Aksigorta A.S. (AKGRT TI) - Tailwinds from investment gains: Maintain Hold
Aksigorta announced 4Q18 NI of TRY62m (-10% q-q, +52% y-y) vs our TRY71m estimate. Its investment portfolio (TRY2b) gains largely supported 4Q earnings. Net investment income margin surged to 13% from 6% a year ago on high TRY deposit rates. Aksigorta delivered a technical loss of TRY37m in 4Q as its combined ratio rose to 108% (18YE: 100%) from 98% a year ago with a 4pp y-y drop in premium retention. This is mainly on higher claim frequencies at motor-own-damage (MOD). Provisioning reserves, on the other hand, expanded due to market share gains in motor third-party liability (MTPL) and higher claims in MOD. Trailing ROE was high at 35% in 4Q, while 18YE ROE reached to an eye-catching 34% (17YE: 23%). Aksigorta has announced to distribute TRY0.66/sh. Dividend on 07 March, implying a 17% yield.
Aksigorta is an international insurance group. Co.'s main operations include insurance activities based on non-life insurance branches, including primarily fire, marine, personal accident, engineering, agriculture and health. Co. focuses its business activities in Europe and Asia, which are grouped around four segments: Belgium, U.K., Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with financial institutions and key distributors around the world. Co. operates in Turkey.
TEB Investment equity research analysts and strategist team consists of 8 analysts with an average finance sector experience of 15 years and special focus on international investors.
With our 6 equity research analysts we cover 93 companies across 21 sectors, reflecting 80% of the total market capitalization of all BIST companies and 86% of the BIST100 companies. Our strategy team provides in depth top-down and bottom-up market views with insight on FX and bond markets by publishing sectoral and strategic reports both in English and Turkish.
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