We ended a year featured by the prevailing uncertainties and ongoing global impacts of the pandemic both on daily life and on the real economy. Despite the rising global risks within the year, Türkiye maintained its powerful stance and concretely demonstrated its success in managing this world-wide transformation and rebalancing process through its robust growth
To keep its stable and sustainable growth in the future as well as in this continuum, it is quite critical for our country to heighten the domestic saving rates. We need to have high saving rates to achieve a sustainable current account balance and to raise investments, and therefore production and employment.
At this point, vital roles in boosting savings of our country fall upon the Private Pension System (PPS). The Private Pension System offers long-term financing capacity to capital markets while allowing people to live a more prosperous life in their retirement period. It contributes to active inclusion of the savings in economic operations by converting the savings into investment via financial system.
For this reason, Private Pension System has become one of the most significant instruments for increasing savings of our country and enriching our capital markets.
PPS progresses in our country with several leaps
2021 was recorded as a very exclusive year for the progress of the Private Pension System in Türkiye after implementation of the long-awaited significant regulations. It is unquestionable that the most exciting development for stakeholders of the industry was the removal of the age limit of 18. With this regulation, a big step was taken in spreading the savings toward the base further by bringing a new target audience to the industry. We believe as a result of the recent practices put into use that the new regulations such as escalation of the state contribution from 25% to 30% since 2013, granting of the state contribution to the collective contribution payments over the years, removal of the age limit of 45 in entering the Auto-Enrollment System (AES), the right of partial withdrawal from the system and transfer of the PPS contracts will bring a dimension to the industry.
In addition, it was allowed for the life and pension companies to offer different products such as retirement, life, personal accident, private health and supplementary health insurance in a package in 2021. Thus, the “Integrated Pension Plans” will pave the way for PPS to touch the lives of the participants in a more integrative manner.
The industry whose progress accelerated through these substantial leaps raised the total fund size, including the state contribution by 44% to TL 244.4 billion as of the year-end while the number of participants in PPS and AES exceeded 14 million. In life insurance branch, premium production rose by about 23% in 2021, reaching TL 17.7 billion.
We maintained our leading position in 2021
As Türkiye Hayat Emeklilik established upon the merger of three deep-rooted companies in private pension and life insurance industry in 2020, we exhibited a strong financial performance in the activity year of 2021. We boosted our total assets by 41% to TL 61.5 billion, and our shareholders’ equity by 35% to TL 3.9 billion. We crowned our sustainable growth with profitability by obtaining a net profit of TL 1.7 billion as of the year-end
Thanks to our robust financial structure and value-focused business models, we accomplished results in our business lines in accord with our objectives. By the year-end, we reached a market share of 21.6% with 4.4 million participants in PPS + AES and a fund size of TL 52.7 billion, including the state contribution, thereby maintaining our leadership.
When we look only AES data closer, the market shares of 31.6% and 54.5% which we achieved in terms of number of participants and fund size, respectively point out the unquestionable leading position of our Company. In life insurance branch, we kept taking the lead in 2021 with a premium production of approximately TL 4 billion and a market share of 22.2%.
We set to work on enhancing saving awareness in our country with a focus on sustainable savings, making PPS the first-preferred saving instrument and creating a quality and sustainable portfolio.
We continuously develop our value creation capacity
Following a successful merger process completed in a record period, we designated 2021 as the year of change and progress. As a company that serves through Türkiye’s widest banking distribution channel composed of the branches of VakıfBank, Ziraat Bank, Halk Bank, Vakıf Katılım, Emlak Katılım and Ziraat Katılım Bank, and agencies, we went through with the infrastructure developments needed to provide service at any level from the same screen by speaking the same language, and to offer our customers the most superior experience.
We set to work on enhancing saving awareness in our country, making PPS the first-preferred saving instrument and creating a quality and sustainable portfolio by taking advantage of the regulations carried into effect in 2021 and focusing on sustainable savings which is one of our strategic objectives. In July, we introduced our product developed for the participation of the young population aged under 18 in the system. We aim to add an alternative product with initial capital, and make the product more advantageous with exclusive additional benefits in 2022. With our active sales and marketing operations, we will raise the visibility of our powerful support for the future of our youth and children aged under 18. As part of the “Integrated Pension Plans” to be applied in the following period, we aim to bring the ideal product combinations in our current portfolio together and generate product packages for different customer segments
Our constantly-developed digital competencies enhance our competitive power
One of the long-term targets of our company is to enable our brand to make its name with technological advancements and innovations on an international scale. To accomplish our targets, we develop trailblazing initiatives to update our infrastructure and all processes with the mentality of data analytics-based digital management. We are transforming into a little more agile and flexible company each passing day as our management units strengthen through our digital competencies improved with the principle of optimization and automation. We perform our activities with a focus on taking part in every moment of our customers’ life cycles, offering them customized solutions meeting their needs, in our contact channels and providing experiences to them. Within this framework, we devise platform-based business models by means of ecosystem corporations as well as implementing the investments which aim at putting multichannel experience into practice ideally. With this understanding, we will put the digital platform into use for our customers in 2022.
Globalization Target
Transition to a platform-based business model brings the ability to operate without physically existing in other countries as well. Under the leadership of our principal shareholder Türkiye Wealth Fund, we aim to commence our operations, especially in the countries that involve Türkiye’s interests, with the different methods such as directly starting operation or acquisition as well as the platform-based business models
In 2022, we will keep working with the sense of responsibility for Türkiye, thereby boosting the added value we have created for our economy. With a focus on customer experience, and our innovative vision, we will continue to make our mark with the pilot applications that shape the industry and catch the era.
All of our stakeholders, particularly our experienced and dynamic employees will be our greatest assurance in reaching these ambitious goals. I would like to thank our stakeholders and our valuable colleagues who go a long way towards this path we have walked together.
Yours respectfully,
Atilla Benli
Vice Chairman and CEO