred to the
Social Security Institution within three years after the publication of the a aforementioned Law published in the Official Gazette
numbered 26870 and dated 8 May 2008. The related three-year transfer period has been prolonged for two years by the Cabinet
decision, which was published on the Official Gazette dated 9 April 2011. Accordingly, the three-year period expired on 8 May
2011 was extended to the 8 May 2014. The principles and applications of the transfer will be determined by the Decree of the
Council of Ministers separately.
On the other hand, the application made on 19 June 2008 by the Republican People’s Party to the Constitutional Court for the
annulment and motion for stay of some articles, including the first paragraph of the provisional article 20 of the Law, which
covers provisions on transfers, was rejected in accordance with the decision taken at the meeting of the afore-mentioned court on
30 March 2011.
The cash value of the obligations of the pension fund for each member of the fund including members left the fund as of the
transfer date will be calculated according to following assumptions:
a) Technical deficit rate of 9,8% shall be used in the actuarial calculation of the value in cash, and
b) Gains and losses of the funds stems from benefits covered by the aforementioned Law taken into accounts to calculate present
value of the obligations.
Employee termination benefits
In accordance with existing Turkish Labour Law, the Company is required to make lump-sum termination indemnities to each
employee who has completed one year of service with the Company and whose employment is terminated due to retirement
or for reasons other than resignation or misconduct. The computation of the liability is based upon the retirement pay ceiling
announced by the Government. The applicable ceiling amount as at 31 December 2014 is TL 3.438 (31 December 2013: 3.254 TL) .
In Accordance IAS 19 which published by KGK dated March 12,2013 is about “Benefits Employee Accounting Standard” and
defined by beginning from December 31,2012 net defined benefit liability of the actuarial gains and losses arising on remeasurement should be recognized in other comprehensive income under shareholders’ equity and this effect should be applied
retrospectively. The company started to account current actuarial gains and losses under equity (other profit reserves) due to the
fact that prior period actuarial gains and losses have remained below the materiality
The amended TAS 19 “Employee Benefits” is effective for annual periods beginning on or after 1 January 2013, with earlier
application permitted. With very few exceptions retrospective application is required. Numerous changes or clarifications are
made under the amended standard. Among there numerous amendments, the most important changes are removing the corridor
mechanism and making the distinction between short-term and other long-term employee benefits based on expected timing of
settlement rather than employee entitlement. The company, couldn’t recognized previous years actuarial gains and losses under
the equity due to the related amount is under the materiality but the current year actuarial gains and losses is recognized at the
other reserves in equity.
The Company accounted for employee severance indemnities using actuarial method in compliance with the TAS 19 - Employee
Benefits, The major actuarial assumptions used in the calculation of the total liability as at 31 December 2014 and 31 December
2013 are as follows:
Discount rate
Expected rate of salary/limit increase
Estimated employee turnover rate
31 December 2014
%4,46
%4,37
%6,29
31 December 2013
%3,61
%6,37
%7,11
Expected rate of salary/limit increase above was determined according to the government’s annual inflation forecasts.
Other benefits
The Company has provided for undiscounted short-term employee benefits earned during the period as per services rendered in
compliance with TAS 19 in the accompanying financial statements.
2.20 Provisions
A provision is made for an existing obligation resulting from past events if it is probable that the commitment will be settled
and a reliable estimate can be made of the amount of the obligation. Provisions are calculated based on the best estimates of
management on the expenses to incur as of the reporting date and, if material, such expenses are discounted to their present
values. If the amount is not reliably estimated and there is no probability of cash outflow from the Company to settle the liability,
the related liability is considered as “contingent” and disclosed in the notes to the financial statements.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are
not recognized in financial statements since this may result in the recognition of income that may never be realized. Contingent
assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has
become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognized in
the financial statements of the period in which the change occurs. If an inflow of economic benefits has become probable, the
Company discloses the contingent asset.
2.21 Revenue recognition
Written premiums and claims paid
Written premiums represent premiums on policies written during the period net of taxes, premiums of the cancelled policies
which were produced in prior periods and premium ceded to reinsurance companies. Premiums ceded to reinsurance companies
are accounted as “written premiums, ceded” in the statement of income.
Claims are recognized as expense as they are paid. Outstanding claims provision is provided for both reported unpaid claims at
period-end and incurred but not reported claims. Reinsurer’s shares of claims paid and outstanding claims provisions are off-set
against these reserves.
Subrogation, salvage and quasi income
According to the Circular 2010/13 dated 20 September 2010; the Company may account for income accrual for subrogation
receivables without any voucher after the completion of the claim payments made to the insure. If the amount cannot be collected
from the counterparty insurance company, the Company provides provision for uncollected amounts due for six months. If the
counter party is not an insurance Company, the provision is provided after four months. As at the reporting date, in accordance
with the related circular the Company provided TL 26.118.178 (31 December 2013: 25.286.057 TL) subrogation receivables
and recorded 30.648.790 TL (31 December 2013: 29.179.630 TL) (Note 12) net subrogation and salvage receivables under
receivables from main operations. The Company provided allowance for uncollected subrogation receivables amounting to TL
7.677.067 (31 December 2013: 9.475.078 TL) (Note 12) in accordance with circular.
For the year ended 31 December 2014 and 2013, salvage and subrogation collected are as follows:
Motor Vehicles
Transportation
Water Vehicles
Accident
General Losses
General Responsibility
Air Vehicles
Credit
Legal Protection
Health
Total
31 December 2014
255.938.892
4.894.794
2.556.620
1.951.328
1.087.073
452.519
248.943
129.658
16.861
2.410
(22.011)
-267.257.087
31 December 2013
198.341.171
5.275.881
2.002.200
1.647.652
751.675
548.899
85.598
22.584
-355.772
22.461
21.104
209.074.997
As at 31 December 2014 and 31 December 2013, accrued subrogation and salvage income per branches is as follows:
Motor Vehicles
Water Vehicles
Transportation
General Losses
Accident
Total
31 December 2014
29.805.959
213.733
34.052
397.028
181.347
16.671
-30.648.790
31 December 2013
27.506.620
1.450.379
-146.400
64.907
10.291
1.033
29.179.630
Commission income and expense
As further disclosed in Note 2.24 - Reserve for unearned premiums, commissions paid to the agencies related to the production of
the insurance policies and the commissions received from the reinsurance firms related to the premiums ceded are recognized
over the life of the contract by deferring commission income and expenses within the calculation of reserve for unearned
premiums for the policies produced before
1 January 2008 and recognizing deferred commission income and deferred commission expense in the financial statements for
the policies produced after 1 January 2008.
Interest income and expense
Interest income and expense are recognized using the effective interest method. The effective interest rate is the rate that exactly
discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where
appropriate, a shorter period) to the carrying amount of the financial asset or liability. The effective interest rate is established on
initial recognition of the financial asset and liability and is not revised subsequently.
The calculation of the effective interest rate includes all fees and points paid or received transaction costs, and discounts
or premiums that are an integral part of the effective interest rate. Transaction costs are incremental costs that are directly
attributable to the acquisition, issue or disposal of a financial asset or liability.
Trading income/expense
Trading income/expense includes gains and losses arising from disposals of financial assets held for trading purpose and
available-for-sale financial assets. Trading income and trading expenses are recognized as “Income from disposal of financial
assets” and “Loss from disposal of financial assets” in the accompanying consolidated financial statements.
Dividends
Dividend income is recognized when the Company’s right to receive payment is ascertained.
2.22 Leasing transactions
The maximum period of the lease contracts is 10 years. Tangible assets acquired by way of finance leases are recorded in tangible
assets and the obligations under finance leases arising from the lease contracts are presented under “Finance Lease Payables”
account in the financial statements. In the determination of the related asset and liability amounts, the lower of the fair value of
the leased asset and the present value of leasing payments is considered. Financial costs on leasing agreements are expanded in
lease periods at a fixed interest rate.
If there is impairment in the value of the assets obtained through finance lease and in the expected future benefits, the leased
assets are measured at net realizable value. Depreciation for assets obtained through financial lease is calculated in the same
manner as tangible assets.
Payments made under operating leases are recognized in the statement of income on a straight-line basis over the term of the
lease.
2.23 Dividend distribution
Based on the guidelines and principals issued by the CMB dated 27 January 2010 for the distribution of dividends from the profit
generated from operating activities in 2009, concerning public entities, the shares of which are quoted in public equity markets,
it has been agreed upon not to set a mandatory minimum dividend payment quota. Furthermore, it has been agreed upon to let
public entities perform dividend distributions as stated within the principal agreement of the companies and as stated within the
policies on dividend distribution that have been shared with the public.
Additionally, as stated within the aforementioned decision of CMB, for entities required to prepare consolidated financial
statements, it has been agreed upon to require the net distributed profit calculations to be performed on the net profit for the
period as stated on the consolidated financial statements, so long that the distribution can be funded through statutory resources.
The Company did not perform dividend distribution in 2013 and 2014.
2.24 Reserve for unearned premiums
In accordance with the “Communiqué on Technical Reserves for Insurance, Reinsurance and Pension Companies and the Related
Assets That Should Be Invested Against Those Technical Reserves” (“Communiqué on Technical Reserves”) which was issued
in 26606 numbered and 7 August 2007 dated Official Gazette and put into effect starting from 1 January 2008, the reserve for
unearned premiums represents the proportions of the gross premiums written without deductions of commission or any other
allowance, in a period that relate to the period of risk subsequent to the reporting date for all short-term insurance policies. For
commodity transportation policies with indefinite expiration dates, 50% of the remaining portion of the premiums accrued in the
last three months, less any commissions is also provided as unearned premium reserves.
Reserve for unearned premiums is calculated for all insurance contracts except for the contracts for which the mathematical
reserve is provided. Reserve for unearned premiums is also calculated for the annual premiums of the annually renewed long
term insurance contracts.
Since the Communiqué on Technical Reserves was effective from 1 January 2008, the Turkish Treasury issued 4 July 2007
dated and 2007/3 numbered “Circular to Assure the Compliance of the Technical Reserves of Insurance, Reinsurance and
Pension Companies With the Insurance Law No,5684” (“Compliance Circular”) to regulate the technical provisions between the
issuance date and enactment date of the Communiqué on Technical Reserves. In accordance with the Compliance Circular, it is
stated that companies should consider earthquake premiums written after 14 June 2007 in the calculation of the reserve for
unearned premiums while earthquake premiums were deducted in the calculation of the reserve for unearned premiums before.
Accordingly, the Company has started to calculate reserve for unearned premiums for the earthquake premiums written after 14
June 2007, while the Company had not calculated reserve for unearned premiums for the earthquake premiums written before
14 June 2007.
According to the 2009/9 Numbered Circular Related to Application of Technical Reserves issued on 27 March 2009 which
published by Undersecretariat of Treasury reserve for unearned premiums is calculated by taking into account that all polices
become active at 12:00 at noon and end at 12:00 at noon..
According to the Communiqué on Technical Reserves, for the calculation of unearned premium reserves of foreign currency
indexed insurance agreements, foreign currency selling exchange rates announced by Turkish Central Bank will be considered,
unless there is a specified exchange rate in the agreement.
As at the reporting date, the Company has provided reserve for unearned premiums amounting to TL 1.491.252.563
(31 December 2013: 1.422.324.312 TL) and reinsurer share in reserve for unearned premiums amounting TL 294.929.264
(31 December 2013: 290.028.419 TL) . Furthermore, reserve for unearned premiums includes Social Security Institution (“SSI”)
share amounting to TL 36.692.792 (31 December 2013: 34.755.134 TL).
2.25 Provision for outstanding claims
Claims are recorded in the year in which they occur, based on reported claims or on the basis of estimates when not reported.
Provision for outstanding claims represents the estimate of the total reported costs of notified claims on an individual case basis
at the reporting date as well as the corresponding handling costs. Incurred but not reported claims (“IBNR”) are also provided.
Claims incurred before the accounting periods but reported subsequent to those dates are considered as incurred but not
reported (“IBNR”) claims.
According to the “Communiqué on Amendments to Communiqué on Technical Reserves for Insurance, Reinsurance and Pension
Companies and the Related Assets That Should Be Invested Against Those Technical Reserves” published in Official Gazette no
27655 dated 28 July 2010 and “Communiqué on Technical Reserves and Circular on Actuarial Chain Ladder Method” dated 20
September 2010 and numbered 2010/12, it is stated that the difference between the result of the actuarial chain ladder method
and reported but not settled (IBNR calculation by ACLM method) is compared to test IBNR claims and greater amount is recorded
to financial statements are accepted as IBNR claims. Requirement on test IBNR calculation is removed per Communiqué on
Amendments to Aforementioned Communiqué is published in Official Gazette no 28356 17 July 2012 dated. It is stated that
amount, content and implementation principals of incurred but not reported claims should be determined according to IBNR
calculation by ACLM method specified by Turkish Treasury or other methods determined by Turkish Treasury.
As at 1 January 2012, 100% of the calculated negative IBNR balances per each insurance branch are taken into calculation in
accordance with the Circular issued by the Turkish Treasury dated 26 December 2011 and numbered 2011/23. Accrued salvage,
subrogation and similar income is taken into calculation with collections in ACLM method.
The Company recorded 100% of the IBNR calculated by ACLM method with additional provision explained below amounting to
TL 327.611.024 (31 December 2013: 193.676.094 TL) to the unconsolidated financial statements as IBNR and TL 17.969.121
(31 December 2013: 7.596.560 TL) as reinsurer’s share of IBNR.
In Accordance with the Circular issued by the Turkish Treasury dated 2010/12 and 2010/16, the Company eliminated severe
damages by using Box-Plot method to make more homogeneous calculation in ACML.
Also, according to Circular Article 7 issued in 2010/12, total number of files contained in the main branch, excluding the health
branch of the total number of files no more than one thousand of damage or major damage under 300 remaining branches can be
done by actuary
According to Treasury Circular 2010/16, the amounts with ACML determined the minimum amount of provision. If Amounts
which are determined the company’s other tools or actuarial studies shows the company’s statu better than methods
recommended by the Treasury, the company reflect amount of provision which provided higher than Treasury to financial
statements. In accordance with these judgments, as a result of actuarial studies, the Company made IBNR provision amounts
to total TL 11.069.337 (31 December 2013: TL 4.831.998) which are TL 858.216 in branch of Health, TL 6.190.791 in branch of
Water Vehicles, TL 2.859.830 in branch of Air Craft Responsibility, TL 1.160.500 in branch of Credit.
In accordance with the “Sector Announcement Related to Updating Past Outstanding Claim Amounts for IBNR Calculation” dated
17 June 2013 and numbered 2013/13 and the Company’s actuary decision starting from 30 June 2014, the Company updated
provision for outstanding claims for general liability branch.
IBNR amounts which obtained results of updates provision for outstanding claims and uncorrected version in the ACLM
triangular series are TL 417.681.075. In accordance with Circular no. 2011/1, the Company corrected updated provision for
outstanding claims backwards to avoid deterioration of the data series in the history of the triangle ACLM. As 31 December 2014,
IBNR figures for obtained this correction is TL 114.990.730. This amount is accounted in the Company’s financials.
ACLM to be used is announced with “Communiqué on Technical Reserves” which is issued by the Turkish Treasury on 20
September 2010, Insurance and reinsurance companies are allowed to use five different methods which are “Standard Chain,
Claim/Premium, Cape Code, Frequency/Volume and Munich Chain Ladder” to make ACLM calculations. The Company’s method
selections for each branch are presented below.
In accordance with the Circular of the Turkish Treasury No: 2013/8 dated 5 April 2013 “Circular on Actuarial Chain Ladder
Method”, according to the Circular numbered 2010/12, the ACLM calculation methods start to be changed at the end of 2013
that can be started as of first quarter of 2013 if minimal fluctuation between the periods is wanted. Accordingly, in Discretionary
Fiscal Responsibility branch, for the purpose of additional IBNR need to be aimed to determine actuarial forecast works by the
Company actuary for compatible with the branch’s ACML calculation method has been changed as of 30 September 2013 and
“Munich Chain” method was disused to “Standard Chain” method was started to carry out. As 30 September 2014, started to use
‘Standard’ instead of Münich Chain’.
Based on each branch, calculation amount of Net IBNR; reinsurance agreements’ effect in force was to be reflected based on
actual reinsurance rate.
Motor vehicles
Water vehicles
Third party liability
Third party liability for air vehicles
Air crafts
Accident
General losses
Financial losses
Health
Transportation
Credit
Legal protection
General liability
31 December 2014
Cape Code
Munich Chain Ladder
Cape Code
31 December 2013
Munich Chain
Munich Chain
Munich Chain
Munich Chain
Munich Chain
In accordance with “Circular Related to Information on Calculation of Incurred But Not Reported Claims Reserve” numbered
2011/23 and dated 26 November 2011, companies may decrease their outstanding claims reserve balances based on the winning
ratio of the sub-branches calculated from the last five years claims. Winning ratio used for decrease in provision for outstanding
claims could not exceed 25% (15% for the new sub-branches which do not have five year data). Based on the aforementioned
regulation, the Company calculated winning ratio from the last five year data set and TL 75.260.122 (31 December 2013:
TL 53.749.627) as IBNR and 9.912.780 TL (31 December 2013: TL 6.764.302) as reinsurer’s share of IBNR is excluded from
outstanding claims reserve balance.
The calculated winning ratio of the Company as at 31 December 2014 is within %0 -%100 (31 December 2013: %0-%35).
Winning ratios used in and amounts decreased from provision for outstanding claims are as follows:
31 December 2014 Branch
Motor vehicles
General losses
Water vehicles
Transportation
Accident
Credit
Legal protection
Total
31 December 2013 Branch
Motor vehicles
Transportation
General losses
Water vehicles
Accident
Legal protection
Total
Winning Ratios
Used
%13
%25
%23
%21
%19
%25
%25
%14
%25
%25
Winning Ratios
Used
%17
%25
%17
%18
%11
%17
%25
%18
%16
Gross Amount
Decreased
Net Amount
Decreased
27.061.833
31.775.165
10.183.292
2.623.152
2.057.461
791.187
431.542
304.698
25.000
6.792
75.260.122
26.173.740
30.362.994
4.417.948
2.533.992
686.961
493.422
362.137
284.356
25.000
6.792
65.347.342
Gross Amount
Decreased
Net Amount
Decreased
27.348.214
15.096.889
6.386.641
2.065.493
361.329
1.153.064
973.319
357.604
7.074
53.749.627
26.167.440
14.288.654
2.789.609
1.977.160
333.118
515.357
569.692
337.221
7.074
46.985.325
New Regulations on Treatment Costs Resulted from Traffic Accidents in Accordance with the Circular Numbered
2011/18 “Circular Related to the Accounting of Payments Related to Payment of Treatment Costs Resulted from
Traffic Accidents and New Accounts in the Insurance Chart of Accounts”
58th and 59th articles and 1st and 2nd provisional articles of the Law no 6111 on “Restructuring of certain receivables and
amendment to the law of social insurance and general health insurance and certain other laws and decree laws” published in the
Official Gazette numbered 27857 and has come into effect on 25 February 2011.
According to the Article 59 of the aforementioned law, starting from 25 February 2011, premiums written under compulsory
motor third party liability insurance contracts providing health assurance will be transferred to SSI by the rate up to 15%
which will be later defined by Turkish Treasury. By this premium transfer, all liabilities related to body injuries resulted from
traffic accidents will be compensated by SSI. According to the Provisional Article 1 and Article 59 of the Law, up to 20% of
the transferred premium amount defined by the Turkish Treasury will also be transferred to SSI and treatment costs resulted
from traffic accidents occurred before 25 February 2011 will also be compensated by SSI. As part of the aforementioned law,
“Communiqué on Payment of Treatment Costs Resulted from Traffic Accidents” which was issued in Official Gazette numbered
28038 and dated 27 August 2011 has become effective. On 17 October 2011, the Turkish Treasury issued circular numbered
2011/18 “Circular Related to the Accounting of Payments Related to Payment of Treatment Costs Resulted from Traffic Accidents
and New Accounts in the Insurance Chart of Accounts”. In accordance with the related circular, the Company eliminated
outstanding claims reserve amounting to TL 2.279.273 related to treatment costs occurred before issuance of the aforementioned
law, with “Paid Claims” account. The same amount is recorded as “Payable to SSI” under “Other Payables” in the accompanying
financial statements
In accordance with the circular numbered 2011/18, the Company recalculated test IBNR amount by excluding treatments costs
covered by the aforementioned law as at 31 March 2011 and eliminated difference between the newly calculated IBNR amount
and IBNR amount in the financial statements amounting to TL 2,375,923 with “Paid Claims” account. The same amount is
recorded as “Payable to SSI” under “Other Payables” in the accompanying financial statements.
The Company is classified total of TL 2.452.947 which includes new calculation difference over premiums written under
compulsory motor third party liability insurance contracts between 25 February 2011 - 26 August 2011 per “Circular Stated
Principals on Implementation Related to Collection of Health Service Fees in Connection with Traffic Accidents” stated by the
Turkish Treasury as “Payable to SSI”.
The Turkish Treasury informed the Company 7.02% for motor third party liability, 2.08% for compulsory personal accident seat
insurance and 15.8% for compulsory transportation liability for traffic accidents occurred before issuance of the aforementioned
law. The difference amounting to TL 1.153.501 (31 December 2013: TL 5.721.687) between the amount informed by the Turkish
Treasury and the amount eliminated by the Company is transferred to “Other Technical Expense” for the year ended 31 December
2014.
2.26 Reserve for unexpired risks
In accordance with the Communiqué on Technical Reserves, while providing reserve for unearned premiums, in each accounting
period, the companies should perform adequacy test covering the preceding 12 months due to the probability that future claims
and compensations of the outstanding policies may be in excess of the reserve for unearned premiums already provided. In
performing this test, it is required to multiply the reserve for unearned premiums, net with the expected claim/premium ratio.
Expected claim/premium ratio is calculated by dividing incurred losses (provision for outstanding claims, net at the end of the
period + claims paid, net - provision for outstanding claims, net at the beginning of the period) to earned premiums (written
premiums, net + reserve for unearned premiums, net at the beginning of the period - reserve for unearned premiums, net at
the end of the period). In the calculation of earned premiums; deferred commission expenses paid to the agencies and deferred
commission income received from the reinsurance firms which were netted off from reserve for unearned premiums both at the
beginning of the period and at the end of the period are not taken into consideration.
In accordance with Treasury circular numbered 2012/15, unexpired risk reserve started to be calculated over main branches as
of December 31, 2013. The test is performed on branch basis and in case where the expected claim/premium ratio is higher than
95%, reserve calculated by multiplying the exceeding portion of the expected claim/premium ratio with the reserve for unearned
premiums of that specific branch is added to the reserves of that branch. Accordingly, as at the reporting date, the Company has
provided net reserve for unexpired risk amounting to TL 52.687.216 (31 December 2013: TL 22.489.032) and unexpired risk
amounting of reassurance to TL 12.307.870 (31 December 2013: TL 9.370.659) in the accompanying unconsolidated financial
statements
As at 31 December 2014, reserve for unexpired risks at the beginning of the period is revised according to calculation method
used in the current period in order to determine consistent claims /premium ratio.
According to the Circular numbered 2011/18, the Company excluded both the premiums transferred to SSI and claims related to
treatment costs from calculation of reserve for unexpired risks in motor third party liability, compulsory transportation financial
liability and compulsory personal accident for bus transportation branches.
2.27 Equalization provision
In accordance with the Communiqué on Technical Reserves put into effect starting from 1 January 2008, the companies should
provide equalization provision in credit insurance and earthquake branches to equalize the fluctuations in future possible claims
and for catastrophic risks. Equalization provision, started to be provided in 2008, is calculated as 12% of net premiums written
in credit insurance and earthquake branches. In the calculation of net premiums, fees paid for un-proportional reinsurance
agreements are considered as premiums ceded to the reinsurance firms. The companies should provide equalization provision up
to reaching 150% of the highest premium amount written in a year within the last five years.
In case where claims incurred, the amounts below exemption limits as stated in the contracts and the share of the reinsurance
firms cannot be deducted from equalization provisions. Claims payments are deducted from first year’s equalization provisions
by first in first out method. Equalization provisions are presented under “other technical reserves” in the accompanying
financial statements. As at the reporting date, the Company provided equalization provision amounting to TL 60.549.876 in the
accompanying consolidated financial statements (31 December 2013: 44.579.840 TL).
Net losses (after reinsurance) resulted from earthquake occurred in Van amounting to TL 7.101.831 (31 December 2013:
7.101.831 TL) are decreased from prior periods’ equalization provision.
2.28 Related parties
Parties are considered related to the Company if;
(a) directly, or indirectly through one or more intermediaries, the party:
•controls, is controlled by, or is under common control with the Company (this includes parent, subsidiaries and fellow
subsidiaries);
•has an interest in the Company that gives it significant influence over the Company; or
•has joint control over the Company;
(b) the party is an associate of the Company;
(c) the party is a joint venture in which the Company is a venturer;
(d) the party is member of the key management personnel of the Company and its parent;
(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled or significantly influenced by, or for which significant voting power in such entity
resides with directly or indirectly, any individual referred to in (d) or
(g) the party is a post-employment benefit plan for the benefit of employees of the Company, or of any entity that is a related
party of the Company.
A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a
price is charged.
A number of transactions are entered into with related parties in the normal course of business.
2.29 Earnings per share
Earnings per share are determined by dividing the net income by the weighted average number of shares outstanding during the
year attributable to the shareholders of the Company. In Turkey, companies can increase their share capital by making a pro-rata
distribution of shares (“Bonus Shares”) to existing shareholders from retained earnings. For the purpose of earnings per share
computations, such bonus shares issued are regarded as issued shares.
Post-balance sheet events that provide additional information about the Company’s position at the reporting dates (adjusting
events) are reflected in the financial statements. Post-balance sheet events that are not adjusting events are disclosed in the notes
when material.
2.31 New standards and interpretations not yet adopted
There are a number of new standards, updates related to the existing standards and interpretations which are not adopted in the
preparation of the accompanying financial statements and have not yet entered into force for the accounting period 31 December
2014. TFRS 9 - Financial instruments, is published by International Accounting Standards Board in November 2009 as a part
of a wider project that aims to bring new regulations to replace TAS 39 - Financial Instruments: Recognition and Measurement
published by the Turkish Accounting Standards Board on Official Gazette dated 27 April 2010 and numbered 27564.
Developing a new standard for the financial reporting of financial assets that is principle-based and less complex is aimed by
this project. The objective of TFRS 9, being the first phase of the project, is to establish principles for the financial reporting of
financial assets that will present relevant and useful information to users of financial statements for their assessment of amounts,
timing and uncertainty of the entity’s future cash flows. With TFRS 9 an entity shall classify financial assets as subsequently
measured at either amortized cost or fair value on the basis of both the entity’s business model for managing the financial assets
and the contractual cash flow characteristic of the financial assets. The guidance in TAS 39 on impairment of financial assets and
hedge accounting continues to apply.
An entity shall apply TFRS 9 for annually years beginning on or after 1 January 2015. An earlier application is permitted. If an
entity adopts this TFRS in its financial statements for a period beginning before 1 January 2013, then prior periods are not
needed to be restated.
3 Critical accounting estimates and judgments in applying accounting policies
The notes given in this section are provided to addition/supplement the commentary on the management of insurance risk note
4.1 - Management of insurance risk and note 4.2 - Financial risk management.
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas at estimation uncertainty and critical judgment in applying accounting policies
that have the most significant effect on the amount recognized in the financial statements are described in the following notes:
Not 4.1 - Management of insurance risk
Not 4.2 - Financial risk management
Not 10 - Reinsurance assets/liabilities
Not 11 - Financial assets
Not 12 - Loans and receivables
Not 17 - Insurance liabilities and reinsurance assets
Not 17 - Deferred acquisition costs
Not 19 - Trade and other payables, deferred income
Not 21 - Deferred income taxes
Not 23 - Provisions for other liabilities and charges
4 Management of insurance and financial risk
4.1 Management of insurance risk
Insurance risk is defined as coverage for exposures that exhibit a possibility of financial loss due to applying inappropriate
and insufficient insurance techniques. Main reasons of insurance risk exposure result from the risk selection and inaccurate
calculation of insurance coverage, policy terms and fee or inaccurate calculation of coverage portion kept within the company and
coverage portion transfers to policyholders and transfer conditions.
Objective of managing risks arising from insurance contracts and policies used to minimize such risks
Potential risks that may be exposed in transactions are managed based on the requirements set out in the Company’s “Risk
Management Policies” issued by the approval of the Board of Directors. The main objective of risk management policies is to
determine the risk measurement, assessment, and control procedures and maintain consistency between the Company’s asset
quality and limitations allowed by the insurance standards together with the Company’s risk tolerance of the accepted risk level
assumed in return for a specific consideration. In this respect, instruments that are related to risk transfer, such as; insurance risk
selection, risk quality follow-up by providing accurate and complete information, effective monitoring of level of claims by using
risk portfolio claim frequency, treaties, facultative reinsurance contracts and coinsurance agreements, and risk management
instruments, such as; risk limitations, are used in achieving the related objective.
Risk tolerance is determined by the Company’s Board of Directors by considering the Company’s long-term strategies, equity
resources, potential returns and economical expectations, and it is presented by risk limitations. Authorization limitations during
policy issuing include authorizations for risk acceptances granted based on geographical regions in relation to unacceptable
special risks or pre-approved acceptable special risks, insurance coverage to agencies, district offices, technical offices, assistant
general managers and top management in the policy issuance period and authorizations for claim payment granted to district
offices, claim management administration, automobile claims administration and Claim Committee established by the managing
director and assistant managing director in the claim payment period.
Whatsoever, risk acceptance is based on technical income expectations under the precautionary principle. In determining
insurance coverage, policy terms and fee, these expectations are based accordingly.
It is essential that all the authorized personnel in charge of executing policy issuance transactions, which is the initial phase of
insurance process, should ensure to gather or provide all the accurate and complete information to issue policies in order to
obtain evidence on the acceptable risks that the Company can tolerate from the related insurance transactions. On the other hand,
decision to be made on risk acceptance will be possible by transferring the coverage to the reinsurers and/or coinsurers and
considering the terms of the insurance policy.
In order to avoid destructive losses over company’s financial structure, company transfers the exceeding portion of risks assumed
over the Company’s risk tolerance and equity resources through treaties, facultative reinsurance contracts and coinsurance
agreements to reinsurance and coinsurance companies. Insurance coverage and policy terms of reinsurance are determined by
assessing the nature of each insurance branch.
Insurance risks do not generally have significant unrecoverable losses in the course of ordinary transactions, except for risks
associated with earthquake and other catastrophic risks. Therefore, there is a high sensitivity to earthquake and catastrophic
risks.
The case of potential claims’ arising from earthquake and other catastrophic risks exceeding the maximum limit of the excess of
loss agreements, such risks are treated as the primary insurance risks and are managed based on the precautionary principle.
Maximum limit of excess of loss agreements is determined based on the worst case scenario on the possibility of an earthquake
that Istanbul might be exposed to in terms of its severity and any potential losses incurred in accordance with the generally
accepted international earthquake models. The total amount of protection for catastrophic risks of the company is identified
taking into the compensation amount for an earthquake will occur in a 1000 years.
The Company’s gross and net insurance risk concentrations (after reinsurance) in terms of insurance branches are summarized
as below:
31 December 2014
General liability
General losses
Motor vehicles
Water vehicles
Transportation
Air crafts
Financial losses
Accident
Health
Credit
Legal protection
Total
536.683.814
(16.321.658)
302.883.129
(35.816.816)
126.898.890
(67.749.236)
68.615.172
(41.639.167)
83.781.790
1.274.635
35.733.940
(18.673.835)
19.805.194
(13.706.887)
28.943.534
(20.172.876)
17.017.918
(15.402.033)
15.096.696
(1.291.762)
4.955.110
(59.627)
1.936.936
(53.446)
759.191
(186.986)
876.450
31
1.243.987.764
(229.799.663)
Net total
claims liability
520.362.156
267.066.313
59.149.654
26.976.005
85.056.425
17.060.105
6.098.307
8.770.658
1.615.885
13.804.934
4.895.483
1.883.490
572.205
876.481
1.014.188.101
31 December 2013
General liability
Motor vehicles
General losses
Air crafts
Water vehicles
Transportation
Accident
Financial losses
Health
Credit
Legal protection
Total
392.957.242
(15.116.022)
145.694.331
(14.833.210)
75.030.329
(31.394.357)
57.404.411
1.789.780
55.319.765
(33.483.122)
24.940.859
(15.814.715)
22.199.757
(8.976.371)
22.053.555
(11.185.251)
16.393.181
(430.548)
7.323.143
(5.559.770)
1.482.083
(312.944)
1.352.782
(18.250)
1.228.470
34.052
448.905
(56.773)
823.828.813
(135.357.501)
Net total
claims liability
377.841.220
130.861.121
43.635.972
59.194.191
21.836.643
9.126.144
13.223.386
10.868.304
15.962.633
1.763.373
1.169.139
1.334.532
1.262.522
392.132
688.471.312
Total claims liability includes outstanding claims reserve (excluding contingent amounts deducted from claims reserve determined by winning probability) and
incurred but not reported claims.
(*)
Gross and net insurance risk concentrations of the insurance contracts (after reinsurance) based on geographical regions are
summarized as below:
31 December 2014
Turkey
Europe
America
Asia
Total
31 December 2014
Marmara Region
Aegean Region
Black Sea Region
Total
945.064.232
1.905.186
156.303
224.723
947.350.444
Net total
claims liability
(221.076.633)
(566.539)
(95.322)
(4.829)
(221.743.323)
723.987.599
1.338.647
60.981
219.894
725.607.121
Net total
claims liability
522.387.693
137.929.862
73.890.193
68.908.939
43.207.867
34.487.066
64.252.612
945.064.232
(121.442.279)
(43.864.250)
(11.987.253)
(10.656.183)
(7.764.575)
(2.878.530)
(22.483.563)
(221.076.633)
400.945.414
94.065.612
61.902.940
58.252.756
35.443.292
31.608.536
41.769.049
723.987.599
(*)
Total claims liability includes estimated compensation amounts for realized claims. Gross incurred but not reported claims amounting to TL 327.611.024TL t
additional provision for outstanding claims per adequacy test amounting to TL 44.286.418 outstanding claims of treaty activities which could not be distributed to
geographical regions and the contingent amounts deducted from claims reserve amounting to TL (75.260.122) are excluded from the table.
31 December 2014
Turkey
Europe
Asia
Africa
Total
Total claims liability
31 December 2013
645.190.292
1.969.039
293.765
190.977
647.644.073
Net total
claims liability
(134.181.200)
(264.418)
(11.963)
(67.662)
(134.525.243)
511.009.092
1.704.621
281.802
123.315
513.118.830
Net total
claims liability
Marmara Region
Aegean Region
Black Sea Region
Total
326.101.895
80.036.803
58.923.420
55.160.378
47.737.283
45.936.845
31.293.668
645.190.292
(84.537.280)
(7.988.570)
(5.953.188)
(6.895.999)
(17.149.331)
(8.833.747)
(2.823.085)
(134.181.200)
241.564.615
72.048.233
52.970.232
48.264.379
30.587.952
37.103.098
28.470.583
511.009.092
(*)
regions and the contingent amounts deducted from claims reserve amounting to TL (53.749.627) are excluded from the table.
Given insurance collateral amounts in respect to branches
Health
Accident
General losses
General liability
Motor vehicles
Transportation
Water vehicles
Air crafts
Legal protection
Total
31 December 2014
31 December 2013
4.283.371.745.693
263.459.916.521
254.952.055.702
35.427.794.810
41.614.148.232
63.746.730.255
40.753.693.279
46.432.952.597
17.529.066.354
1.651.393.745
38.500
5.048.939.535.688
4.511.111.250.942
195.943.025.085
221.876.822.746
33.131.190.355
41.043.206.431
49.463.100.289
31.063.663.602
21.981.060.492
14.968.174.500
979.655.702
-5.121.561.150.144
4.2 Management of financial risk
Introduction and overview
This note presents information about the Company’s exposure to each of the below risks, the Company’s objectives, policies
and processes for measuring and managing risk, and the Company’s management of capital. The Company has exposure to the
following risks from its use of financial instruments:
• credit risk
• liquidity risk
• market risk
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management
framework. Duties and responsibilities of the Risk Management and Internal Control Department include design and
implementation of risk management system and identification and implementation of risk management policies. It is also
responsible for ensuring that the Company implements all necessary risk management techniques. Activities of the Risk
Management and Internal Control Department are managed directly by General Manager. The Board of Directors monitors the
effectiveness of the risk management system through the internal audit department.
Risk management policies and guidelines are set by the Board of Directors and applied by the top management. These policies
include organisation and scope of the risk management function, risk measurement and assessment methods, duties and
responsibilities of the Board of Directors, top management and all of the employees, procedures followed in the case of limit
extension and compulsory approval and confirmation processes for certain situations.
Credit Risk
Credit risk is most simply defined as the potential that a bank borrower or counterparty will fail to meet its obligations in
accordance with agreed terms. The balance sheet items that the Company is exposed to credit risks are as follows:
• Cash at banks
• Other cash and cash equivalents
• Available for sale financial assets (except equity-shares)
• Financial assets held for trading (except equity-shares)
• Held to maturity financial asset
• Premium receivables from policyholders
• Receivables from intermediaries (agencies)
• Receivables from reinsurance companies related to commissions and claims paid
• Reinsurance shares of insurance liability
• Receivables from related parties
• Other receivables
Reinsurance contracts are the most common method to manage insurance risk. This does not, however, discharge the Company’s
liability as the primary insurer. If a reinsurer fails to pay a claim for any reason, the Company remains liable for the payment to
the policyholder. The creditworthiness of reinsurers is considered on an annual basis by reviewing their financial strength prior
to finalization of the reinsurance contract.
Net carrying value of the assets that is exposed to credit risk is shown in the table below.
Cash and cash equivalents (Note 14)
Receivables from main operations (Note 12)
Financial assets (Note 11) (*)
Reinsurer share in provision for outstanding claims (Note 10), (Note 17)
Prepaid taxes and funds (Note 19)
Other receivables (Note 12)
Other prepaid expenses (Note 10)
Other miscellaneous current assets (Not 12)
Due from related parties (Note 12)
Total
(*)
Equity shares amounting to TL 104.126.890 are not included (31 December 2013: 88.786.648 TL).
31 December 2014
31 December 2013
1.606.182.886
797.454.113
539.941.067
229.799.663
1.848.492
3.595.183
2.733.430
1.895.592
-3.183.450.426
1.154.688.944
773.925.226
542.222.098
135.357.501
9.659.923
2.968.734
1.086.704
735.558
72.324
2.620.717.012
As at 31 December 2013 and 31 December 2012, the aging of the receivables from main operations is as follows:
31 December 2014
Gross Amount
Provision
Not past due
Past due 0-30 days
Past due 31-60 days
Past due 61-90 days
More than 90 days (*)
Total (**)
583.917.123
89.759.753
13.190.866
3.147.750
116.737.854
806.753.346
----(113.380.507)
(113.380.507)
31 December 2013
Gross Amount
Provision
565.073.223
77.880.279
12.545.113
4.096.093
116.140.120
775.734.828
----(102.829.158)
(102.829.158)
As per the 3 February 2005 dated and B.02.1.HM.O.SGM.0.3.1/01/05 numbered Circular issued by the Turkish Treasury, in case where subrogation is subject to
claim/legal action, related subrogation amount is recognized as doubtful receivables and allowance for doubtful receivables is provided by the same amount in the
financial statements. Related amounts are presented in “More than 90 days” line in the above table.
(*)
Except for TL 806.753.346 TL (31 December 2013: 775.734.828 TL) presented under receivables from insurance operations in the financial statements, this
amount also includes TL 81.109.551 (31 December 2013: 81.315.004 TL) of untransferred amount collected by intermediaries and TL 30.648.790 (31 December
2013: 29.179.630 TL) of subrogation and salvage receivables. subrogation receivables having past over 4 months for individuals and 6 months for legal entities but not
transferred to legal follow-up amounting to TL 7.677.067 (31 December 2013: 9.475.078 TL) are excluded from the table.
(**)
The movements of the allowances for impairment losses for receivables from main operations during the period are as follows:
Provision for receivables from insurance operations at the beginning of
the period
Collections during the period (Note 47)
Impairment losses provided during the period (Note 47)
Impairment losses provided for subrogation - salvage receivables during
the period (Note 47)
Provision for receivables from insurance operations at the end of
the period
31 December 2014
31 December 2013
102.829.158
(1.071.425)
2.518.673
87.996.612
(908.822)
1.503.704
9.104.101
113.380.507
14.237.664
102.829.158
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet cash commitments associated with
financial instruments.
Management of the liquidity risk
The Company considers the maturity match between asset and liabilities for the purpose of avoiding liquidity risk and ensure
that it will always have sufficient liquidity to meet its liabilities when due.
Maturity distribution of monetary assets and liabilities:
31 December 2014
Financial assets
Payables arising from main
operations
Other liabilities
obligations
Provisions for other risks and
expense accruals
Carrying
amount
Up to 1 month
1 to 3 months
1.606.048.714
563.509.281
960.079.777
4.962.323
2.949.214
644.067.957
797.454.113
16.290.316
29.820.736
3 to 6 months 6 to 12 months
82.459.656
33.595.436
--
Over 1 year
--
Unallocated
--
43.855.877
248.492.451
272.013.141
2.733.430
77.086.258
1.301.584.951
1.483.415
83.346.625
659.835.069
1.250.015
319.130.980
3.055.266.537
--
309.715.708
437.100.952
--
128.065.431
--
256.666.993
272.013.141
1.014.188.101
152.781.804
305.563.607
116.206.094
99.256.001
340.380.595
--
47.561.333
18.251.375
26.393.381
--
--
2.916.577
--
--
371.414.588
302.045.983
27.386.135
47.233.313
1.438.414.865
76.105.908
27.386.135
--
274.525.222
718.715
46.629.462
--
3.356.650
381.943.100
431.465
83.703.672
--
15.759.247
215.669.013
862.929
95.606.941
--
194.862.942
8.174.542
--
---
--
--
--
--
--
28.117.416
--
--
(*)
Provision for outstanding claims is presented as short term liabilities in the accompanying consolidated financial statements whereas maturity distribution is
31 December 2013
Financial assets
Due from related parties
Payables arising from main
operations
Other liabilities
obligations
Provisions for other risks and
expense accruals
Carrying
amount
Up to 1 month
1 to 3 months
1.153.712.216
552.341.090
585.163.978
72.324
12.054
631.008.746
773.925.226
3.234.708
26.458.758
13.800.085
3 to 6 months 6 to 12 months
16.207.148
28.181.861
--
183.184.874
330.243
--
--
315.443.908
78.142.696
656.067
1.312.134
936.264
--
308.660.105
288.235.185
24.108
--
Unallocated
70.723.063
80.117.472
24.108
Over 1 year
12.054
11.985.965
--
---
1.086.704
2.563.039.924
--
659.585.441
--
888.535.490
1.086.704
361.879.993
--
149.208.056
--
320.646.070
183.184.874
688.471.312
105.907.915
211.815.830
80.988.022
68.551.187
221.208.358
--
56.534.780
18.089.629
21.458.198
10.147.654
3.802.264
3.037.035
--
--
254.260.338
--
243.581.084
327.033.095
27.491.024
36.731.263
1.136.261.474
51.873.735
27.491.024
203.362.303
4.506.003
263.749.010
--
--
16.480.307
915.265
355.799.951
6.904.347
--
79.257.798
---
19.335.691
Provision for outstanding claims is presented as short term liabilities in the accompanying consolidated financial statements whereas maturity distribution is
(*)
--
---
--
--
Market risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and credit spreads will affect
the Company’s income or the value of its holdings of financial instruments, The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.
Currency risk
The Company is exposed to currency risk through insurance and reinsurance transactions in foreign currencies.
Foreign exchange gains and losses arising from foreign currency transactions are recorded at transaction dates, at the end of the
periods, foreign currency assets and liabilities evaluated by the Central Bank of the Republic of Turkey’s spot purchase rates and
the differences arising from foreign currency rates are recorded as foreign exchange gain or loss in the statement of income.
The Company’s exposure to foreign currency risk is as follows:
US Dollar
Euro
Other
currencies
Total
Financial assets
170.593.626
-120.322.331
290.915.957
44.519.657
12.320.065
2.232.333
59.072.055
5.389.927
-987.046
6.376.973
220.503.210
12.320.065
123.541.710
356.364.985
91.396.977
111.938.980
203.335.957
24.659.552
9.454.831
34.114.383
691.344
-691.344
116.747.873
121.393.811
238.141.684
87.580.000
24.957.672
5.685.629
118.223.301
US Dollar
Euro
Other
currencies
Total
Financial assets
146.548.975
-119.962.922
266.511.897
40.037.398
9.115.193
3.084.146
52.236.737
1.091.043
-1.036.139
2.127.182
187.677.416
9.115.193
124.083.207
320.875.816
104.016.906
127.927.163
231.944.069
21.350.893
26.396.067
47.746.960
1.666.077
948.835
2.614.912
127.033.876
155.272.065
282.305.941
34.567.828
4.489.777
(487.730)
38.569.875
31 December 2014
31 December 2013
TL equivalents of the related monetary amounts denominated in foreign currencies are presented in the above table.
If technical provision denominated in any currency not specified, ıt is evaluated are evaluated by the Central Bank of the Republic
of Turkey’s spot sales rates as at 31 December 2014 and Foreign currency transactions are recorded at the foreign exchange rates
ruling at the dates of the transactions and foreign currency denominated monetary items are evaluated by the Central Bank of the
Republic of Turkey’s spot purchase rates as at 31 December 2014.
Exposure to currency risk
Foreign currency rates used for the translation of foreign currency denominated assets and liabilities as at 31 December 2014
and 31 December 2013 are as follows:
31 December 2014
31 December 2013
US Dollar
Euro
2,3189
2,1343
2,8207
2,9365
A 10 percent depreciation of the TL against the following currencies as at 31 December 2014 and 31 December 2013 would
have increased or decreased equity and profit or loss (excluding tax effects) by the amounts shown below, This analysis assumes
that all other variables, in particular interest rates, remain constant, In case of a 10 percent appreciation of the TL against the
following currencies, the effect will be in opposite direction.
31 December 2014
Profit or loss
Equity (*)
US Dollar
Euro
Other
Total, net
(*)
8.758.000
2.495.767
568.563
11.822.330
Equity effect also includes profit or loss effect of 10% depreciation of TL against related currencies.
8.758.000
2.495.767
568.563
11.822.330
31 December 2013
Profit or loss
Equity (*)
3.456.783
448.978
(48.773)
3.856.988
3.456.783
448.978
(48.773)
3.856.988
Exposure to interest risk
The principal risk to which non-trading portfolios are exposed is the risk of loss from fluctuations in the future cash flows or
fair values of financial instrument because of a change in market interest rates, Interest rate risk is managed principally through
monitoring interest rate gaps and by having pre-approved limits for repricing bands.
As at reporting date; the interest rate profile of the Company’s interest earning financial assets and interest bearing financial
liabilities are detailed as below:
Financial assets with fixed interest rates:
Financial assets held for trading - reverse repos (Note 11)
Cash at banks (Note 14) (*)
Cash deposited to insurance and reinsurance companies (Note 12)
Financial assets with variable interest rates:
Held to maturity investments - Government bonds (Note 11)
Financial assets held for trading - Government bonds (Note 11)
(*)
Demand deposits amounting to TL 6.208.075 are not included .(31 December 2013: 16.793.473 TL).
31 December
2014
31 December
2013
5.887.281
1.350.525.371
-6.739.965
260.405.699
26.447.255
885.045.104
122.041.060
5.128.627
191.749.446
73.670.047
11.198.005
900.017
19.993.767
94.501.549
11.180.763
914.787
989.012
Interest rate sensitivity of the financial instruments
Interest rate sensitivity of the statement of income, is the effect of the assumed changes in interest rates on the fair values of
financial assets at fair value through profit or loss and on the net interest income for the periods ended 31 December 2014 and
2013 of the floating rate non-trading financial assets and financial liabilities. This analysis assumes that all other variables, in
particular foreign currency rates, remain constant. The effects of changes in tax is not considered in the calculations.
31 December 2014
Profit or loss
100 bp
100 bp
increase
decrease
Total, net
(20.889)
-(20.889)
31 December 2013
Profit or loss
100 bp
100 bp
increase
decrease
Total, net
(28.046)
-(28.046)
(*)
(*)
21.616
-21.616
29.286
-29.286
Equity (*)
100 bp
increase
(20.889)
(3.964.215)
(3.985.104)
Equity (*)
100 bp
increase
(28.046)
(3.107.941)
(3.135.987)
100 bp
decrease
21.616
4.094.020
4.115.636
100 bp
decrease
29.286
3.208.812
3.238.098
Fair value information
The estimated fair values of financial instruments have been determined using available market information, and where they
exist, appropriate valuation methodologies.
The Company has classified its financial assets as held for trading, available for sale or held to maturity. As at the reporting date,
available for sale financial assets and financial assets held for trading are measured at their fair values based on their quoted
prices or fair value information obtained from brokers in the accompanying consolidated financial statements. Equity shares not
traded in active markets are measured at cost less impairment losses if any. Held to maturity investments with a carrying amount
of TL 73.670.047 (31 December 2013: 94.501.549 TL) are measured at amortised cost and their fair value amounting to TL
74.133.508 TL (31 December 2013: 93.990.092 TL) as at 31 December 2014.
Management estimates that the fair value of other financial assets and liabilities are not materially different than their carrying
amounts.
Fair value sensitivity of the equities
Equity price risk is the risk that the fair values of equities decrease as a result of the changes in the levels of equity indices and the
value of individual stocks.
The effect on income as a result of 10% change in the fair value of equity instruments held as held for trading financial assets
(traded at İstanbul Stock Exchange) due to a reasonably possible change in equity indices, with all other variables held constant,
is as follows (excluding tax effect):
31 December 2014
Profit or loss
Equity (*)
Total, net
(*)
(303.683)
-(303.683)
Equity impact includes impact of change of conjectural interest rates on income statement.
(303.683)
(9.717.561)
(10.021.244)
31 December 2013
Profit or loss
Equity (*)
(266.316)
-(266.316)
(266.316)
(8.196.227)
(8.462.543)
Classification of fair value measurements
TFRS 7 - Financial instruments: Disclosures requires the classification of fair value measurements into a fair value hierarchy by
reference to the observability and significance of the inputs used in measuring fair value of financial instruments measured at fair
value to be disclosed. This classification basically relies on whether the relevant inputs are observable or not. Observable inputs
refer to the use of market data obtained from independent sources, whereas unobservable inputs refer to the use of predictions
and assumptions about the market made by the Company. This distinction brings about a fair value measurement classification
generally as follows.
Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly (as prices) or indirectly (derived from prices).
Level 3: Fair value measurements using inputs for the assets or liability that are not based on observable market data
(unobservable inputs).
Classification requires the utilization of observable market data, if available.
The classification of fair value measurements of financial assets and liabilities measured at fair value is as follows:
Level 1
Financial assets:
134.054.733
432.428.727
566.483.460
Level 1
Financial assets:
85.630.648
446.715.336
532.345.984
31 December 2014
Level 2
Level 3
----
-3.297.263
3.297.263
31 December 2013
Level 2
Level 3
----
Total
134.054.733
435.725.990
569.780.723
Total
-3.297.263
3.297.263
85.630.648
450.012.599
535.643.247
31 December
2014
31 December
2013
3.297.263
-3.297.263
3.272.355
24.908
3.297.263
As at 31 December 2014 securities that are not publicly traded and the determination of fair values could not be obtained reliably amounting to TL 617.187 have
been measured at cost (31 December 2013: 863.950 TL).
(*)
Available for sale financial assets beginning of the period
Valuation gain (valuation of financial assets account)
Available for sale financial assets end of the period
Gains and losses from financial assets
Gains and losses recognized in the statement of income:
Interest income from bank deposits
Foreign exchange gains
Income from investments in associates
Income from debt securities classified as held to maturity financial investments
Income from equity shares classified as available-for-sale financial assets
Income from equity shares classified as trading financial assets
Income from debt securities classified as available-for-sale financial assets
Income from debt securities classified as held for trading financial assets
Income from derivative transactions
Income from investment funds
Other
Investment income
Loss from valuation of financial assets
Foreign exchange losses
Loss from derivative transactions
Loss from disposal of financial assets
Investment expenses - including interest
Investment expenses
Financial gains and losses recognized in the statement of income, net
Financial gains and losses recognized in equity:
Fair value changes in investments in associates (Note 15)
Net gains transferred from statement of equity to the statement of income on
disposal of available for sale financial assets (Note 15)
Fair value changes in available-for-sale financial assets (Note 15)
Gains and losses recognized in equity, net
31 December
2014
31 December
2013
99.252.595
59.970.980
19.032.156
10.730.801
10.197.910
702.880
35.373.747
75.040
205.678
21.308.588
3.106.153
259.956.528
(3.509.979)
(49.954.025)
(184.509)
(7.713.065)
(136.623)
(61.498.201)
198.458.327
63.016.751
52.709.177
16.941.187
9.909.524
20.210.895
453.914
15.639.877
262.958
212.931
1.604.205
1.232.065
182.193.484
(4.677.619)
(28.804.896)
(99.585)
(13.581.516)
-(47.163.616)
135.029.868
31 December
2014
31 December
2013
6.313.825
2.131.545
(3.609.723)
21.041.450
23.745.552
(2.723.732)
(22.581.833)
(23.174.020)
Capital management
The Company’s capital management policies include the following:
• To comply with the insurance capital requirements required by the Turkish Treasury
• To safeguard the Company’s ability to continue as a going concern
In accordance with the “Communiqué on Measurement and Assessment of Capital Adequacy for Insurance, Reinsurance and
Individual Pension Companies” issued by Turkish Treasury on 19 January 2008 dated and 26761 numbered; the Company
measured its minimum capital requirement as TL 847.030.553 as at 30 June 2014. As at 31 December 2014, the capital amount of
the Company presented in the consolidated financial statements are above the minimum capital requirement amounts calculated
according to the communiqué.
5 Segment reporting
A segment is a distinguishable component of the Company that is engaged either in providing products or services (business
segment), or in providing products or services within a particular economic environment (geographical segment), which is
subject to risks and rewards that are different from those of other segments.
Business segment
A business segment reporting of the Company is presented in accordance with TFRS 8 - Operating Segments standard in this
section.
Insurance on Fire and Natural Disaster
Insurance on fire and natural disasters covers material damages occurred due to fire, lightening, explosion or smoke, steam and
temperature resulted from fire, lightning and explosion up to insurance policy limits.
Motor Third Party Liability Insurance
According to the Motorway Traffic Code numbered 2918, Motor Third Party Liability Insurance is covers vehicle owner’s legal
liability for all bodily damages to third persons and financial damages to other vehicles.
Damages caused by the trailer or semi-trailers (included light trailers) or the vehicles pulled is covered by the insurance of the
trailer. However, the trailers used for transportation of people should be included in an additional liability insurance in order to
obtain coverage.
In order to reduce and prevent the damage in the accident happened, reasonable and necessary expenses of the policyholder is
compensated by the Company. This insurance also covers unfair claims against the policyholders.
Motor Vehicles insurance
Insurance on motor vehicles covers the following dangers related with vehicles. It is possible to widen policy scope for
accessories or audio, display and communication devices which are not included in standard version of the vehicle by specifying
on the insurance policy..
• Accident with the motorized or non-motorized vehicles which used in high-ways,
• Crash with fixed or moving items without desire of the driver or accidents due to crash, capsize, fall or tumble
• The actions of third parties resulted from bad intention or mischief,
• Burn,
• Theft or attempted theft
Health
Insurance on health compensates treatment costs of illnesses or accidental injuries during the period of insurance and, if any,
daily allowances in this general framework with special conditions up to the amount written in the policy. Geographical limits of
the insurance are stated in the policy.
Geographical segment
The main geographical segment which the Company operates is Turkey. Hence, the Company has not disclosed report on
geographical segments.
Motor third
party liability
Fire and
natural
disasters
Other Unallocated
Total
Share)
Reinsurer Share)
Forward)
Reinsurer Share)
704.976.162
698.476.272
242.507.645
256.547.252
786.541.564
790.728.883
190.560.310
213.840.185
311.173.659
--
2.235.759.340
6.499.890
(14.039.607)
(4.187.319)
(23.279.875)
(27.082.837)
--
(62.089.748)
--
--
--
--
(27.260.973)
34.052
--
--
(27.260.973)
--
2.325.110.061
65.238
5.516.244
320.015
710.557.644
--
2.276.330
242.827.660
794.379.098
5.561.204
191.572.000
918.516
311.370.977
163.266
--
--
2.250.707.379
Share)
(579.959.219)
(199.455.063)
(555.299.019)
(98.225.647)
(305.140.113)
--
(1.738.079.061)
1,2- Change in Provisions for
Forward)
(142.520.936)
(548.957)
(25.862.233)
(15.513.682)
(141.270.981)
--
(325.716.789)
Income
1,1- Claims Paid (Net of Reinsurer
Share)
Technical Expense
(437.438.283)
--
(181.604.847)
(10.218.490)
(771.782.556)
(198.906.106)
--
(44.314.719)
(6.594.484)
(250.364.266)
(529.436.786)
(3.035.177)
(186.178.682)
(14.949.198)
(759.462.076)
93.174
365.517.469
(82.711.965)
(10.577.300)
(38.744.510)
(5.851.538)
(153.398.995)
(163.869.132)
(2.357.559)
(71.843.471)
(5.608.222)
(384.949.365)
Investment Income
--
--
---
--
261.960.220
2.788.809
12.159.230
(1.412.362.272)
(15.970.036)
(522.686.229)
(43.221.932)
(2.319.957.258)
261.960.220
(85.300.178)
(85.300.178)
Income tax
(13.685.863)
(13.685.863)
Other (**)
Net loss before tax
Net loss
(*)
Investment income transferred to non-technical section from technical section amounting to TL 190.509.410 is not included.
(**)
(19.132.198)
(19.132.198)
88.277.965
74.592.102
Motor third
party liability
Motor
vehicles
Health
Fire and
natural
disasters
Other
Unallocated
Total
1- Earned Premiums (Net of
Reinsurer Share)
1,1- Written Premiums (Net of
Reinsurer Share)
1,2- Change in Reserve for
Unearned Premiums (Net of
Reinsurer Shares and Less the
1,3- Change in Reserve for
Unexpired Risks (Net of Reinsurer
Share and Less the Amounts
Carried Forward)
Reinsurer Share)
Income
1- Incurred Losses (Net of
Reinsurer Share)
1,1- Claims Paid (Net of Reinsurer
Share)
493.420.390
199.257.307
721.082.517
149.968.441
262.060.515
--
1.825.789.170
(138.056.176)
(12.891.459)
(54.285.632)
(13.140.337)
(14.032.383)
--
(232.405.987)
12.085
--
--
--
(9.032.935)
--
(9.020.850)
1.843.709.742
631.464.481
212.148.766
775.368.149
163.108.778
75.063
285.125.833
--
54.849
4.959.591
185.128
498.434.830
--
2.524.934
84.400
199.442.435
731.359.774
7.752.323
150.680.930
637.426
263.791.773
1.646.858
--
(428.640.496)
(156.834.895)
(479.833.052)
(73.474.442)
(207.304.119)
--
2.067.216.007
2.924.374
14.996.198
(1.346.087.004)
1,2- Change in Provisions for
Outstanding Claims (Net of
Reinsurer Share and Less the
(291.979.894)
(156.751.764)
(490.009.240)
(68.674.051)
(139.551.206)
--
(1.146.966.155)
(136.660.602)
(83.131)
10.176.188
(4.800.391)
(67.752.913)
--
(199.120.849)
(141.750.670)
2- Change in Other Technical
Reserves (Net of Reinsurer Share
Forward)
Technical Expense
--
(13.428.446)
(583.819.612)
--
(36.294.964)
(6.115.753)
(199.245.612)
(2.087.392)
(178.514.725)
(15.995.101)
(676.430.270)
(8.555.192)
(43.655.601)
(6.661.240)
(132.346.475)
(1.780.007)
--
(62.618.146)
--
(2.507.510)
--
(274.209.782)
Investment Income
-185.154.535
(12.422.591)
(462.834.106)
(44.708.050)
(1.866.051.751)
185.154.535
(63.995.428)
(63.995.428)
Income tax
(11.654.589)
(11.654.589)
Other (**)
Net loss before tax
Net loss
(*)
(20.759.398)
(20.759.398)
78.057.700
66.403.111
Investment income transferred to non-technical section from technical section amounting to TL 123,220,226 is not included.
(**)
Deferred tax income amounting TL 11,654,589 is presented as income tax.
6 Tangible assets
Cost:
Vehicles
improvements)
1 January
2014
Additions
Disposals
31 December
2014
6.982.776
6.520.974
32.800.391
11.331.085
1.285.983
-319.222
2.925.379
444.331
383.160
-(51.463)
(1.171.752)
-(306.920)
6.982.776
6.788.733
34.554.018
11.775.416
1.362.223
18.262.277
4.166.354
81.349.840
1.138.850
-5.210.942
--(1.530.135)
19.401.127
4.166.354
85.030.647
3.578.553
1.795.812
23.879.216
8.729.811
813.465
139.655
131.780
3.198.899
666.091
215.321
-(25.772)
(1.164.362)
-(255.057)
3.718.208
1.901.820
25.913.753
9.395.902
773.729
Motor vehicles
improvements)
3.593.702
4.166.105
46.556.664
3.259.748
199
7.611.693
--(1.445.191)
6.853.450
4.166.304
52.723.166
Carrying amounts
34.793.176
32.307.481
Cost:
Vehicles
improvements)
1 January
2013
Additions
Disposals
31 December
2013
6.982.776
6.387.729
26.268.960
9.031.553
1.299.851
-1.222.795
6.531.431
2.299.532
183.855
-(1.089.550)
--(197.723)
6.982.776
6.520.974
32.800.391
11.331.085
1.285.983
4.038.677
4.166.354
58.175.900
14.977.547
-25.215.160
(753.947)
-(2.041.220)
18.262.277
4.166.354
81.349.840
3.438.898
2.221.271
20.908.142
8.495.404
764.551
139.655
116.975
2.971.074
234.407
232.810
-(542.434)
--(183.896)
3.578.553
1.795.812
23.879.216
8.729.811
813.465
Motor vehicles
improvements)
3.255.088
4.165.906
43.249.260
Carrying amounts
14.926.640
648.138
199
4.343.258
(309.524)
-(1.035.854)
3.593.702
4.166.105
46.556.664
34.793.176
There is not any change in depreciation method in the current period.
There is not any mortgage over tangible assets of the Company as at 31 December 2014 and 31 December 2013.
7 Investments in associate
The Company’s net book value of 3.264.568 TL (31 December 2013: 3.404.223 TL) as shown in the valuation work performed
by the fair value of investment properties is amount of TL 40.077.000.The fair value of real estate carried out by an independent
valuation firm is authorized by the Capital Markets Board of Turkey. Rental income on investment properties were obtained TL
1.772.698 (31 December 2013: TL 1.698.492).
8 Intangible assets
Cost:
Goodwill
assets
Carrying amounts
1 January
2014
Additions
Transfers
Disposals
31 December
2014
16.250.000
--
--
--
16.250.000
19.296.314
54.879.873
90.426.187
2.853.643
12.779.449
15.633.092
(20.420.579)
20.420.579
--
----
1.729.378
88.079.901
106.059.279
27.614.154
27.614.154
16.190.284
16.190.284
---
---
43.804.438
43.804.438
62.812.033
62.254.841
1 January 2013
Cost:
Goodwill
assets
16.250.000
Additions
Transfers
--
31 December
2013
Disposals
--
16.250.000
31.717.343
21.643.962
69.611.305
11.190.332
11.350.608
22.540.940
(21.885.303)
21.885.303
--
(1.726.058)
-(1.726.058)
19.296.314
54.879.873
90.426.187
15.125.600
15.125.600
12.488.554
12.488.554
---
27.614.154
27.614.154
Carrying amounts
54.485.705
---
62.812.033
9 Investments in associates
Investments in associates, net
31 December 2014
Carrying
Participation
value
rate
123.261.711
%20,0
123.261.711
31 December 2013
Carrying Participation
value
rate
108.028.666
%20,0
108.028.666
Total financial assets (Note 4.2)
123.261.711
108.028.666
Name
Anadolu Hayat Emeklilik
A.Ş. (consolidated financial
statements)
Total Shareholders’
assets
equity
10.157.734.455
616.308.553
Retained
earnings
Profit for
the period
Audited
or not
Period
12.090.039
95.160.780
Audited
31 December
2014
TL 19.032.156 of income is obtained from associates through equity accounted consolidation method (31 December 2013: TL
16.941.187) .
10 Reinsurance assets and liabilities
As at 31 December 2014 and 31 December 2013, outstanding reinsurance assets and liabilities of the Company in accordance
with existing reinsurance contracts are as follows:
Reinsurance assets
Provision for outstanding claims, ceded (Note 4.2), (Note 17)
Commission income accrual from reinsurers (Note 12)
Cash deposited to reinsurance companies (Note 12)
Reinsurers share in the provision for subrogation and salvage
receivables
Total
There is no impairment losses recognised for reinsurance assets.
Reinsurance liabilities
Payables to the reinsurers related to premiums written (Note 19)
Deferred commission income (Note 19)
Commission payables to the reinsurers related to written premiums (Note 23)
Cash deposited by reinsurance companies (Note 19)
Total
31 December 2014
31 December 2013
294.929.264
229.799.663
1.250.015
6.739.965
290.028.419
135.357.501
1.086.704
5.128.627
36.305
532.755.212
119.739
431.720.990
31 December 2014
31 December 2013
188.610.275
45.447.065
1.576.728
7.277.133
242.911.201
230.767.903
39.363.495
915.265
3.105.906
274.152.569
Gains and losses recognized in the statement of income in accordance with existing reinsurance contracts are as follows:
31 December 2014
31 December 2013
Premiums ceded during the period (Note 17)
Reserve for unearned premiums, ceded at the beginning of the period (Note 17)
Reserve for unearned premiums, ceded at the end of the period (Note 17)
Premiums earned, ceded (Note 17)
(605.617.965)
(290.028.419)
294.929.264
(600.717.120)
(618.521.175)
(218.883.986)
290.028.419
(547.376.742)
Claims paid, ceded during the period (Note 17)
Provision for outstanding claims, ceded at the beginning of the period (Note 17)
Provision for outstanding claims, ceded at the end of the period (Note 17)
Claims incurred, ceded (Note 17)
140.834.682
(135.357.501)
229.799.663
235.276.844
102.233.055
(89.440.431)
135.357.501
148.150.125
Commission income accrued from reinsurers during the period (Note 32)
Deferred commission income at the beginning of the period (Note 19)
Deferred commission income at the end of the period (Note 19)
Commission income earned from reinsurers (Note 32)
60.026.011
30.698.798
(32.107.489)
58.617.320
51.944.012
25.952.255
(30.698.798)
47.197.469
Commission debt accrued to reinsurers
Commission receivable accrued from reinsurers
(1.576.728)
1.250.015
-1.086.704
(307.149.669)
(350.942.444)
Total, net
11 Financial assets
As at 31 December 2014 and 31 December 2013, the Company’s financial assets are as follows:
Held to maturity financial assets
Impairment loss on available for sale financial assets
Total
31 December 2014
31 December 2013
442.140.789
73.670.047
134.054.733
(5.797.612)
644.067.957
456.674.161
94.501.549
85.630.648
(5.797.612)
631.008.746
As at 31 December 2014 and 31 December 2013, the Company’s available for sale financial assets are as follows:
31 December 2014
Debt instruments:
Issued by ISGYO (Not 45)
Issued by ISFIN
Other
Investment funds
Issued by ISFIN (Not 45)
Equity shares
Face
Value
Cost
Fair
Value
261.907.366
19.560.000
14.360.000
5.000.000
200.000
281.467.366
260.630.673
19.561.015
14.360.000
5.000.000
201.015
280.191.688
271.603.704
19.993.767
14.713.703
5.078.714
201.350
291.597.471
3.714.742.000
3.714.742.000
56.198.951
-3.770.940.951
4.052.408.317
43.165.318
43.165.318
82.023.168
-125.188.486
405.380.174
43.655.648
43.655.648
106.887.670
(5.797.612)
144.745.706
436.343.177
Carrying Value
271.603.704
19.993.767
14.713.703
5.078.714
201.350
291.597.471
43.655.648
43.655.648
106.887.670
(5.797.612)
144.745.706
436.343.177
31 December 2013
Debt instruments:
Issued by İş Bankası (Note 45)
Others
Investment funds
Issued by Is Portföy (Not 45)
Equity shares
Face
Value
Cost
Fair
Value
Carrying Value
208.933.298
134.001.139
133.000.000
1.001.139
342.934.437
205.043.677
122.295.528
121.293.570
1.001.958
327.339.205
202.930.209
123.030.072
122.028.890
1.001.182
325.960.281
202.930.209
123.030.072
122.028.890
1.001.182
325.960.281
4.089.046.000
4.089.046.000
51.223.377
-4.140.269.377
4.483.203.814
42.399.932
42.399.932
74.521.510
-116.921.442
444.260.647
38.792.780
38.792.780
91.921.100
(5.797.612)
124.916.268
450.876.549
38.792.780
38.792.780
91.921.100
(5.797.612)
124.916.268
450.876.549
As at 31 December 2013 and 31 December 2012, the Company’s financial assets held for trading are as follows:
31 December 2014
Debt instruments:
Investment funds
Founded by Iş Portföy Yönetimi A,Ş,(Note 45)
Equity shares
Face
Value
Cost
Fair
Value
Carrying Value
900.000
900.000
907.616
5.885.733
6.793.349
900.017
5.887.281
6.787.298
900.017
5.887.281
6.787.298
7.393.158.949
120.605.000
7.272.463.818
90.131
2.287.783
106.660.295
9.009.287
89.847.008
7.804.000
4.085.272
110.745.567
117.538.916
124.230.603
15.972.195
95.938.343
12.320.065
3.036.832
127.267.435
134.054.733
124.230.603
15.972.195
95.938.343
12.320.065
3.036.832
127.267.435
134.054.733
31 December 2013
Face
Value
Debt instruments:
Investment funds
Founded by Iş Portföy Yönetimi A,Ş,(Note 45)
Equity shares
Cost
Fair
Value
Carrying Value
900.000
910.156
26.442.546
27.352.702
914.787
26.447.255
27.362.042
914.787
26.447.255
27.362.042
2.901.419.050
120.605.000
2.780.723.919
90.131
2.287.783
47.118.587
9.009.287
30.305.300
7.804.000
4.085.272
51.203.859
55.605.446
13.588.728
32.901.525
9.115.193
2.663.160
58.268.606
55.605.446
13.588.728
32.901.525
9.115.193
2.663.160
58.268.606
78.556.561
85.630.648
85.630.648
900.000
As at 31 December 2013 and 31 December 2012, the Company’s financial assets held to maturity are as follows:
31 December 2014
Debt instruments:
Face
Value
Cost
Fair
Value
Carrying
Value
55.937.785
55.937.785
57.921.026
57.921.026
74.133.508
74.133.508
73.670.047
73.670.047
31 December 2013
Debt instruments:
Face
Value
Cost
Fair
Value
Carrying Value
73.661.976
73.661.976
76.666.867
76.666.867
93.990.092
93.990.092
94.501.549
94.501.549
All debt instruments (financial assets held to maturity) presented above are publicly traded in active markets and the fair value of
financial assets are classified in the 1st Level.
As at 31 December 2014, equity shares classified as available for sale financial assets with a carrying amount of TL 3.914.450 are
not publicly traded (31 December 2013: TL 4.161.213)
There is no debt security issued during the period or issued before and paid during the period by the Company.
There is no financial asset that is overdue but not impaired among the Company’s of impairment loss is recognised for equity
shares classified as available for sale in the accompanying consolidated financial statements (31 December 2013: 5.797.612 TL).
Value increases in financial assets including equity shares classified as available for sale financial assets for the last 3 years
(including tax effects):
Year
Change in value
increase /
(decrease)
Total increase
in value
2014
2013
2012
23.745.552
(23.174.020)
38.943.340
35.200.299
11.454.747
34.628.767
Trading
59.183.393
90.450.000
(30.910.832)
9.444.891
--128.167.452
31 December 2014
Available
Held to
for sale
maturity
450.876.549
94.501.549
450.725.656
-(494.361.599)
(18.745.842)
24.347.100
--(2.085.660)
4.755.471
-436.343.177
73.670.047
Total
604.561.491
541.175.656
(544.018.273)
33.791.991
(2.085.660)
4.755.471
638.180.676
Trading
42.051.074
21.305.300
(2.742.832)
(1.430.149)
--59.183.393
31 December 2013
Available
Held to
for sale
maturity
218.238.305
89.590.740
692.777.960
-(447.305.977)
(796.600)
(16.767.758)
--- 5.707.409
3.934.019
-450.876.549
94.501.549
Total
349.880.119
714.083.260
(450.845.409)
(18.197.907)
5.707.409
3.934.019
604.561.491
Movements of the financial assets during the period are presented below:
(*)
(*)
Amount of reverse repo to TL 5.887.281 (31 December 2013: 26.447.255 TL) are excluded.
(*)
(*)
Amount of reverse repo to TL 26,447,255 (31 December 2012: TL 5,542,173) are excluded.
Financial assets blocked in favour of the Turkish Treasury as a guarantee for the insurance activities are as follows.
31 December 2014
Total
Face
Value
Cost
Fair
Value
Carrying Value
55.937.785
10.000.000
65.937.785
57.921.026
9.801.651
67.722.677
74.133.508
10.145.962
84.279.470
73.670.047
10.145.962
83.816.009
31 December 2013
Face
Value
Cost
Fair
Value
Carrying Value
20.000.000
64.467.988
84.467.988
19.775.285
67.074.876
86.850.161
19.677.439
82.079.788
101.757.227
19.677.439
82.596.991
102.274.430
31 December
2014
31 December
2013
Receivables from main operations (Note 4.2)
Other receivables (Note 4.2)
Income prepaid expenses (Note 4.2), (Note 10)
Other current assets (Note 4.2)
Receivables from related parties (Note 4.2)
Total
797.454.113
3.595.183
2.733.430
1.895.592
-805.678.318
773.925.226
2.968.734
1.086.704
735.558
72.324
778.788.546
Short-term receivables
Long and medium-term receivables
Total
805.678.318
-805.678.318
778.788.546
-778.788.546
Total
12 Loans and receivables
As at 31 December 2014 and 31 December 2013, the details of the receivables from main operations are as follows:
Receivables from agencies, brokers and intermediaries
Salvage and subrogation receivables
Receivables from policyholders
Long term receivable which is bank guarantee and three months credit card
Total receivables from insurance operations, net
Receivables from reinsurance operations
Cash deposited to insurance and reinsurance companies (Note 4.2), (Note 10)
Provisions for receivables from insurance operations - subrogation receivables
Doubtful receivables from insurance operations - subrogation receivables
Provisions for doubtful receivables from insurance operations - subrogation receivables
(Note 4.2)
Doubtful receivables from main operations - premium receivables
Provisions for doubtful receivables from main operations premium receivables (Note 4.2)
31 December
2014
31 December
2013
624.433.183
30.648.790
33.242.694
63.044.183
751.368.850
610.583.925
29.179.630
35.367.913
61.066.508
736.197.976
47.022.365
6.739.965
(7.677.067)
86.645.265
42.073.701
5.128.627
(9.475.078)
77.541.164
(86.645.265)
26.735.242
(26.735.242)
797.454.113
(77.541.164) 25.287.994 (25.287.994) 773.925.226 As at 31 December 2014 and 31 December 2013, the details of mortgages and other guarantees for the Company’s receivables are
presented below:
Mortgage notes
Letters of guarantees
Other guarantees
Government bonds and treasury bills
Total
31 December
2014
31 December
2013
71.597.067
71.825.655
15.188.186
2.976.479
161.587.387
71.634.717
64.353.218
12.620.807
2.939.585
151.548.327
Provisions for overdue receivables and receivables not due yet
a) Receivables under legal or administrative follow up (due): TL 26.735.242 (31 December 2013: 25.287.994 TL).
b) Provision for subrogation receivables under legal or administrative follow up: TL 94.322.332 TL (31 December 2013:
87.016.242 TL).
The Company’s receivables from and payables to shareholders, associates and subsidiaries are detailed in note 45 - Related party
transactions.
The details of the receivables and payables denominated in foreign currencies and foreign currency rates used for the translation
are presented in Note 4.2- Financial risk management.
13 Derivative financial instruments
As at 31 December 2014, the Company does not have derivative financial instruments (31 December 2013: None).
14 Cash and cash equivalents
As at 31 December 2014 and 31 December 2013, cash and cash equivalents are as follows:
31 December 2014
At the
At the
beginning of
end of
the period
the period
Cash on hand
Bank deposits
Cheques given and payment orders
Bank guaranteed credit card receivables with
maturities less than three months
Cash and cash equivalents in the balance sheet
Bank deposits - blocked (*) (Note 17)
Time deposits with maturities longer than 3 months
Interest accruals on banks deposits
Cash and cash equivalents in the statement of
cash flows
(*)
37.347
1.356.733.446
(171.519)
49.256
901.838.577
(1.025.984)
31 December 2013
At the
At the
beginning of
end of
the period
the period
49.256
901.838.577
(1.025.984)
59.000
810.515.425
(1.104.472)
249.449.440
1.606.048.714
252.850.367
1.153.712.216
252.850.367
1.153.712.216
159.051.422
968.521.375
(223.171.410)
(335.567.238)
(3.580.842)
(151.508.238)
(174.210.161)
(2.481.010)
(151.508.238)
(174.210.161)
(2.481.010)
(125.966.707)
(315.826.956)
(2.299.223)
1.043.729.224
825.512.807
825.512.807
524.428.489
As at 31 December 2014 and 31 December 2013 cash collateral kept in favour of the Turkish Treasury as a guarantee for the insurance activities.
As at 31 December 2014 and 31 December 2013, bank deposits are further analyzed as follows:
Foreign currency denominated bank deposits
- time deposits
- demand deposits
Bank deposits in Turkish Lira
- time deposits
- demand deposits
Bank deposits
31 December
2014
31 December
2013
119.637.331
3.883.616
111.825.146
12.217.907
1.230.888.040
2.324.459
1.356.733.446
773.219.958
4.575.566
901.838.577
15 Equity
Paid in capital
The shareholder having direct or indirect control over the shares of the Company is İş Bankası Group.
The Company does not increase its share capital in the current period.
As at 31 December 2014, the issued share capital of the Company is TL 500,000,000 (31 December 2013: TL 500,000,000) and
The Company unregistered Group A shares as of 11 April 2013 in which approved in Main Article of the Company dated in 11
April 2013. The share capital of the Company consists of 50,000,000,000 (31 December 2013: 50,000,000,000 shares) issued
shares with TL 0.01 nominal value each.
Other capital reserves
cannot be transferred to another account other than a capital increase or cannot be withdrawn from the entity for five years. As
at 31 December 2013, tax exempt gain from participation shares and real estate sale in 2010 amounting to TL 8.081.516, and in
2011 amounting to TL 80.025 is classified as other capital reserves. and to also in 2013 amounting TL 647.763 reclassified to
other capital reserves as a gain on sale of fixed assets and equity.
Other capital reserves at the beginning of the period
Other capital reserves at the end of the period
31 December 2014
31 December 2013
8.161.541
647.763
8.809.304
8.161.541
-8.161.541
Legal reserves
The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial Code. The first legal
reserve is appropriated out of the statutory profits at the rate of 5%, until the total reserve reaches a maximum of 20% of the
entity’s share capital. The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the
entity’s share capital. The first and second legal reserves are not available for distribution unless they exceed 50% of the share
capital, but may be used to absorb losses in the event that the general reserve is exhausted.
The movements of legal reserves are as follows:
Legal reserves at the beginning of the period
Legal reserves at the end of the period
31 December 2014
31 December 2013
45.293.051
1.706.788
46.999.839
43.918.190
1.374.861
45.293.051
31 December 2014
31 December 2013
19.723.583
1.239.173
20.962.756
20.564.428
(840.845)
19.723.583
31 December 2014
31 December 2013
7.161.457
548.583
7.710.040
9.737.625
(2.576.168)
7.161.457
Extraordinary reserves
The movements of extraordinary reserves are presented below:
Extraordinary reserves at the beginning of the period
Extraordinary reserves at the end of the period
Statutory reserves
The movements of statutory reserves are presented below:
Statutory reserves at the beginning of the period
Statutory reserves at the end of the period
Valuation of financial assets
Movement of fair value reserves of available for sale financial assets and associates are presented below:
Valuation differences at the beginning of the period
Fair value changes during the period
Subsidiaries consolidated according to the equity method
Net gains transferred to the statement of income
Deferred tax effect
Valuation differences at the end of the period
31 December 2014
11.454.747
24.347.100
6.313.825
(3.609.723)
(3.305.650)
35.200.299
31 December 2013
34.628.767
(16.767.758)
(6.773.194)
(2.723.732)
3.090.664
11.454.747
Other profit reserves
In accordance with the 4 July 2007 dated and 2007/3 numbered Compliance Circular issued by the Turkish Treasury, it was
stated that the companies would not further provide earthquake provision for the year 2007. However, it was also stated that
earthquake provisions provided in previous periods (earthquake provision in the financial statements as at 31 December 2006)
should be transferred to the reserve accounts under equity in accordance with the 5th Temporary Article of the Insurance Law.
The companies had to transfer total amount of provisions, including earthquake provisions reserved as at 31 December 2006 and
related gains obtained from investment of these amounts, to the account called as “549.01 - transferred earthquake provisions”
which would be opened as at 1 September 2007 within Uniform Chart of Account and the reserves amount should not be subject
to dividend distribution or should not be transferred to other accounts.
Accordingly, the Company initially transferred total provisions amounting to TL 96.036.157 including earthquake provisions
reserved as at 31 December 2006 and related gains obtained from investment of this amount, to the reserve accounts under
equity, TL 51.846.111 of this amount is used for capital increase in 2010. Accordance with IAS 19, to add the amount of actuarial
loss and net profit of TL 625.539 defined remeasure net profit debt and TL 175.121 decreased via by consolidation , the amount
of new balance is TL 44.034.442.
Not subject to profit distribution
In Accordance terms of tax legislation %75 portion of the gains from sales real estate and subsidiaries are exempt from corporate
tax on condition that it has kept in a special fund account at least five years. Exempt gains can not be transferred to another
account except to add capital or in any way can not be withdrawn from the business in five years. In relation to these issues,
Treasury disclosure Sales profit amounting TL 1.394.625 provided by sales of real estate and equity is classified as a “subject to
distribution non profit” .
16 Other reserves and equity component of DPF
As at 31 December 2014 and 31 December 2013, change in fair values of available-for-sale financial assets which is presented as
“valuation of financial assets” and earthquake provisions provided in the previous years presented under “other profit reserves”
are explained in detail in Note 15 - Equity above. As at 31 December 2014 and 31 December 2013, the Company does not hold any
insurance or investment contracts which contain a DPF.
17 Insurance contract liabilities and reinsurance assets
Estimation of the ultimate payment for the outstanding claims is one of the most important accounting assumptions of the
Company. Estimation of the insurance contract liabilities contains several ambiguities by nature. The Company makes calculation
of the related insurance technical provisions accordance with the Insurance Legislation and reflects them into financial
statements as mentioned in Note 2 - Summary of significant accounting policies.
As at 31 December 2014 and 31 December 2013, technical reserves of the Company are as follows:
31 December
2014
31 December
2013
Reserve for unearned premiums, gross
Reserve for unearned premiums, SSI share
Reserves for unearned premiums, net
1.491.252.563
(294.929.264)
(36.692.792)
1.159.630.507
1.422.324.312
(290.028.419)
(34.755.134)
1.097.540.759
Provision for outstanding claims, gross
Provision for outstanding claims, ceded (Note 10)
Provision for outstanding claims, net
1.243.987.764
(229.799.663)
1.014.188.101
823.828.813
(135.357.501)
688.471.312
52.687.216
(12.307.870)
40.379.346
22.489.031
(9.370.658)
13.118.373
60.549.876
7.702.761
68.252.637
Gross of provision unexpired risk reserve
Reinsurer’s share of the provision for unexpired risk
Provision unexpired risk reserve, net
2.282.450.591
44.579.840
7.702.761
52.282.601
1.851.413.045
Short-term
Medium and long-term
2.214.197.954
68.252.637
2.282.450.591
1.799.130.444
52.282.601
1.851.413.045
Equalization provision, net (*)
General provision, net
Other technical provisions, net
(*)
Net losses (after reinsurance) resulted from earthquake occurred in Van amounting to TL 7.101.831 TL (31 December 2013: 7.101.831 TL) are decreased from prior
periods’ equalization provision based on the regulation.
As at 31 December 2014 and 31 December 2013, movements of the insurance liabilities and related reinsurance assets are
presented below:
31 December 2014
Reinsurer
Gross
share
the period
1.422.324.312
3.004.830.066
(2.935.901.815)
period
1.491.252.563
(294.929.264)
31 December 2013
Reinsurer
Gross
share
the period
1.104.218.773
2.749.704.405
(2.431.598.866)
period
1.422.324.312
(290.028.419)
(605.617.965)
600.717.120
(218.883.986)
(618.521.175)
547.376.742
(290.028.419)
(36.692.792)
1.159.630.507
SSI share
Net
(20.200.015)
865.134.772
(63.967.223)
2.067.216.007
49.412.104 (1.834.810.020)
(34.755.134)
(135.357.501)
1.097.540.759
Net
688.471.312
(235.276.844)
1.738.079.061
140.834.682 (1.412.362.272)
(229.799.663) 1.014.188.101
31 December 2013
Gross
Ceded
578.790.894
provisions for outstanding claims provided at the beginning of the period
1.494.237.129
(1.249.199.210)
823.828.813
Net
(34.755.134)
1.097.540.759
(74.102.040)
2.325.110.061
72.164.382 (2.263.020.313)
31 December 2014
Gross
Ceded
823.828.813
provisions for outstanding claims provided at the beginning of the period
1.973.355.905
(1.553.196.954)
1.243.987.764
SSI share
(89.440.431)
Net
489.350.463
(148.150.125)
1.346.087.004
102.233.055 (1.146.966.155)
(135.357.501)
688.471.312
Claim development tables
The basic assumption used in the estimation of provisions for outstanding claims is the Company’s past experience on claim
developments. Judgment is used to assess the extent to which external factors such as judicial decisions and government
legislation affect the estimates. The sensitivity of certain assumptions like legislative change, uncertainty in the estimation
process, etc, is not possible to quantify. Furthermore, because of delays that arise between occurrence of a claim and its
subsequent notification and eventual settlement, the outstanding claim provisions are not known with certainty at the reporting
date. Consequently, the ultimate liabilities will vary as a result of subsequent developments. Differences resulting from
reassessment of the ultimate liabilities are recognized in subsequent financial statements.
Development of insurance liabilities enables to measure the performance of the Company in estimation of its ultimate claim
losses. The amounts presented on the top of the below tables show the changes in estimations of the Company for the claims
in subsequent years after claim years. The amounts presented on the below of the below tables give the reconciliation of total
liabilities with provision for outstanding claims presented in the accompanying financial statements.
31 December 2014
Claim year
2010
2011
2012
2013
2014
Claim year
856.910.386 1.075.581.281 1.495.474.317 1.229.263.704 1.717.748.856
1 year later
867.349.763 1.144.103.263 1.543.105.072 1.300.026.322
-2 years later
878.025.588 1.189.429.253 1.609.382.065
--3 years later
900.866.545 1.238.843.054
---4 years later
928.050.817
cumulative claims
928.050.817 1.238.843.054 1.609.382.065 1.300.026.322 1.717.748.856
date
861.604.436 1.131.547.961 1.398.954.819 1.116.056.443 1.189.365.685
Liability recognized in the
66.446.381
107.295.093
210.427.246
183.969.879 528.383.171
Liability recognized before
2009
31 December 2013
Claim year
2009
2010
2011
2012
2013
Claim year
902.239.347
851.459.419 1.067.586.430 1.482.692.631 1.272.774.899
1 year later
907.824.330
861.798.734 1.135.585.447 1.529.990.732
-2 years later
921.465.530
872.386.982 1.180.548.434
--3 years later
931.210.335
895.069.601
---4 years later
962.409.997
cumulative claims
962.409.997
895.069.601 1.180.548.434 1.529.990.732 1.272.774.899
date
899.070.812
840.148.526 1.092.013.460 1.336.660.376
919.034.121
Liability recognized in the
63.339.185
54.921.075
88.534.974
193.330.356
353.740.778
Liability recognized before
2007
Total
6.374.978.544
4.854.584.420
3.676.836.906
2.139.709.599
928.050.817
6.794.051.114
5.697.529.344
1.096.521.770
147.465.994
1.243.987.764
Total
5.576.752.726
4.435.199.243
2.974.400.946
1.826.279.936
962.409.997
5.840.793.663
5.086.927.295
753.866.368
69.962.445
823,828,813
Total amount of guarantee that should be placed by the Company for life and non-life branches and guarantees placed for the life
and non-life branches in respect of related assets
Non-life:
Total
Non-life:
Total
31 December 2014
Should be
placed (**)
Placed (*)
282.343.518
222.697.267
84.612.376
307.309.643
31 December 2013
Should be
placed (**)
Placed (*)
230.055.081
151.443.845
101.932.249
253.376.094
Carrying
amount
223.171.410
83.816.009
306.987.419
Carrying
amount
151.508.238
102.274.430
253.782.668
“As at 31 December 2014 and 31 December 2013, government bonds and treasury bills are measured at daily official prices announced by the Central Bank of
Turkey in accordance with the 6th Article of “Circular Related to the Financial Structure of Insurance, Reinsurance, and Private Pension Companies.
(*)
“According to the 7th article of the “Circular Related to the Financial Structure of Insurance, Reinsurance, and Private Pension Companies” which regulates necessary
guarantee amount, minimum guarantee fund for capital adequacy calculation period will be established as a guarantee in two months following the calculation period.
According to “Regulations Regarding to Capital Adequacy Measurement and Assessment of Insurance, Reinsurance, and Private Pension Companies”, companies
must prepare their capital adequacy tables twice in a financial year at June and December periods and must sent capital adequacy tables to the Turkish Treasury
Department within two months. Since the amounts that should be placed as of 31 December 2014 (31 December 2013) will be through the calculated amounts as of
30 June 2014 (30 June 2013), the settled amounts as of June is presented as “should be placed” amounts.
(**)
Company’s number of life insurance policies, additions, disposals during the period and the related mathematical reserves
None.
Distribution of new life insurance policyholders in terms of numbers and gross and net premiums as individual or group during
the period
None.
Distribution of mathematical reserves for life insurance policyholders who left the Company’s portfolio as individual or group
during the period
None.
Deferred commission expenses
The Company capitalizes commissions paid to the intermediaries related to policy production under short-term and long-term
prepaid expenses. As at 31 December 2014, short-term prepaid expenses amounting to TL 205.884.923 (31 December 2013:
TL 196.680.406) consist of deferred commission expenses amounting to TL 187.284.759 (31 December 2013: TL 182.110.391)
and other prepaid expenses amounting to TL 5.260.484 (31 December 2013: TL 5.905.318). The amount of commission expense
TL13.339.680 TL (31 December 2013: 8.664.697) Long-term prepaid expenses amounting TL 3.562.038 (31 December 2013: TL
34.671) are composed of other prepaid expenses.
As at 31 December 2014 and 31 December 2013, the movements of deferred commission expenses are presented below:
Deferred commission expenses at the beginning of the period
Commissions accrued during the period (Note 32)
Commissions expensed during the period (*)
Deferred commission expenses at the end of the period
(*)
Commission expense are included as a reinsurance commissions..
31 December 2014
31 December 2013
190.775.088
429.400.515
(419.551.164)
200.624.439
156.049.462
392.156.692
(357.431.066)
190.775.088
Individual pension funds
None.
18 Investment contract liabilities
None.
19 Trade and other payables and deferred income
31 December 2014
31 December 2013
Other payables
Deferred income and expense accruals (Note 10)
Taxes and funds payable and other similar obligations
Total
302.045.983
47.561.333
45.447.065
27.386.135
422.440.516
327.033.095
56.534.780
39.363.495
27.491.024
450.422.394
Short-term liabilities
Long-term liabilities
Total
422.440.516
-422.440.516
450.422.394
-450.422.394
As at 31 December 2014, other payables amounting to TL 47.561.333 (31 December 2013: TL 56.534.780) consist of treatment
cost payables to SSI amounting to TL 16.375.984 (31 December 2013: TL 25.801.332), payables to Tarsim and DASK and
outsourced benefits and services amounting to TL 28.268.772 (31 December 2013: TL 27.696.412) and deposits and guarantees
received amounting to TL 2.916.577 (31 December 2013: TL 3.037.036).
Payables arising from main operations of the Company as at 31 December 2014 and 31 December 2013 are as follows:
31 December 2014
31 December 2013
Payables to reinsurance companies (Note 10)
Payables to agencies, brokers and intermediaries
Total payables arising from insurance operations
188.610.275
30.052.668
218.662.943
230.767.903
29.888.503
260.656.406
Payables arising from other operating activities
Cash deposited by insurance and reinsurance companies (Note 10)
76.105.907
7.277.133
302.045.983
63.270.783
3.105.906
327.033.095
Corporate tax liabilities and prepaid taxes are disclosed below:
Corporate tax liabilities
Taxes paid during the period
Corporate tax assets, net
31 December 2014
31 December 2013
22.930.452
(21.081.960)
1.848.492
9.659.923
-9.659.923
Total amount of investment incentives which will be benefited in current and forthcoming periods
None.
20 Financial liabilities
The Company has no financial liabilities as at 31 December 2014 (31 December 2013: None)
21 Deferred tax
As at 31 December 2014 and 31 December 2013, deferred tax assets and liabilities are attributable to the following:
Deferred tax effect of current period tax losses (Note 2.18)
Other provisions
Equalization provision
Reserve for unexpired risks
Provisions for employee termination benefits and unused vacations
Provision for subrogation receivables
Difference in depreciation methods on tangible and intangible assets
between tax regulations and the Reporting Standards
Discount of receivables and payables
Valuation differences in financial assets
Subrogation receivables from third parties
Deferred tax assets, net
31 December 2014
Deferred tax
31 December 2013
Deferred tax
-3.588.669
8.907.829
8.075.869
2.812.254
1.535.413
732.945
2.944.113
6.299.668
2.623.675
2.581.526
1.895.016
(2.192.013)
(88.941)
(1.547.916)
(965.401)
20.125.763
(1.224.897)
115.797
827.566
(603.708)
16.191.701
As at 31 December 2014 The company has not deductible tax losses.(31 December 2013: TL 9.302.276)
Expiration date
31 December 2014
31 December 2013
----
-3.664.725
3.664.725
Movement of deferred tax assets table:
31 December 2014
31 December 2013
Opening balance at 1 January
Recognised in profit or loss (Note 35)
Recognised in equity (Note 15)
Deferred tax asset
16.191.701
7.396.097
(3.462.035)
20.125.763
24.604.121
(11.654.589)
3.242.169
16.191.701
31 December 2016
31 December 2017
Total
22 Retirement benefit obligations
The participants or beneficiaries of pension funds are required to be transferred Social Security Institution according to
“Amendments to the Social Security and General Health Insurance Act Including Certain Laws and Decrees” numbered 5754
which was published in the Official Gazette dated 8 May 2008 and numbered 26870. Transfer will be completed within a period
of 3 years and prescribes the extension period of the transfer as maximum of two years upon the order of the Cabinet. The related
three-year transfer period has been prolonged for two years by the Cabinet decision, which was published on the Official Gazette
dated 9 April 2011. Accordingly, the three-year period expired on 8 May 2011 was extended to the 8 May 2013. In accordance
with the Act, as of the transfer date, present value of the liabilities will be determined by considering the income and expense of
the pension fund. Technical deficit rate of 9.8% shall be used in the actuarial calculation of the value in cash, and uncovered other
rights and compensations of participants or beneficiaries of pension funds should be covered by the entities that transfer the
funds.
Up to date, as per the actuarial calculation performed, there has not been any deficit in Anadolu Anonim Türk Sigorta Şirketi
Memurları Emekli Sandığı (Pension Fund of Anadolu Anonim Türk Sigorta Şirketi), which has been founded in accordance with
the Article 20 of the Social Securities Act No: 506 and the Company has made no payment for this purpose. It is believed that
the assets of this institution are adequate enough to cover its total obligations; therefore this shall not constitute any additional
liability on the Company.
Phrases of 2 years which expression in “ Amendments Social Insurance and General Health Insurance Law Amending the Law”
numbered 28227 which was published in the Official Gazette dated 8 March 2012 and numbered 506 law which has relevant
terms was changed to 4 years Banks, insurance and reinsurance companies, chambers of commerce, industry chambers,
exchanges which take part scope of Law 506, No: 20 or the crate which established for constituted staff association are included
in this Law to transferred Social Security Administration in the publication of this article within three years from the date. Three
year period may be extended by a maximum two years via The Council of Ministers . As of the date of transfer, pension fund
contributors are insured scope of this Law Article 4 (a).With this amendment, the authority postpone the transfer of the funds are
given The Council of Ministers modified 4 years. (8 May 2011 to 8 May 2015) In this context, the Council of Ministers postpone
transfer of the funds one more year with the decision of The Council of Ministers dated 24 February 2014 No. 2014/6042.
23 Other liabilities and provisions
As at 31 December 2014 and 31 December 2013; the details of the provisions for other risks are as follows:
Provision for employee termination benefits
Provision for unused vacation pay liability
Total provision for other risks
Provision for agency award
Provision for guarantee account
Provision for employee bonus
Expense provision for gauge commission (Not 10)
Provision for tax assessment (Not 42, (Not 47)
Prepaid income and expense accruals
31 December 2014
31 December 2013
12.628.115
1.433.153
14.061.268
11.720.142
1.187.490
12.907.632
31 December 2014
31 December 2013
3.356.650
7.182.519
7.000.000
1.576.728
15.489.301
34.605.198
4.300.000
6.180.307
6.000.000
915.265
7.615.549
25.011.121
Movements of provision for employee termination benefits during the period are presented below:
Provision at the beginning of the period
Interest cost (Note 47)
Service cost (Note 47)
Payments made during the period (Note 47)
Actuarial difference (Note 47)
Provision at the end of the period
31 December 2014
31 December 2013
11.720.142
1.196.136
930.599
(436.838)
(781.924)
12.628.115
9.856.211
757.050
936.206
(586.852)
757.527
11.720.142
24 Net insurance premium
Net insurance premium revenue is presented in detailed in the accompanying consolidated statement of income.
25 Fee revenue
None.
26 Investment income
Investment income is presented in “Note 4.2 - Financial Risk Management”.
27 Net income accrual on financial assets
Net realized gains on financial assets are presented in “Note 4.2 - Financial Risk Management.
28 Assets held at fair value through profit or loss
Presented in “Note 4.2 - Financial Risk Management”.
29 Insurance rights and claims
Claims paid, net off reinsurers’ share
Changes in reserve for unearned premiums, net off reinsurers’ share
Changes in provision for outstanding claims, net off reinsurers’ share
Change in equalization provisions
Changes in reserve for unexpired risks, net off reinsurers’ share
Total
31 December 2014
31 December 2013
1.412.362.272
62.089.748
325.716.789
15.970.036
27.260.973
1.843.399.818
1.146.966.155
232.405.987
199.120.849
12.422.591
9.020.850
1.599.936.432
30 Investment contract benefits
None.
31 Other expenses
The allocation of the expenses with respect to their nature or function is presented in Note 32 - Expenses by nature below.
32 Operating expenses
As of 31 December 2014 and 31 December 2013 the operating expenses are disclosed as follows:
Commission expenses (Note 17)
Commissions to intermediaries accrued during the period (Note 17)
Change in deferred commission expenses (Note 17)
Employee benefit expenses (Note 33)
Commission income from reinsurers (Note 10)
Commission income from reinsurers accrued during the period (Note 10)
Change in deferred commission income (Note 10)
Administration expenses
Advertising and marketing expenses
Outsourced benefits and services
Total
31 December 2014
31 December 2013
385.141.391
390.315.759
(5.174.368)
104.693.751
(58.617.320)
(60.026.011)
1.408.691
69.230.043
13.987.613
8.250.751
522.686.229
357.431.066
392.156.692
(34.725.626)
95.467.768
(72.496.752)
(76.879.895)
4.383.143
69.800.405
10.695.100
1.936.519
462.834.106
31 December 2014
31 December 2013
76.090.749
15.758.608
12.844.394
104.693.751
67.586.147
13.983.364
13.898.257
95.467.768
33 Employee benefits expenses
Wages and salaries
Employer’s share
Other
Total
34 Financial costs
Finance costs of the period are presented in “Note 4.2 - Financial Risk Management” above. There are no finance costs classified
in production costs or capitalized on tangible assets. All financial costs are directly recognised as expense in the consolidated
statement of income.
35 Income tax
Income tax expense in the accompanying consolidated financial statements is as follows:
Current tax expense provision:
Corporate tax provision
Deferred taxes:
Origination and reversal of temporary differences
Total income tax expense recognised in profit or loss
31 December 2014
31 December 2013
(21.081.960)
--
7.396.097
(13.685.863)
(11.654.589)
(11.654.589)
In the end of accounting period 31 December 2013 and 31 December 2014, A reconciliation of tax expense applicable to profit
from operating activities before income tax at the statutory income tax rate to income tax expense at the Company’s effective
income tax rate is as follows:
Profit before tax
Taxes on income per statutory tax rate
Tax exempt income
Non deductible expenses
Total tax income recognized in profit or loss
31 December 2014
88.277.965
Tax rate (%)
17.655.593
20,00
(4.041.796)
(4,58)
72.066
0,08
13.685.863
15,50
31 December 2013
78.057.700
Tax rate (%)
15.611.540
20,00
(4.728.809)
(6,06)
771.858
0,99
11.654.589
14,93
36 Net foreign exchange gains
Net foreign exchange gains are presented in “Note 4.2 - Financial Risk Management” above.
37Earnings per share
Earnings per share are calculated by dividing net profit of the period to the weighted average number of shares.
Net profit /(loss) for the period
Weighted average number of shares
Earnings /(loss) per share (TL)
38 Dividends per share
31 December 2014
31 December 2013
74.592.102
50.000.000.000
0,00149
66.403.111
50.000.000.000
0,00133
The company did not perform profit distribution in years of 2013 and 2014.
39 Cash generated from operations
The cash flows from operating activities are presented in the accompanying consolidated statement of cash flows
40 Convertible bonds
None.
41 Redeemable preference shares
None.
42 Risks
In the normal course of its operations, the Company is exposed to legal disputes, claims and challenges, which mainly stem from
its insurance operations. The necessary income/expense accruals for the revocable cases against/on behalf of the Company are
provided under provision for outstanding claims in the accompanying consolidated financial statements.
As at 31 December 2014, total amount of the claims that the Company face is TL 1.040.392.000 in gross (31 December 2013: TL
726.988.000). The Company provided provision for outstanding claims in the consolidated financial statements by considering
collateral amounts.
As at 31 December 2014, ongoing law suits prosecuted by the Company against the third parties amounting TL 194.259.000
(31 December 2013: TL 206.337.000).
Anadolu Anonim Türk Sigorta Şirketi Mensupları Dayanışma Vakfı” was established by Anadolu Anonim Türk Sigorta Şirketi
in accordance with the Turkish Commercial and Civil Laws which is examined by Tax Audit Committee inspectors due to the
Company payments what are fulfilled obligations to the foundation owing to deed of the foundation and the related act. As a
result of this investigation, an examination was reported for periods of 2007, 2008, 2009, 2010 and 2011.
Legal process has been initiated related to 2007 and 2008, also as of the report date there are cases against/on behalf of us
and also for the against result cases the case has been moved to a higher court. In addition, some part of the payment orders
submitted to us for the following periods are subjected to litigation and for the other part of the cases compromise were made to
relevant parties.
As of the report date the Company made a payment of TL 3.801.378 for tax assessments, also due to a precautionary condition
the company has made a provision to the amount of TL 15.489.301 (31 December 2013: 7.615.549)
As a result of investigation conducted by the Ministry of Finance Tax Audit Board, tax penalty which is amount of TL 2.1 million
(actual tax), and TL 3.1 million tax penalty is announced by reason to tax salvage operations not subject to the banking and
insurance transactions tax. The company does not make any provision for this tax penalty because of thinking that the Company’s
operations are in line with the local regulations.
43 Commitments
The details of the guarantees that are given by the Company for the operations in non-life branches are presented in Note 17.
The future aggregate minimum lease payments under operating leases for properties rented for use of head office and regional offices
and motor vehicles rented for sales and marketing departments are as follows:
Within one year
Between one to five years
Total of minimum lease payments
44 Business combinations
None.
31 December 2014
7.517.871
3.476.491
10.994.362
31 December 2013
5.871.892
7.725.700
13.597.592
45 Related party transactions
The ultimate controlling party of the Company is İş Bankası Group and the groups having direct control over İş Bankası Group
and the affiliates and associates of İş Bankası Group are defined as related parties of the Company.
The related party balances as of 31 December 2014 and 31 December 2013 are as follows:
31 December 2014
31 December 2013
İş Bankası - cash at banks
Türkiye Sınai ve Kalkınma Bankası - cash at banks
Banks
533.547.278
-533.547.278
678.467.430
13.055
678.480.485
Bonds issued by İş Bankası (Note 11)
Bonds issued by Is GYO (Not 11)
Bonds issued by Is Leasing (Not 11)
Investment funds founded by İş Bankası (Note 11)
Investment funds founded by İş Portföy Yönetimi A.Ş. (Note 11)
Investment funds founded by İşbank GmbH (Note 11)
Financial assets
-14.713.703
5.078.714
15.972.195
139.593.991
12.320.065
187.678.668
122.028.890
--13.588.728
71.694.305
9.115.192
216.427.115
91.802.800
76.454.603
İş Bankası - receivables stem from premiums written via the Bank
Receivables stems from premiums written via Şişecam Sigorta Aracılık
Hiz. A.Ş.
Trakya Cam Sanayii A.Ş.
Milli Reasürans T.A.Ş. - receivables from reinsurance operations
Anadolu Hayat Emeklilik A.Ş. - premium receivables
2.924.252
167.971
1.416
490.293
95.386.732
5.743.294
21.600
644
4.650
82.224.791
Milli Reasürans T.A.Ş.- payables from reinsurance operations
İş Bankası - commission payables
Şişecam Sigorta Aracılık Hizmetleri A.Ş. - commission payables
11.953.520
7.082.553
23.437
19.059.510
20.215.519
5.900.234
365.739
26.481.492
No guarantees have been taken against receivables from related parties.
There are no doubtful receivables from shareholders, subsidiaries and joint ventures.
No guarantees, commitments, guarantee letters, advances and endorsements given in favour of shareholders, associates and
subsidiaries.
The Company accrued TL 57.835.977 premium (31 December 2013: 50.126.169 TL) for related party policies. The transactions
with related parties during the year ended 31 December 2014 and 2013 are as follows:
31 December 2014
31 December 2013
İş Bankası - premiums written via the Bank
Premiums written via Şişecam Sigorta Aracılık Hizmetleri A.Ş.
İş Finansal Leasing- premiums written
Premiums written via TSKB
Premiums written
328.891.626
41.316.107
17.077.324
101.511
387.386.568
261.701.058
38.432.938
14.231.789
952.525
315.318.310
Milli Reasürans T.A.Ş
Premiums written, ceded
(93.328.833)
(93.328.833)
(79.445.393)
(79.445.393)
55.732.060
9.488.742
11.500
560.304
11.828.210
77.620.816
36.922.222
---3.797.714
40.719.936
(33.650.040)
(8.674.189)
(3.240.935)
-21.497.125
(24.068.039)
(24.613.912)
(7.353.671)
(2.744.249)
(75.589)
18.214.159
(16.573.262)
(3.250.000)
-(2.837.238)
-(632.924)
(6.720.162)
(3.271.539)
(371.750)
(1.480.031)
(4.883.609)
(475.950)
(10.482.879)
İş Bankası - interest income from deposits
İş Portföy Yönetimi - income from investment funds
İş Yatırım Menkul Değerler - income from investment funds
İş Gayrimenkul Yatırım Ortaklığı - income from bonds
İş Bankası - income from bonds
Investment income
Türkiye İş Bankası A.Ş - commission expense
Şişecam Sigorta Aracılık Hizmetleri A.Ş. - commission expense
İş Finansal Kiralama - commission expense
TSKB - commission expense
Milli Reasürans T.A.Ş- commission expense
Operating expenses, net
İş Bankası - banking service fee
İş Bankası - rent expense
İş Merkezleri Yönetim ve İşletim A.Ş. - building service cost
İş Gayrimenkul Yatırım Ortaklığı A.Ş. - rent expense
İş Portföy Yönetimi - management commission
Other expenses
46 Events after the reporting date
Subsequent events are disclosed in Note 1.10 Events after the reporting date.
47 Others
Items and amounts classified under the “other” account in financial statements either exceeding 20% of the total amount of the
group to which they relate or 5% of the total assets in the balance sheet
They are presented in the related notes above.
“Payables to employees and receivables from employees presented under accounts, “other receivables” and “other short or long
term payables”, and which have balance more than 1% of the total assets
None.
Subrogation recorded in “Off-Balance Sheet Accounts”
None.
Real rights on immovable and their values
None.
Explanatory note for the amounts and nature of previous years’ income and losses
None.
For the years ended 31 December 2014 and 2013, details of discount and provision expenses are as follows:
Provision expenses
Other provision income /(expense)
Provision expense for unused vacation (Note 23)
Provision expense for employee termination benefits (Note 23)
Provision expense for doubtful receivables (Note4.2)
Tax assessment expense (Not 23)
Total
Rediscount expenses
Rediscount income
Rediscount expense
Total of rediscounts
31 December 2014
31 December 2013
1.071.425
(245.663)
(1.689.897)
(11.622.773)
(7.873.752)
(20.360.660)
908.822
(338.452)
(1.106.404)
(15.741.368)
(7.615.549)
(23.892.951)
31 December 2014
31 December 2013
12.636.796
(15.997.077)
(3.360.281)
12.842.993
(10.489.059)
2.353.934
Other Matters and Financial Statements / An Assessment of Financıal Standing, Profitability and Solvency
An Assessment of Financıal Standing, Profitability and
Solvency
3,004,830
2,749,704
Gross Profit/Loss
(TL thousand)
-63.981
The company booked a profit of
TL 92,642 thousand in 2014. Return
on equity and return on assets stood at
%7.0 and %1.9, respectively.
12
13
14
14
73.7
1,412,362
12
1,146,966
12
13
14
Gross Profit-Loss/Gross
Premium Production
(TL thousand)
-2.9
Assessment of profitability
77.7
14
Loss/Premium Ratio
(TL thousand)
81.2
13
3.1
12
Claims Retention Ratio
(TL thousand)
1,243,327
1,553,197
Claims Paid
(TL thousand)
2.5
In 2014, claims paid amounted to
TL 1,553,197 thousand. A significant
portion of the claims paid arose, in
order, from losses in motor vehicles,
motor vehicles liability, health/illness,
and general losses branches. Combined
loss/premium ratio was 77.7%, 4.0
points lower than its 2013 value.
14
92.642
Having adopted it as a duty to make
claim payments fully and timely to its
policyholders, Anadolu Sigorta attained
this goal once again in 2014 drawing on
its solid asset structure and balanced
liquidity ratio. A big part of the risk was
ceded through reinsurance contracts
made in branches under which highamount coverage is provided such as
fire and general losses, thus making
it possible for the Company’s asset
structure to remain unaffected by claims
paid in big amounts.
13
1,249,199
Solvency and solvency performance
12
67.462
A portion in the amount of TL 605,618
thousand of premiums were ceded
through reinsurance in 2014, thus
significantly reducing retained risk in
branches likely to present high claim
settlements in particular, such as fire,
watercraft and general losses.
2,234,633
Anadolu Sigorta registered TL 3,004,83
thousand in premium production
in 2014. The greatest contributors
to premium production were motor
vehicles, motor vehicles liability, fire
and natural disasters, and illness-health
branches.
Premium Production
(TL thousand)
1,371,855
Premium production
12
13
14
13
Other Matters and Financial Statements / Information on Financial Structure
Information on Financial Structure
3,773,391
3,252,770
13
14
Nominal Capital
(TL thousand)
500,000
The nominal capital of Anadolu Sigorta
was TL 500,000 thousand as at year-end
2014.
12
500,000
Capital volume
2,498,198
As of year-end 2014, total assets
reached TL 3,773,391thousand, up
16.0% year-on. With a share of 59.6%
representing the largest item in total
assets, total cash and financial assets
grew 26.1% year-on to TL 2,250,117
thousand, giving confidence with
respect to payment of possible losses to
policyholders with this large volume.
Total Assets
(TL thousand)
500,000
Assets performance
12
14
13
Other Matters and Financial Statements / Summary Financial Information for the Last 5 Years Including the Reporting Period
Summary Financial Information for the Last 5 Years
Including the Reporting Period
(TL thousand)
Gross Premiums
Technical Division Balance
Investment Income
Investment Expenses
Other Income and Expenses
Period Gross Income (Loss)
Taxation
Period Net Income (Loss)
Total Assets
2014
3,004,830
121,260
258,928
-275,810
-11,736
92,642
-21,082
71,560
1,019,833
3,773,391
2013
2,749,704
100,878
186,213
-187,216
-32,414
67,462
0
67,462
913,016
3,252,770
2012
2,234,633
-72,500
154,411
-154,271
8,378
-63,981
0
-63,981
756,361
2,498,198
2011
1,926,090
-10,068
150,280
-141,443
5,301
4,069
0
4,069
705,124
2,209,016
2010
1,420,458
43,108
143,931
-128,587
-14,703
43,749
-6,203
37,546
848,547
1,951,240
Head Office
Tel: +90 850 744 0 744
Fax: +90 850 744 0 745
E-mail: bilgi@anadolusigorta.com.tr
Produced by Tayburn
Tel: (90 212) 227 04 36
www.tayburnkurumsal.com

Annual Report - Anadolu Sigorta

Transcription

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