Solvency and Financial Condition Report for the year ended 31st December 2025
SFCR 2025Solvency and Financial Condition Report
COSMOS INSURANCE COMPANY PUBLIC LTD
HEAD OFFICE: 46 Griva Digeni Avenue, 1080 Nicosia P.O.Box 21770, 1513 Nicosia
T: +357 22 796 000 | F: +357 22 022 000
Table of Contents
Executive Summary 3
Business Performance 7
Business 7
Underwriting performance 12
Investment Performance 14
System of Governance 18
General information on the system of governance 18
Fit and proper requirements 24
Risk management system including the own risk and solvency assessment 26
Own Risk and Solvency Assessment (ORSA) 33
Internal control system 35
Internal Audit Function 37
Actuarial Function 37
Outsourcing 39
Adequacy of the system of governance 42
Any other information 42
Risk Profile 43
Underwriting Risk 44
Market risk 49
Counterparty Default Risk 56
Liquidity risk 59
Operational risk 61
Other material risks 64
Valuation for solvency purposes 65
Assets 65
Technical provisions 69
Other liabilities 74
Capital Management 77
Own Funds 77
Compliance with the MCR and SCR 82
Appendices 84
Appendix A: COSMOS Organisational Structure 84
Appendix B: Extracts from Annual QRTs 85
Appendix C: Abbreviations 96
Appendix D: Auditors Report 97
COSMOS INSURANCE COMPANY PUBLIC LTD HEAD OFFICE
46. Griva Digeni Avenue, 1080 Nicosia
P.O. Box 21770, 1513 Nicosia
T: +357 22 796000 | F: +357 22 022000
Page 2 of 97
Executive SummaryPurpose of the report
The purpose of the Solvency and Financial Condition Report ("SFCR") is to satisfy the public disclosure requirements according to Article 304 (1) of the Delegated Regulation (EU) 2015/35.
The Report discloses the information referred to in Articles 292 to 298 of this Regulation under the following main headings: business performance, system of governance, risk profile, valuation for solvency purposes and capital management.
The present SFCR has been prepared with reference date 31st December 2025 and has been approved by the Company's Board of Directors on 3rd of April 2026.
Overview of the Company
COSMOS Insurance Company Public Limited (hereinafter "COSMOS") was established in Cyprus on October 17, 1981 as a Private Limited Liability Company and on December 6, 1999 the Company became listed in the Cyprus Stock Exchange Market.
The Company is authorised and regulated by the Insurance Superintendent of Cyprus and being listed, by the Cyprus Securities and Exchange Commission (CySEC) and operates in accordance with the applicable insurance legislation. COSMOS is a non-life insurance undertaking providing a range of general insurance products, including motor, medical expense, fire and other damage to property, and liability insurance.
COSMOS operates across Cyprus through its extensive network of insurance intermediaries supported by its offices in Nicosia, Larnaca, Limassol and Paphos. The Company employs sixty-eight (68) well-trained i members of staff and maintains cooperation with more than one hundred and twenty-five (125) insurance intermediaries throughout the island.
The Company maintains a loyal network of insurance agents and clients. Its service standards and claims settlement practices have remained consistently strong, and COSMOS enjoys a very good reputation in the market.
In 2025, COSMOS's insurance revenue exceeded €22.6 million. Motor insurance remains the Company's largest line of business followed by the Medical Expense and the Fire and other damage to property lines of business.
On 1 January 2016, the Company transitioned into the Solvency II regulatory framework after completing a comprehensive program of regulatory requirements in corporate governance, risk assessment and management, solvency and reserving as well as supervisory and public disclosure.
The Company maintains reinsurance arrangements with reputable international reinsurers in order to manage its underwriting risk and support the stability of its operations.
Business and Performance
The Company's main lines of business ("LoBs") are Motor (Third Party Liability and Own Damage), Medical Expense, Fire and other damage to property and General Liability.
The Company's net insurance and financial result for 2025 amounted to €4,3m profit as follows:
Financial Result split per LoB
Amounts in EUR (€)
MOTOR
FIRE
OTHER
A&H
LIABILITY
TOTAL
Insurance revenue
14.731.368
3.039.900
320.040
3.186.396
1.334.124
22.611.828
Insurance service
expense
(11.135.066)
(1.838.277)
(239.991)
(2.348.050)
(650.980)
(16.212.364)
Net expense from reinsurance
contracts held
(776.521)
(786.990)
(12.016)
(544.259)
(296.705)
(2.416.491)
Insurance service
result
2.819.781
414.633
68.033
294.087
386.439
3.982.973
Total investment
income
271.880
56.104
5.907
58.808
24.622
417.321
Insurance finance expenses for insurance contracts
issued
(182.152)
(6.420)
(347)
(439)
(11.591)
(200.949)
Reinsurance finance income for reinsurance
contracts held
47.722
4.606
131
260
6.815
59.534
Underwriting Result
2.957.231
468.923
73.724
352.716
406.285
4.258.879
Table 1: Underwriting Results 2025 per LoB
Overall, Company's insurance revenue was approximately €22,6m in 2025, recording a notable increase of 6,6% or €1,4m compared to 2024. During 2025, COSMOS experienced an increase of insurance revenue across all lines of business except Liability with the most significant to be recorded in Fire and Motor Lob.
Company's pricing model is updated on an annual basis, and the underlying principle of the rating model is to eliminate cross subsidies to the maximum extent possible and achieve a lower loss ratio across the entire portfolio. At the same time, Company's efforts to penetrate other profitable lines of business, such as Fire and other damage to property, resulted in a significant increase in its share, taking into consideration the aggressive approach adopted by bank-affiliated insurance companies.
Moreover, Company's insurance service expenses increased compared to the prior year, mainly due to higher expenses in A&H and an increase in the loss ratio in the Fire and other damage to property line of business, primarily driven by a significant wildfire incident in the Limassol district during July 2025, which resulted in increased claims. The increase in insurance service expenses from these lines of business was partially offset by the improvement in loss ratio in the Motor line of business.
The Business performance of the Company is further analysed in Section A of this report.
System of Governance
The corporate governance framework of the Company is based on the "Three Lines of Defence" model which supports the implementation of a robust internal control system and is aligned with the "four eye principle" that the Company is required to comply with.
Moreover, the Company has established the following functions to ensure effective oversight of its operations, in accordance with the requirements of Solvency II for an Internal Control System:
Risk Management Function;
Compliance Function;
Internal Audit Function; and
Actuarial Function.
The Company ensures that all persons who effectively manage the Company or have other key functions are fit to provide sound and prudent management through their professional qualifications, knowledge and experience and are proper by being of good repute and integrity.
The Company has also defined its own risk management system and performs an Own Risk and Solvency Assessment ("ORSA") at least once a year.
The System of governance of the Company is further analysed in Section B of this report.
Risk Profile
The Company uses the standard formula to estimate its Solvency Capital Requirement ("SCR") according to which the SCR calculation is divided into risk modules.
The components of the SCR (before diversification) for the reporting year ended 31 December 2025 together with their allocation of SCR are presented below:
Health Underwriting risks
2,21%
Operational Risk 6,56%
Counterparty risk 12,31%
Non-Life Underwriting risks 46,63%
Market Risk 32,29%
Figure 1: COSMOS SCR Components as at 31/12/2025
The main components of Company's SCR are Non-Life Underwriting risk, Market risk and Counterparty Default risk.
Non-life underwriting risk is comprised from Premium & Reserve risk, Lapse risk and Catastrophe risk, which are mitigated mainly through the purchase of reinsurance cover.
SCR from Market risk is primarily driven by the Company's exposure to property risk associated with its real estate portfolio, as well as the increase in financial assets during the year, particularly equity exposures.
The Risk profile of the Company is further analysed in Section C of this report.
Valuation for solvency purposes
The valuation of assets and liabilities for Solvency II purposes is in line with the Company's financial statements prepared under International Financial Reporting Standards ("IFRS") except for:
Differences in the valuation of technical provisions and associated reinsurance recoverables;
Intangibles recognised as asset under IFRS Accounting Standards but valued at zero under Solvency II;
Differences in the valuation of Deferred tax assets/liabilities;
Difference in the valuation of Insurance receivables.
The Company does not apply any matching and volatility adjustments nor any transitional measures for the valuation of technical provisions.
The valuation for solvency purposes of the Company is further analysed in Section D of this report.
Capital Management
The Company's SCR as at 31 December 2025 was estimated at €7,52m compared to Own Funds of €17,484m, resulting in a SCR coverage ratio 232,64%.
In accordance with Solvency II Directives, all insurance entities, at any given time must have adequate available capital to meet the Minimum Capital Requirement ("MCR") to retain its license and operate in the Cyprus insurance market.
Company's MCR as at 31 December 2025 as determined by Solvency II was determined at
€4m, which indicates that the Company can cover its minimum capital requirement by approximately 4,37 times.
The Capital management of the Company is further analysed in Section E of this report.
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Business Performance
Business
Name and legal form of undertaking
COSMOS Insurance Company Public Limited (hereinafter "COSMOS") was established in Cyprus on October 17, 1981 as a Private Limited Liability Company and on December 6, 1999 the Company became listed in the Cyprus Stock Exchange.
Its registered address is 46 Griva Digeni Avenue, 1080 Nicosia, Cyprus.
Supervisory authority
The Company is authorised and regulated by the Superintendent of Insurance. The Superintendent of Insurance is the competent authority of the insurance sector in the Republic of Cyprus and exercises all the powers granted by the Law on Insurance and Reinsurance Services and Other Related Issues of 2016 [Law 38(I) 2016] and by the relevant Regulations, for the purpose of protecting the policyholders and the insurance beneficiaries.
Contact Information:
Address: P.O. Box 23364, 1682 Nicosia
Telephone Number: +35722602990
Fax Number: +35722302938
E-mail: insurance@mof.gov.cy
External Auditors
The Company's external auditors are PricewaterhouseCoopers Limited.
Contact Information:
Address: PwC Central, 43 Demostheni Severi Avenue, CY-1080 Nicosia, Cyprus
Telephone Number: +35722555000
Fax Number: +35722555001
Holders of qualifying holdings in the undertaking
COSMOS is a Company listed in the Cyprus Stock Exchange. Its main shareholders are:
Major shareholders
% of share capital
Kyriakos M. Tyllis and Co Ltd
40,98
Kyriakos Tyllis
18,81
Charalambos Panayiotou
9,74
Elias Mavromatis
9,74
Material lines of business and material geographical areas where the Company carries on business
The Company carries out business in Cyprus under the following non-life insurance lines of business:
Financial statements ("IFRS")
Abbrevation
Solvency II
Accident and Health
A&H
Medical Expense,
Income protection
Motor
Motor
Motor vehicle liability,
Other motor
Other
Marine
Miscellaneous
Marine, aviation and transport
Miscellaneous financial loss
Fire
Fire
Fire and other damage to property
Liability
Liability
General liability
Table 2: COSMOS Lines of Business (LoB)
COSMOS has a wide distribution network in Cyprus which is monitored through its head office in Nicosia and branch offices situated in Limassol, Paphos and Larnaca. The Company's network of insurance agents is located throughout Cyprus and provides a very personalized level of service to their customers.
Any significant business or other events that have occurred over the reporting period that have had a material impact on the undertaking
Macroeconomy & Geopolitical landscape
The geopolitical conflicts in the region, including the ongoing Russia-Ukraine war which commenced in early 2022, as well as ongoing tensions in the Middle East involving Israel, Iran and other regional actors, and disruptions in the Red Sea linked to Huthi activity, all of which remain ongoing at the time of preparation of this report, continue to create widespread uncertainty.
COSMOS does not have any direct exposure to the above-mentioned regions. Nonetheless, the instability caused by these developments indirectly impacts the global economy, particularly through energy prices, trade routes and inflationary pressures.
Furthermore, due to Cyprus' geographical position in close proximity to these regions, businesses with activities or investments in the affected areas have been impacted, and may continue to be affected, particularly in sectors such as tourism, trade and shipping, influencing travel patterns, investor sentiment and overall economic activity in Cyprus. In addition, sanctions on financial transactions imposed by the US and the EU against Russia, in response to the Russia-Ukraine war, continued to be updated during the year and have affected businesses in Cyprus with Russian interests or clientele.
Recent political developments in the United States and other major economies introduced additional uncertainty in relation to regulatory, trade and fiscal policies, creating both opportunities and risks globally.
The composition, timing and magnitude of these policy shifts remained uncertain during the year, but have influenced economic activity, interest rates and inflation dynamics.
In particular, trade policy and protectionist measures have affected the global outlook, contributing to pressures on global growth while at the same time maintaining inflationary trends.
At the same time, the higher interest rate environment and ongoing financial market volatility have impacted investment returns and asset valuations.
COSMOS' management and BoD review and discuss any new developments and are prepared to adjust the Company's strategy or take action to mitigate the Company's probable exposure, if deemed necessary.
Climate change & Earthquake risk
Natural disasters continue to result in above-average economic losses, underscoring the growing impact of climate volatility.
Europe has recorded some of the costliest climate-related events in recent years, including severe storms and floods across several countries, resulting in significant economic losses and, tragically, loss of life.
Cyprus has reported an increased number of extreme weather events in recent years, none of which, however, have reached catastrophic proportions to date. At the same time, as the frequency of such events increases, their potential impact is expected to become more material over time.
During the year, Cyprus experienced a significant wildfire event affecting multiple rural and semi-mountainous areas, resulting in damage to residential properties, agricultural land and infrastructure. In relation to this event, the Company recorded a limited number of claims, which were settled at a total cost of approximately €0.5 million. The overall financial impact remained within the Company's risk tolerance levels.
This event highlights the Company's exposure to catastrophe risks, particularly wildfire risk, and the potential for such events to result in more material losses under adverse condition.
The significant economic losses sustained by the (re)insurance market in prior years have led to a period of stabilisation in reinsurance market conditions, particularly in relation to catastrophe (CAT) programmes.
Even though COSMOS anticipates that the reinsurance market will be gradually softening, has adjusted the budget of the year 2026, maintaining a prudent and conservative approach.
Regulatory and other updates
During 2025, the regulatory landscape continued to evolve, with a focus on strengthening operational resilience, governance and risk management practices within the insurance sector.
In particular, the Digital Operational Resilience Act (DORA), which became applicable in January 2025, introduces a comprehensive framework for the management of ICT and cyber risks, including requirements around governance, incident reporting, third-party risk management and digital resilience testing. The Company is in the process of implementing the necessary measures to ensure compliance with the new requirements.
In parallel, important developments took place at EU level in relation to the prudential framework for insurance undertakings. The revised Solvency II framework was published in January 2025, with implementation requirements to follow in subsequent years. In addition, the Insurance Recovery and Resolution Directive (IRRD) entered into force in January 2025, establishing a harmonised EU framework for the recovery and resolution of insurance undertakings. These developments are expected to influence future regulatory requirements and supervisory practices.
Furthermore, the Cyprus Parliament approved a comprehensive tax reform package in December 2025, which came into effect from 1 January 2026. The reform introduces significant changes to the tax framework, including an increase in the corporate tax rate to 15% and amendments to dividend taxation and administrative requirements.
At the same time, regulatory developments in the insurance sector include the introduction of provisions aimed at enhancing consumer protection, including requirements for objective and justifiable underwriting decisions and restrictions on discriminatory practices in motor insurance. These reforms are expected to be implemented in early 2026. The Company continues to assess the potential impact of these changes.
In addition, Law No. 167(I) of 2023 introduced changes to the legal framework governing Motor Vehicles' Third Party Liability Insurance, in line with Directive (EU) 2021/2118. The Company has taken the necessary steps to ensure compliance with the updated requirements.
Product Development
COSMOS' strategic plan focuses on the development of its Non-Motor portfolio with specific emphasis on small and medium enterprises and white-collar clientele. For this reason, priority was given to the enhancement of existing and creation of new products that service the clients' current and future needs.
During 2025, COSMOS worked towards launching an updated policy for properties, with a modern and consumer-oriented policy wording. The product is expected to be launched during 2026.