The most honest line in Anadolu Sigorta’s first-quarter report is not the profit line. It is the line saying the combined ratio rose to 114.8%. In other words, the policy book cannot pay claims and expenses on its own. A few pages later, the same report places another number on the table: TL 7.59 billion of investment income transferred to the technical segment. Without that income, Anadolu’s insurance machine would have looked less like a shining engine in the first three months of 2026 and more like one under strain.
That is why the ANSGR story cannot be dismissed in two sentences. The company produced TL 29.57 billion in premiums, preserved roughly an 8.7% share in the non-life market, and lifted consolidated net profit to TL 3.46 billion. These are strong numbers. But in the same quarter, for net technical profit to reach TL 4.75 billion, investment income had to put TL 7.59 billion of shoulder under the technical segment. Insurance profit is coming not only from pricing discipline, but from the securities and deposits in the vault doing their work.
| Line item | 2025Q1 | 2026Q1 |
|---|---|---|
| Technical balance before allocated investment income | TRY -1.37bn | TRY -2.84bn |
| Investment income allocated to technical section | TRY 4.34bn | TRY 7.59bn |
| Net technical profit | TRY 2.98bn | TRY 4.75bn |
The Naked Policy Under the Profit
Anadolu Sigorta’s economic machine is simple: it collects premiums, carries claims reserves, and operates the financial asset pool created by those reserves and its equity. In high-rate periods, this model can look very powerful. In 2026Q1, cash and cash equivalents stood at TL 39.00 billion, while financial assets and financial investments whose risk belongs to policyholders stood at TL 53.42 billion. That scale shows the company comes to the claims table not only with premiums, but also with an investment book.
But the naked policy account is more uncomfortable. Earned premiums were TL 19.17 billion, incurred claims were TL 15.60 billion, and operating expenses were TL 5.65 billion. The total claims-to-premium ratio appears broadly in line with last year at 81.4%; the real deterioration is in the combined ratio: from 110.7% to 114.8%. This says the technical result did not improve at the insurance core, and that investment income was spread over the report like a blanket.
The company’s own first-quarter activity report does not hide this reality. In the first three months of 2026, before income and expense allocation to branches, there was a TL 187.8 million technical loss. General expense allocation created a negative effect of TL 2.66 billion. Then TL 7.59 billion of investment income was transferred to the technical segment, and net technical profit became TL 4.75 billion. For an insurer, this does not have to be a bad structure; float works exactly this way. But a combined ratio that cannot stand without investment income does not earn a stock a permanently high multiple.
The Motor, Health, and Fire Tables
The picture gets sharper by branch. The combined ratio is 145.1% in motor liability. It is 168.2% in general liability. In sickness-health, it is 115.4%. In fire and natural disasters, 121.8%. These ratios say premium growth alone is not victory. Growing is easy; pricing claims correctly is hard.
| Combined ratio | Read-through | |
|---|---|---|
| Total | 114.8% | Premiums do not carry claims and expenses by themselves |
| Motor liability | 145.1% | Main source of the technical strain |
| General liability | 168.2% | Small line, severe claims and expense pressure |
| Health | 115.4% | The largest premium line is not technically comfortable |
| Fire and natural disasters | 121.8% | Growth exists, pricing is still being tested |
| Motor own damage | 101.3% | Just above the break-even threshold |
Motor liability is especially important. The company produced TL 3.60 billion of premiums in this branch, but the branch posted a TL 1.67 billion net technical loss. General liability is a smaller table, but a 168.2% combined ratio is a warning light. Health is the largest source of production: TL 9.42 billion in premiums, 31.9% of total production. Growth in health is 46.6%; the combined ratio is 115.4%. One of the fastest-growing books is also not carrying technical profit on its own.
The good news here is that Anadolu Sigorta is not facing this difficulty with weak capital. In the regulatory calculation, required equity is TL 23.02 billion; accepted equity is TL 21.44 billion above that amount. This buffer is useful not for discussing a bad quarter, but for discussing a bad trajectory. So the question is not whether the company will run into a capital problem tomorrow morning. The question is how much of the capital surplus will be spent while waiting for real underwriting repair.
The Anadolu Hayat Shadow and the İş Group Table
In the consolidated statements, Anadolu Hayat Emeklilik stands like a small but critical shadow. Anadolu Sigorta owns 20% of Anadolu Hayat; in 2026Q1, it booked TL 322.5 million of income through the equity method. In the standalone statements, the same affiliate appears as TL 700 million of cash dividend income. This difference should remind the investor: a single profit line is not always a single cash reality.
The İş Group connection is both an advantage and something that demands reading discipline. Milli Reasürans owns 57.3% of the capital; indirect control sits with the İş Bankası Group. The group table is not only ownership, but also balance sheet and distribution channel. As of March 31, 2026, deposits held at İş Bankası were TL 12.98 billion; funds sourced from İş Portföy and Maxis were TL 16.61 billion; premiums written through the İş Bankası channel were TL 4.54 billion. This structure should not be romanticized as cheap funding or powerful distribution; but it should not be read as naked risk either. The source table clearly shows Anadolu as an insurance balance sheet operating inside the İş ecosystem.
Legal and actuarial risk is not a small footnote either. The total amount of lawsuits filed against the company is TL 11.67 billion. Net insurance technical provisions are TL 83.52 billion. The fact that outstanding claims reserves cannot be estimated with certainty is stated plainly in the financial report: delays between the time a loss occurs and the time payment is made can later change the ultimate liability. In insurance, the real risk is sometimes not a new claim, but an old claim speaking late.
How Much Is the Market Afraid?
As of the 18 May 2026 market data, market value is roughly TL 58.8 billion. Consolidated equity is TL 35.29 billion. If 2026Q1 net profit is annualized, it comes to TL 13.86 billion; when 2026Q1 is added to full-year 2025 profit and 2025Q1 is removed, LTM profit is roughly TL 14.92 billion. This says the stock is trading at about 3.9x LTM earnings and 1.67x book value.
| Calculation | Read-through | |
|---|---|---|
| Market value | TRY 58.8bn | Based on TRY 29.40 share price and TRY 2.0bn paid-in capital |
| LTM consolidated net profit | TRY 14.92bn | 2025 full year + 2026Q1 - 2025Q1 |
| Market value / LTM net profit | 3.9x | The market doubts durability of earnings |
| Market value / equity | 1.67x | Based on TRY 35.29bn consolidated equity |
| Surplus above required own funds | TRY 21.44bn | Regulatory cushion exists |
| Market value / accepted own funds | 1.32x | Capital strength supports the undervaluation case |
That multiple alone would not be enough to say “cheap.” But the capital buffer changes the equation. Accepted equity is TL 21.44 billion above required equity. Market value is about 1.32 times accepted equity. Put differently, the market is pricing this company by punishing both its capital surplus and its current profit production. The reason for the fear is understandable: the current strength of investment income may not be permanent. But the price is also taking that fear very seriously.
Here, two valuation paths lead to the same place. The earnings multiple path says 3.9x LTM profit is low. The capital bridge path shows that an insurer with a regulatory capital surplus is being priced by the market almost as if “when high interest rates end, profit ends too.” My objection is this: the combined ratio is bad, but the balance sheet is not weak; investment income is cyclical, but the company’s market position is not fake; there is pricing risk, but the current price already carries suspicion of permanent claims damage.
The Line That Would Break the Thesis
It would be easy to write a strong bull thesis in this report: market share of 8.7%, premiums up 27.5%, net profit up 75.2%, capital surplus, low multiple. But that would be incomplete. The real bull thesis is narrower: Anadolu Sigorta is cheap if, while buying time with its high-rate investment book, it repairs the underwriting side.
The bear thesis is also strong. If the combined ratio stays above 112%, if motor liability and general liability claims do not turn back, if technical provisions rise while investment income falls, today’s earnings multiple becomes deceptive. 2026Q1 cash flow also feeds this doubt: while consolidated net profit was TL 3.46 billion, net cash outflow from operating activities was TL 8.57 billion. In insurance, cash flow moves by period; even so, a reversal this large places a question mark over earnings quality.
That is why ANSGR is not a stock for everyone. It is uncomfortable for the investor who wants steady, clean profit born from premiums. It is also unsuitable for the investor who cannot carry a high claims ratio and the cyclicality of the investment portfolio. But for the investor who wants to buy a capitalized insurance balance sheet at a low multiple, and who can calmly monitor the combined ratio and investment income in the coming quarters, there is opportunity.
Verdict
My verdict on ANSGR: Cheap.
This cheapness is not the gift of a brilliant story; it is the harsh discounting of a flawed machine. Buying the stock means accepting that Anadolu Sigorta’s claims ledger is being carried by interest, and believing that this interest will buy the company enough time to repair the underwriting side.