The 32 Billion Lira Question: Unpacking the Hidden Resilience of Anadolu Sigorta’s 2025 Performance

1. The Art of Predicting the Unseen

To the casual observer, the insurance business is a simple exchange: premiums collected today for protection promised tomorrow. However, the 2025 Consolidated Financial Report of Anadolu Sigorta reveals a sophisticated machinery of “best estimates” navigating a volatile Turkish landscape. While the company reported a robust net profit of 13.4 billion TL, the narrative transcends this headline. It is a story of how a centennial giant utilizes actuarial foresight to manage massive, invisible liabilities while fortifying its market dominance.

2. The Invisible Bill: The 32.7 Billion TL “Ghost” Liability

The most defining figure of 2025 is the 32,782,498,048 TL set aside as a net provision for claims Incurred But Not Reported (IBNR). This “ghost” liability represents the company’s commitment to losses that have occurred but are not yet processed. Driven by the actuarial chain ladder method, this projection is particularly weighted by the “Zorunlu Trafik” (Compulsory Traffic) branch, which alone accounts for 17.1 billion TL of the net IBNR.

Independent auditors at PwC (led by Ramazan Yüksekkaya) designated this a “Key Audit Matter” due to the significant judgment required:

“The reason for our focus on this area… is the numerical significance of the incurred but not reported (IBNR) claim provision within the consolidated financial statements and the fact that these provision calculations contain significant actuarial judgments and estimates by their nature.”

3. The Interest Rate Seesaw: Fortifying the Balance Sheet

A critical technical adjustment significantly altered the 2025 bottom line. Per Footnote 2.25, the discount rate for net cash flows from claims was lowered from 35% to 29%. In the inverted world of actuarial math, lower rates increase the present value of future liabilities.

This shift mandated a net claim provision increase of 1,914,189,740 TL. Far from a mere loss, this adjustment represents a conservative reserve-building exercise. By absorbing this 1.9 billion TL cost now, Anadolu Sigorta is essentially fortifying its balance sheet against future volatility, ensuring a cleaner runway for 2026.

4. A Masterclass in Scale: The Distribution Moat

Anadolu Sigorta’s dominance is anchored in an operational scale that serves as a formidable moat for the Türkiye İş Bankası Group. The company is vertically integrated within a unique power structure: it is 57.31% owned by Milli Reasürans T.A.Ş. and indirectly controlled by İş Bankası. This ecosystem is supported by:

• Investment Surge: Financial assets jumped 44%, rising from 37.4 billion TL to 54.0 billion TL, serving as the primary engine for technical income.
• Distribution Power: A network of 3,280 agents, comprising 3,139 authorized and 141 unauthorized partners.
• Asset Magnitude: Total assets reached a staggering 128,693,250,391 TL.
• Human Capital: An average of 1,853 employees managing complex multi-branch operations.

5. Navigation Through the “Inflation Accounting” Vacuum

Despite the high-inflation environment, Anadolu Sigorta did not apply TMS 29 inflation accounting for 2025. This was a strategic adherence to SEDDK Circulars 2023/30, 2024/32, and 2025/33, which postponed the application of inflation accounting for the sector. Analysts must therefore view the 13.4 billion TL profit as a nominal figure; it represents significant growth, yet remains decoupled from real-value preservation metrics that TMS 29 would have provided.

6. Taxation and Fiscal Mandates

The fiscal landscape for Turkish insurers remained rigorous in 2025. Driven by Law 7456—enacted for earthquake recovery—Anadolu Sigorta faced a heightened tax burden compared to standard corporate entities:

7. Conclusion: The Forward-Looking Balance Sheet

The company entered 2026 with two massive signals of confidence. First, it completed a quadrupling of its paid-in capital, jumping from 500 million TL to 2 billion TL through internal resources. Second, it distributed a 2.1 billion TL cash dividend in March 2025, demonstrating an ability to reward shareholders even while navigating a high-inflation vacuum and aggressive reserve fortification.

In an industry where the heaviest weights are the ones you cannot see, Anadolu Sigorta has bet that its greatest asset is not just its capital, but its ability to accurately price the unknown. The question for 2026 remains: will this conservative posture today yield the industry’s highest premiums tomorrow?

Briefing Document: Consolidated Financial Analysis of Anadolu Anonim Türk Sigorta Şirketi (2025)

Executive Summary

This briefing document provides a comprehensive analysis of the consolidated financial position and performance of Anadolu Anonim Türk Sigorta Şirketi (“the Company”) for the fiscal year ending December 31, 2025. Based on the independent audit conducted by PwC, the Company maintains a robust financial standing with a significant increase in total assets and net profit compared to the previous year.

Critical Takeaways:

• Audit Opinion: The Company received an unmodified (clean) opinion, stating that the financial statements fairly represent its financial position in accordance with Turkish insurance legislation and Financial Reporting Standards.
• Net Profit: The Company reported a consolidated net profit of 13,431,245,293 TL for 2025, an increase from 11,538,847,383 TL in 2024.
• Asset Growth: Total assets grew to 128,693,250,391 TL by year-end 2025, up from 89,267,931,589 TL at the end of 2024.
• Key Audit Matter: The estimation of Incurred But Not Reported (IBNR) claims remains the primary area of focus due to its high level of actuarial judgment and its material impact on the financial statements, totaling a net provision of 32,782,498,048 TL.
• Capital Strength: Shareholders’ equity rose to 35,553,399,346 TL. A significant capital increase occurred during the period, raising paid-in capital from 500 million TL to 2 billion TL via internal resources.

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1. Financial Performance and Technical Results

The Company demonstrated strong operational growth in its core insurance activities, primarily within the non-life segment.

1.1 Technical Income and Premiums

• Gross Written Premiums: The Company generated 97,883,127,381 TL in gross written premiums, compared to 69,589,122,185 TL in 2024.
• Net Earned Premiums: After deducting reinsurer shares and Social Security Institution (SGK) transfers, net earned premiums stood at 63,441,226,432 TL.
• Non-Life Technical Balance: The technical profit for non-life operations reached 18,161,904,831 TL, showing steady improvement over the 14,992,793,547 TL recorded in the previous year.

1.2 Investment Performance

Investment activities significantly contributed to the bottom line, despite volatile market conditions.

• Total Investment Income: Calculated at 33,987,343,932 TL.
• Key Drivers:
  • Income from financial investments: 10.0B TL.
  • Foreign exchange gains: 9.9B TL.
  • Valuation of financial investments: 9.0B TL.
• Transfers: A total of 24,287,514,460 TL in investment income was transferred from the non-technical section to the technical section.

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2. Balance Sheet and Capital Structure

The Company’s balance sheet reflects substantial liquidity and a strengthened capital base.

2.1 Asset Composition

2.2 Equity and Capital Changes

• Paid-in Capital: Increased to 2,000,000,000 TL (from 500M TL). This 1.5 billion TL increase was funded entirely from 2024 profits and registered on September 17, 2025.
• Total Equity: 35,553,399,346 TL, which includes 13.4B TL in period net profit and 18.9B TL in profit reserves.
• Ownership: The Company is a part of the İş Bankası Group. The major shareholder is Milli Reasürans T.A.Ş. (57.31%), with the remaining 42.69% being publicly traded.

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3. Critical Accounting Estimates: IBNR Provision

The estimation of Incurred But Not Reported (IBNR) claims is the most significant actuarial challenge. As of December 31, 2025, the Company set aside a net IBNR provision of 32,782,498,048 TL.

3.1 Actuarial Methodology

• Methods Used: The Company employs Actuarial Chain Ladder Methods (Standard and Bornhuetter-Ferguson) to estimate final loss ratios.
• Key Branches:
  • Compulsory Traffic: Gross IBNR of 20.8B TL.
  • General Liability: Gross IBNR of 8.6B TL.
  • Discretionary Financial Responsibility: Gross IBNR of 7.5B TL.
• Discounting: Following Circular 2025/32, net cash flows from outstanding claims were discounted using a rate of 29% (down from 35% in 2024). This change in the discount rate resulted in an increase of 1,914,189,740 TL in net outstanding claims provisions.

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4. Regulatory and Compliance Environment

4.1 Inflation Accounting (TMS 29)

Despite the high-inflation environment, the Insurance and Private Pension Regulation and Supervision Agency (SEDDK) issued several circulars (2023/30, 2024/32, and 2025/33) deciding that inflation accounting (TMS 29) would not be applied to the 2025 financial statements for insurance, reinsurance, and pension companies.

4.2 Taxation

• Corporate Tax Rate: Under Law No. 7456, the corporate tax rate for insurance companies is set at 30% (compared to the general rate of 25%).
• Deferred Tax: The Company reported a net deferred tax asset of 385,519,857 TL.

4.3 Employee Benefits and Pensions

• Pension Fund: Employees are members of the “Anadolu Anonim Türk Sigorta Şirketi Memurları Emekli Sandığı.” Actuarial evaluations as of year-end 2025 indicate no deficit in the fund based on the 9.80% technical interest rate prescribed by law.
• Severance Pay: The liability for severance pay is calculated using an interest rate of 3.92% and a salary/ceiling increase expectation of 10.30%.

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5. Corporate Governance and Personnel

• Staffing: The average number of personnel increased to 1,853 in 2025 (from 1,797 in 2024).
• Executive Compensation: Total benefits provided to the Board of Directors and senior management amounted to 157,341,813 TL for the period.
• Network: The Company operates through 10 regional offices, one sales center in Gaziantep, a branch in Northern Cyprus, and a network of 3,280 agents.

6. Conclusion

The 2025 consolidated financial statements depict a company with significant growth momentum and a healthy technical balance. While the insurance sector faces complexities regarding long-term liability estimations (IBNR) and shifting discount rates, the Company’s strong equity position and support from the İş Bankası Group provide a stable foundation for future operations. Management’s decision to triple the paid-in capital from internal sources further underscores its commitment to maintaining a robust capital adequacy ratio.