Hello, everyone. Thank you for participating our Third Quarter Financial Results Webcast. As you know, we will be making the presentation with Erdem Bey, our CFO. He is going to start the presentation, and I am going to continue with financial figures as always. Erdem Bey , the floor is yours.
Thank you, Barış. Welcome to Anadolu Sigorta financial presentation of 2024 Q3. My name is Erdem Esenkaya. Our presentation has three different titles: company and market overview, technical results, and financial highlights. I will present company and market overview and the technical results. After, my colleague, Mr. Şafak, will present the financial highlights. I think that it will take nearly 40, 45 minutes. If there is any question, we will pleasure to answer it. First of all, we would like to talk about first nine months, especially the highlights. I think that the most important issue on the agent of world economies in the third quarter was the moves of central banks to reduce interest rates in the world. It was very important. When we look at Türkiye in this position, closing the second quarter of 2024, 71.6% headline inflation fell down to 49.4% in the third quarter.
A negative real interest rate trend, on the other hand, fell from 50% in June to 33.1% in September, maintained 38% level for the end of 2024 and its inflation report, it shifted the emphasis to 34%. The year 2024 end of the inflation target 41.5% and market expectation that interest rate cuts will begin in November seems to have been postponed following the 2.9 or 3 percentage monthly increase in September, which is above expectations, or expectation especially. While the cooling in the economy strongly felt the manufacturing industry and rigidly experienced the services side continues to remain the most important obstacle, the decline of inflation in this term. When we look at company and overview, first of all, the sector. Sector prem production at TRY 501 billion and 73.6% increase last year, and growth above CPI is 16%.
When we look at the motor branches, MOD and MTPL side. New calculation method in 4 September 2024, 2%. MTPL policy is being sold at cap prices in this term. When we look at the financial conditions, Fed cuts rates by 50 bps and the central bank rate cut expectations delayed after September CPI. Istanbul Stock Exchange 100 returned the US dollar terms 100 zero. I mean, there is no move in 2024 third quarter. When we look at the top 10 non-life companies in the sector, we can see easily that we are below the sector here. It shows nearly 74% increasing in the sector. Total non-life prem production TRY 501 billion in third quarter. Last year the same term it was TRY 289 billion . It shows nearly 74% increasing. Anadolu Sigorta prem production increase rate is lower than the sector prem production increase rate.
When we look at the pie chart, we can see the distribution of production. Türkiye is the first, Allianz is the second, and Anadolu Sigorta is the third production share in the sector, the 9.3%. Next slide, please. When we look at the highlights in Anadolu Sigorta, core business strong growth in five branch, 73% is very important for us. Fire and natural disaster combined ratio, last year it was 134%-135% approximately. This term, 91.5%, and it is a good increasing or developing for us. Bancassurance premium above sector average of course, affect our financial statement positively. MTPL premium growth, 52% in 2024 ninth month. We are continuing the increasing premium production here, but we are trying to control it. MTPL claims ratio, 98.6%, and last year in this term, 137%.
This developing rate is very important for us again, because the control of the claims ratio. When we look at the AUM, reached nearly TRY 15 billion, an additional TRY 8.3 billion in Q3. Time deposit compound yield, we can say the 63%. Low volatility in fixed markets and nearly 6.7% depreciation against the currency basket in three quarter. Next slide, please. When we look at the highlights, branch breakdown and growth rate, especially in the health branches, is very important again this term. When we compare the last year, the same term and the sector, if you look at this term, 135% increase, lower than the last year, but higher than the sector in this term. In the motor side, we are increasing the 42% and last year, 68%.
A little bit, we are lower than the sector, but we are again the number one in this section. The other side, 67% increased and sector nearly 120% increased in this subject. When we look at the premium production here, actually we are totally in the sector, 74% increased and our production increased 63.4% and nearly a 9 point decreased or below the sector. But we are trying to control improving premium production. Next slide, please. When we look at the market share and the rank, you can see the 12 different branches here and most of them, we are in three in these branches, especially MOD and watercraft, we are the number one. Fire aircraft, general assistance, transportation, and aircraft liability, we are the second degree. Accident health, general liability, we are the third degree.
Totally, we are the 9.3% market share and third degree in the sector. Next slide, please. When we look at the financial status and activity results of our company are exempt, it is in that assets exceed TRY 84.6 billion and it is quite increasing if we compare the last year. Premium production reached TRY 46.5 billion with an increase, 63.4% compared to previous year. Our market share, 9.3%. Our company realized TRY 7.9 billion in the unconsolidated net profit and net profit unconsolidated financial statement, TRY 8.3 billion. When we look at the distribution channels, we have got 2,700 agencies and nearly 1,000 bank agencies. We can say the widespread network all country, this is very important site of one of sector power, marketing power especially. There are nearly 300 direct sell staff, we say MSU.
They are working in each bank branches. After these distribution channels, when we look at that, we are the, again, agency tendency company, and we are the higher than the sector, 62%. When we look at the sector, 59% and 3 points more if we look at the sector. On the other hand, the bank side is very attractive and very take attention position, because the nearly 2 points increasing in this term. On the other hand, the broker side, 3 points increase in this term too. Direct sales and others distribution channel, 9% in this term. Next slide, please. Technical results, accident and health. When we look about the third quarter, 85.6% premium production increasing in this term, and the net claims net decreased 23.8% in this term, and the combined ratio 15.5 point decreased. It is a good result for us.
In the health side, health branches is very strategic branch for us, and it is very important for our middle way strategy, especially. When we look at the premium production, 137, 38% increase, and the claims net, 175% approximately, and the combined ratio increased nearly 10 points. It isn't strategic, but at the same time, the combined ratio and the claims net is higher than the last year. But we accepted some claims net here and the combined ratio here. Next slide, please. Amity side is important on the other hand because we are earning money, and it affects our profit positively. In third quarter, 23.2% increased, and the claims nearly 5% increase, and combined ratio, 1 point in this term. MGPS side is again improving in this side, but we are controlling improving, as I can say.
Premium production increased 44.3%, and the claims 64%, and combined ratio, 13-point increase in this term. Next slide, please. Fire and natural disaster side is very important and affect our financial statement positively because the premium production increased nearly 55%, and the claims net 90%, combined ratio 44 point decreased. It is a very good result for us, especially. General losses, premium production, nearly 7% decreased, and claims net, 12.6% increase, and the combined ratio 20.3 decreased. Next slide, please. The combined ratio, when we look at the combined ratio, first of all, the claim ratio is very important because the last year it was 88.2, but this year to 73.1. When we look at the combined ratio, 113.6 last year and 102.2 this term. It's quite positively improving for us. Of course, this improving affected all financial statement positively, as I said before.
Next slide, please. Now thank you very much for listening. I would like to give centers my colleague, Mr. Şafak. Thank you.
Thank you very much. I am going to continue with financial highlights, starting with balance sheet. On the left-hand side are assets, and on the right-hand side, you can see our liabilities, the biggest financial figures. Our assets in the first nine months of the year increased with 45%. We reached TRY 84.5 billion . Our assets under management portfolio had a significant increase as well, which was above total assets increase. The growth was in nine months growth, 55%. Our AUM reached almost TRY 50 billion . Our technical reserves increase was a bit lower than our AUM. As you see, it was 24%, and we booked some reserves, like TRY 44.5 billion . Our shareholders' equity increase was also strong. It was 95%. It was TRY 26.6 billion at the end of nine months.
We can say Anadolu Hayat mcap increase had a significant impact in our shareholders' growth. Of course, our net profit, which was almost TRY 8 billion , has a weight in the increase of our shareholders' equity. On the next slide, we have our nine months income statement summary, both unconsolidated and consolidated. We use equity pickup method for Anadolu Hayat. As you know, we have 20% stake of Anadolu Hayat, so we do consolidate Anadolu Hayat with equity pickup method. On the left-hand side are unconsolidated figures you can see nine months. Our technical income increase was 79%. It was similar in consolidated form. Our technical expenses growth was 61%, again, similar in consolidated. Net financial income increase was 21% in the unconsolidated form.
So after tax deduction, our net profit increase was 45% in the first nine months of the year. On the next slide, you can see our quarterly QoQ comparison. Both again, similar like the previous slide. On the left-hand side, you see our unconsolidated figures, and right, consolidated figures. QoQ comparison technical income grew 68%, technical expenses 70% in the third quarter of this year compared to last year's third quarter. Net financial income was stronger than previous years. It was TRY 3.8 billion in solo and TRY 3.9 billion in consolidated P&L. After tax deduction, our net profit was TRY 2.4 billion in the third quarter of this year, solo figures, and consolidated figures was TRY 2.6 billion in third quarter 2024.
Next slide, we give the breakdown of our financial side. On the right-hand side, you see our technical earnings. Our technical side profit was below breakeven, very slightly below breakeven, TRY 650 million . Investment income was TRY 11.8 billion, and we have some other figures, amortization, provision for bad debt, and rediscount, and our tax expense was TRY 2.4 billion, and net income stood at TRY 8.9 billion as you know.
On the next slide, we do show you our return on average equity. There was a peak at the end of first quarter. Now, our 12 months trailing profit we should underline, our consolidated return on average equity was 61%, and our solo unconsolidated return on average equity was 44.4%. On the last slide, our investment portfolio breakdown can be seen. As you know, we have something like TRY 50 billion AUM at the end of third quarter. 23% of them is invested in bonds, 34% mutual funds, 11% is invested in stocks, and we have deposits just above 30%.
First nine-month result, our portfolio return was 34%, not annualized, only nine months portfolio return. This was all from our side for our third quarter results. We can proceed with Q&A questions if you have any questions. Thank you for listening and participating our webcast. Back to you for your questions. You can write your questions to the chat box. We can read and answer them, reply them. You can raise your hand also as well, so we can unmute your microphone so that we can ask verbally. Thank you again.
Hello?
Hello, Sahil.
Hi, this is Sahil from Moon Capital. I have one question. Historically, in the past, we have seen the discount rate increase because of the higher inflation, higher interest rate, so the discount rate increased in the previous periods. Now, at some point, we will be heading into a rate cutting cycle. How do you see the discount rate in this scenario when we see lower inflation, lower interest rate? With that discount rate cut, obviously the reserve requirement would increase. How do you see that play out and the overall sector and for Anadolu Sigorta as well?
Yes. With the rates coming down in the coming year, probably, we are going to be expecting discounts in the discount rate as well, but we expect a gradual discount decrease in 2025 and also the following years. I may say with our portfolio, especially in MTPL coming down, we are going to be impacted, affected minimum from this discount rate, I may say, for 2025. Also we should also keep in mind that we expect a gradual, not a very strong discount rate decrease in 2025. Also we should also consider that net profit for Anadolu Sigorta has significantly risen. That's another point for the smaller effect that we expect coming from discount rates in the following year, Sahil.
Yeah, that's very clear. Looking at your financials, you have been well-placed with the discount rate decrease going in the future periods. For the overall sector, obviously, smaller companies usually rely on MTPL products, right, to have their AUM and to have the investment income. How do you see the overall sector provisioning level, and what would be the impact on the smaller companies? Do you think there will be more consolidation in the sector, or how this would play out for the overall sector, in your opinion?
Well, we have been- I think- Pardon, Erdem.
It's not easy to say about the sector, but the small companies selling the MTPL site and inexpensively or the aggressive prices in the sector because they need the cash flow in this term. As you see, this year, there is the hike interest rate, get good income for the financial statement, but the next year it will be down. Of course, it will affect their financial statements negatively. It depends on the clients. I think it will be difficult to compensate the clients next year.
On the other hand, the capital adequacy rate will be down for them, I think so. Next year, if you don't get any financial income, you need to earn money from the technical side, and it depends on the technical knowledge and technical history. I think it will be the difficult scenario, and it will be a difficult term for them. Is it clear, Sahil?
Understood. Yeah, obviously those who can survive can take the market share versus the smaller players, so.
Yeah, because the capital adequacy rate, it is very difficult to get enough range next year for them. I think so. I thought.
Sure. Understood. Thank you.
[Non-English content]. Would you say anything? Because I got your speaking. Will you add anything for Sahil?
You told what I was going to say, Erdem Bey. We do not have any other questions as far as I see. I am rechecking that. No written questions as well. Erdem Bey, back to you for closure.
Thank you very much for joining this presentation. Next year, it will be very important year for us. Yesterday, we celebrated the Turkish Republic, and 101 years old. Nearly one month ago, we celebrated 100 years for Türkiye İş Bankası. Next year will be the 100 years for us. So 2025 is very important year for our company, for us especially. We would like to make a good sign in this term. We would like to see a better financial statement and better conditions next term. Thank you very much for joining.
Thank you very much.