Welcome to Anadolu Sigorta 2024 First Quarter Earnings Call. Thank you all for participating our webcast. Today, we will be presenting our financial results, with our CFO, Erdem . I am going to hand over to Erdem , he is going to start the presentation, then I will be following with financial figures. At the end of presentation, we are going to have a Q&A session. Erdem , the floor is yours.
Thank you, Barış. Welcome to Anadolu Sigorta financial presentation, first quarter 2024. My name is Erdem Esenkaya. I would like to present especially two titles. The whole presentation will be three different titles, company and market overview, technical results, and financial highlights. Company and market overview and technical results, I will present to you. After that, my colleague, Mr. Şafak, will present the other title. I think it will take nearly 30 minutes. After that, you can ask any question by end of the presentation. When we look at the highlights of the sector. Sector on premium production reached at TRY 177 billion . If we compare the last year, 89.2% increase. Regulatory, I mean, the Insurance Regulation and Supervision Agency in Türkiye increases discount rate from 28% to 35% end of the year, and it affected first quarter of 2024.
In the motor branches, a special new calculation method enforced in May 2024. I mean, at the beginning of the year, authority regulator decided to 10% every month, I mean, January and February, and after that it discount 5%. Now, after April and at the beginning of the May, they will begin to calculate a new calculation method for the MTPL prices, and maximum will be the 3% increases MTPL prices in the next term. Government announced no mid-year minimum wage hike. It is important for us, especially, because it affect our reserves at the end of the year. Financial conditions, central bank increases policy rate 50%. It affects our financial incomes, of course. TL depreciation below CPI. I mean, depreciation 8.6% depreciation rate, but CPI 15% in this term. So, more valuable TL in this term, we can say.
BIST 100 index rise nearly 20% in 2024, first quarter. Next slide, please. When we look at the premium production figure, we can see easily that we are below the sector. Total non-life premium products, TRY 178 billion first quarter. Last year at the same term, it was TRY 92 billion . It shows nearly a 93% increasing. Anadolu Sigorta premium production increase rate lower than the sector premium production in the increased rate in this term especially, I can say. Top five companies have 49% and the top 10 companies have 71% market share in 2024, first quarter. As you see this page, Türkiye Sigorta is the first, Allianz Sigorta second, and Anadolu Sigorta is third. Degree of range is last year. Next slide, please.
When we look at the highlights of Anadolu Sigorta, core business, MOD claims ratio maintains 60%, and it is a good level for us, especially for the earning money and the profit. 2024 first quarter claims ratio nearly 70%, and a strong growth in health branches focused on corporate health policies in this term are very important for us again. MTPL is affect our financial statements, especially income side, very effectively. MTPL growth, 35% in 2024 first quarter, and discount rate 35% at the same time. We control the increased MTPL in this time. It is very important, again, our financial statement. Assets under management reached to TRY 36.4 billion in this term, additional TRY 4.4 billion first quarter. It added in this term, especially. Time deposit compound yield, 65%.
When we look at the highlights again, the branch breakdown and growth rate, Anadolu Sigorta and the sector, if you compare in the motor side, Anadolu Sigorta has 36% increasing. In the sector, 38% increasing. In the fire side, 21% increasing, and fire side in the sector, 18%. In the health side, we have the 20%, sector, 21%. If we look at the production increasing in the health, 131% increasing if you compare to last year. In the motor side, 42%, and the other side, 105% in the first quarter 2024. In this table, we can compare the premium production on Anadolu Sigorta and non-life sector. The totally our premium production increased 80%, and it reached TRY 16.5 billion end of the first quarter. But the non-life sector increasing rate, 93.1%, and nearly TRY 178 billion in this term. The market share.
When we look at the market share and rank, our company has succeeded in winning two first places, three second places, and four third places in main branches. We can see here. In the Watercraft and MOD, we are the first rank in this term, end of the first quarter. Especially the MOD side is very important for earning money and the profit for us in this term. When we look at financial status and net profits drivers side, activity results of our company are exempt since our assets, TRY 68 billion , we can increase the nearly 96% increasing in this term. The premium production reached TRY 16.5 billion and 80% increasing compared to previous year.
As a result of premium increase realized or increase, it is market share that reached the level of 9.3%, and our company realized TRY 2.9 billion is nearly the consolidate and unconsolidate profit similar in this term. When we look at the distribution channel of the Anadolu Sigorta and the sector and compare them, we have got nearly 2,700 agencies and 1,100 İşbank branches. We can say the widespread network all of country with these channels. It is very important side of our sector power. There are nearly 350 direct sales staff, we say MSU, they are working in İşbank branches, and they especially affect our premium production positively. If we compare to last year, actually our company is the agency tendency company. Last year, our premium production percentage, 63% in the total premium production.
While this year, the agency side, 58%, and 7% decreasing or minus if we compare to last year. At the same time, in the bank side and the broker side, there are increasing in this term. If we compare the company in the sector, we are again in the agency side, we are over the sector, and in the bank side, in over the sector, at broker side over the sector. But the other side, lower than the sector. Next slide, please. When we look at the technical result in the side, first, patches. Next slide, please. Okay. Accident and health, both of them are important branches for us. If we look at the accident side, gross premium written, 111% increase, premium production increase. Net claims increased percentage, 33.4%, and combined ratio, 7.2% increase in this term.
Health branch is a very strategic branch for us, and we will be planning to grow in this site, especially. You can see easily here, 130.6% increase in gross premium written. It affect, of course, the claims net 173% increase in this term, and the combined ratio, 22% nearly increase in this term. Next slide, please. MOD and MTPL. MOD gross premium production written in this term, 47% increase in this term, and claims net, 92.5% in this term, and the combined ratio, 9% increase. But in the next term, we will control it, and we would like to improve our written premium in this branch. MTPL side is, again, very important, our financial statement. If you compare to last year, 25.5% increase in written premium. The claim is 18.4% in this term, and the combined ratio, 124.7% decrease in this term.
It is a very good effect on our financial statement in this term. Next slide, please. Yes. Fire and natural disaster and the general losses together when we compare them. Fire side in 122% increase in premium production, and claims net, 62.5%, and the combined ratio, 14.4% increase in this term. General losses, premium written, 96.2% increase, and claims net, 200%, and the combined ratio, 10% in this term. When we look at the profitability and combined ratio, as you see, our combined ratio is decreased from 125.6% to 100.4% in this term. The claim ratio, again, decreased 98.7% to 69.5% in this term. We would like to control our claim ratio and the total combined ratio, and we would like to decrease our combined ratio lower than the 100% in next term.
We'll look at very important our profitability and a very good financial statements end of the year. In this subject, I would like to give center to my colleague, Mr. Şafak. Thank you.
Thank you, Erdem . I am going to continue from now on with financial highlights. To begin with, you might see our summarized figures of our balance sheet. On the left-hand side, total assets trend can be seen. In the first quarter of 2024, the increase was 18%, and our total assets was TRY 68.9 billion . Our assets under management growth was 20%, a bit higher than our assets growth, and it reached to TRY 36.4 billion . On the right-hand side, it is the liabilities part, and technical reserves is the biggest portion of our liabilities. The growth rate was 9%, and the amount was TRY 39 billion at the end of first quarter. The growth rate was rather smaller than our assets growth, mainly due to discount rate increase from 28% to 35%. It affected our liabilities.
Because of this high discount rate, the reserves increase was relatively lower than our assets. Shareholders' equity growth was also strong with 21.4% in the first quarter, and it reached to TRY 17.2 billion . On the next slide, you are going to see our summarized income statement. First quarters compared, 2022 first quarter and 2024 first quarter Q on Q table. On the left side, our unconsolidated figures can be seen, and on the right-hand side, our consolidated figures. As you see at the bottom of our table, 2024 Q1, both consolidated and unconsolidated figures are same because Anadolu Hayat consolidation didn't affect our P&L in the first quarter this year. Our technical income growth was 102% in the first quarter, and our technical income reached to TRY 9 billion .
Our technical expenses increase was much lower than our technical income, 62%, thanks to, again, discount rates in this lower increase. Our financial income in the first quarter reached to TRY 3.6 billion with a growth rate of 416%. At the end of table, our net profit stood at TRY 2.9 billion . It was a loss-making quarter last year. As you see, in solo form, it was -117, and in consolidated form, our profit, our loss was TRY 138 million last year. Our income statement breakdown of non-technical side can be seen in this slide. On the right-hand side, as you see, our technical earnings, technical figures was almost breakeven. It was TRY -71 million . Other than technical side, our non-technical P&L figures were investment income was TRY 3.9 billion . We had a dividend income from Anadolu Hayat, TRY 200 million.
Our amortization provisions and rediscount of our receivables, and other expenses made around TRY 400 million in minus form, and our tax was TRY 753 million , and that made our net income reach to TRY 2.9 billion. Our trend of return on average equity, it has a significant increase in first quarter. We are calculating it with 12 months trailing profit, and our unconsolidated return on average equity reached to 73%, and our consolidated return on average equity was 90% in the first quarter this year. Last slide shows our investment portfolio breakdown, which is around TRY 36 billion. Most of our investment is invested in funds. 44% is invested in mutual funds. We have 29% bonds, both corporate and sovereign bonds. Most of our bonds are Eurobonds, in USD form.
We have 7% stock portion, and deposits had been increasing in the last couple of months or last couple of quarters maybe, and it is 22% at end of first quarter. We had an investment income, which TRY 3.6 billion and our annualized yield of our portfolio was 45% in the first quarter. As I mentioned, this was our last slide. Thanks for listening to us again. Now we can continue with the Q&A session. If you have a question, you can just write your question to our chat box, or you can raise your hand, and we are going to unmute your microphone so that you can ask your question verbally. If you have any questions, please go ahead.
Hello?
Hello. We have a question from Sahil Kumar, I guess. Yes.
Hi. This is Sahil from Moon Capital. First of all, congratulations for the results.
Thank you.
My question is on your investment yield and AUM growth. Investment yield is around 48% in the first quarter, right?
Yes, very much.
Whereas, I think approximately 40% of your AUM is into mutual funds. The market was up around 20% during the quarter. Could you please explain me what drive that 48% yield in the first quarter, and what we should expect as we progress? Obviously, some of the things are linked with market, obviously. But overall, what are your general expectations for the next quarter?
For investment yields-
Yes
Are you asking, Sahil? Yeah, okay. We consider that these higher deposit rates to continue throughout the year. Most of the market's expectations is in that way actually. Market does not expect a rate increase until last quarter of this year like we do. We assume that we will be taking advantage of higher deposit rates with growing portfolio and investing more into deposits or funds, money market funds as well. We consider that our return, our yield is going to be affected positively throughout coming quarters.
Okay. And your AUM composition, given you expect yield to remain, the rates remain higher, at least on the deposit side. Can we expect higher allocation to deposits at these levels or what sort of AUM composition to expect?
Yes, we can expect. Actually, most of our fund portfolio is also invested in money market funds, so our maturities are much shorter compared to time deposits because we are not urging. We are not hurrying to make time deposits with longer maturities. But nowadays, we do actually, maybe three months, six months, time deposits are a bit more attractive nowadays. We can see a higher deposit portfolio.
Understood. I think just one more question from my side is on the combined ratio. Obviously, first quarter combined ratio was lower, around 100%, because of the discount rate increase. In the management commentary, you are expecting less than 100% in the coming quarters as well. Maybe if you can guide me, like what we should expect overall for combined ratio, maybe how the quarter is progressing, the second quarter is progressing so far, and what we should expect for the rest of the year. Thank you.
Yes. Especially we have got a good combined ratio end of the first quarter. Of course, it affect our discount rate effect here. This is realistic. But at the end of the year, we are planning to lesser than this combined ratio because we would like to control our claim ratio and the claim side very closely. It is very important for us, especially for getting, earning money and profit in this term.
But of course, as you have also mentioned-
MOD side, very important for us. On the other hand, we are very controlling in increasing in MTPL side. health side is very critical and strategic for us. If we think that three of them, end of the year, we will the control or combined ratio near the 100 and below the 100%. After that, it will good effect our financial statement end of the year. We are thinking that.
Perfect.
Pardon Barış?
We should underline, as Sahil also mentioned, it's important, of course, the one-off effect of discount rate. It decreased our combined ratio for the first quarter. One of the effects is not going to happen in the upcoming quarters, in second or third quarter. We are not going to see something like that. We think so. We do not expect another rate hike, another discount rate hike, actually. We should bear that in mind. Sorry.
Understood. Just one final follow-up on the combined ratio. First quarter, obviously, combined ratio include this discount rate increase. If we keep the discount rate at 28%, what would be the first quarter combined ratio without that, excluding the discount rate impact?
Nearly as the same year, approximately.
Sorry, similar to what?
Similar to last year, same term. I mean 125%, something like that. Nearly.
Understood. Okay. Thank you.
I think we don't have other questions, do we? There's no written question as well. If you have any questions, you can write to chat box or you can raise your hand. Since we don't have any other questions, Erdem , floor closes. Back to you.
At the end of the weekdays, I'm in the end of the rush hour now, in Türkiye, especially 6:00 P.M. Thank you very much for joining this webcast. We would like to meet together in the next presentation, end of the first half. Thank you very much for joining again. Have a good day. Thank you.
Thank you. See you in next quarter.