Zavai ovaln ica T iglav d.d
Miklosiceva 19, Ljubljana
Lj ubljan a la i c 2026
Zavarovalnica Triglav, d.d.
2025
triglav
This document is a translation of the original Slovenian version and is intended to be used for informational purposes only. While every effort has been made to ensure the accuracy and completeness of the translation, please note that the Slovenian original is binding.
Zavarovalnica Triglav, d.d.
€ 479.7 million
€ 113.6 million
Solven cy capita I requiren1ent Net profit in 202 S
Cross wi itten premiums in 2025 Minimum ccipital rug uirement
Investments Eligible own funds
259Oo
Solvency ruti'o
MEMBERS OF THE MANAGEMENT BOARD OF ZAVAROVALNICA TRIGLAV
President of the Management Board:
Andrej Slapar
Members of the Management Board -
UrO l
Tadej Coroli
Marica Makoter -
Blaz Jakic
Ivica Vulic
Ljubljana, //arch 2026
TABLE OF CONTENTS
Summary 8
Business and performance 13
Business 13
Underwriting performance 16
Investment performance 18
Performance of other activities 20
Any other information 21
System of governance 23
General information on the system of governance 23
Fit and proper requirements 31
Risk management system including own risk and solvency assessment 32
Internal control system 40
Internal audit function 41
Actuarial function 42
Outsourcing 43
Any other information 44
-
Risk profile 46
Underwriting risk 47
Market risk 53
Credit risk 57
Liquidity risk 60
Operational risk 63
Other material risks 66
Any other information 68
-
Valuation for solvency purposes 71
Assets 72
Technical provisions 83
Other liabilities 90
Alternative methods for valuation 94
Any other information 94
-
Capital management 96
Own funds 97
Solvency Capital Requirement and Minimum Capital Requirement 100
Use of the duration-based equity risk sub-module in the calculation of the
Solvency Capital Requirement 103
Difference between the standard formula and any internal model used 103
Non-compliance with the Minimum Capital Requirement and non-compliance
with the Solvency Capital Requirement 103
Any other information 103
Summary
Solvency and Financial Condition of Zavarovalnica Triglav, d.d. for 2025 (hereinafter: Company's SFCR) has been prepared in accordance with the Insurance Act, Solvency II Directive1, the Commission Delegated Regulation2 (hereinafter: Delegated Regulation), the Commission Implementing Regulation3 and the Guidelines on reporting and public disclosure EIOPA-BoS-15/109. The structure of the report follows Annex XX of the Delegated Regulation and covers the financial year 2025. All calculations are prepared as at 31 December 2025 and 31 December 2024. The amounts in the tables are presented in thousands of euros, in line with Article 2 of the Implementing Regulation. Due to rounding, the numbers presented may not add up precisely to the totals, and percentages may not precisely reflect the absolute figures. Information is provided in sufficient detail to provide the reader with a comprehensive view of the solvency and financial condition of Zavarovalnica Triglav.
Zavarovalnica Triglav is a public limited company with its headquarters in Slovenia where it holds the leading position on the insurance market with a 32.4 percent market share (34.2 percent the year before). The beginnings of its operations go back 126 years. Zavarovalnica Triglav (hereinafter: the Company) is the parent company of the Triglav Group (hereinafter: the Group) that includes 29 subsidiaries, 10 associated companies and 13 joint ventures in addition to the Company at the end of 2025. The Group operates in six countries of the broader Adria region. The Group and thereby the Company as well as the subsidiary Pozavarovalnica Triglav Re, d.d. (hereinafter: Pozavarovalnica Triglav RE) are rated by two renowned ratings agencies, S&P Global Ratings and AM Best. In 2025, S&P Global Ratings upgraded the Group's financial strength and credit rating from "A" to "A+", and AM Best affirmed its "A" credit rating. Both assessments have a stable medium-term outlook, which confirms the financial stability, high capital adequacy, and profitability of the Group's operations. The Company's activities are supervised by the Slovenian regulator Insurance Supervision Agency, and its external auditor for the financial year 2025 is the audit company Deloitte revizija d.o.o.
The strategic activities of the Company include the insurance activities and asset management activities. As part of its insurance activities, the Company concludes non-life, health, life, and pension insurance as well as the reinsurance activity. It operates primarily on the Slovenian market, and as of 2025, the Company, in cooperation with the Italian insurance agency Prima Assicurazioni S.p.A (hereinafter: Prima), has expanded its operations to the Italian motor vehicle insurance market, which has significantly increased the overall scope of the Company's business.
The Company is managed and governed according to a two-tier system of governance including the General Meeting of Shareholders, the Supervisory Board, and the Management Board. At the end of 2025, the Management Board comprised five members. The Supervisory Board was
1 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)
2 Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)
3 Commission Implementing Regulation (EU) 2023/894 of 4 April 2023 laying down implementing technical standards for the application of Directive 2009/138/EC of the European Parliament and the Council with regard to the templates for the submission by insurance and reinsurance undertakings to their supervisory authorities of information necessary for their supervision and repealing Implementing Regulation (EU) 2015/2450
composed of seven members at the end of 2025 with one of them serving as employee representative. The Company's system of governance also includes four key functions that report directly to the Management Board (risk management function, compliance function, internal audit function, and actuarial function) and nine risk management system committees that are appointed by the Management Board. Their work is placed into the second line of defence of the three lines of defence model of risk management. The work of the Company's committees is described in detail in Section B.3.4 of this report.
In 2025, the Company operated successfully and profitably in all business segments. With the aim of simplifying and optimising the Group's operations, in 2025 the Company transferred the entire activity of voluntary supplementary pension insurance in the savings phase (hereinafter also: PDPZ) and management of backing funds from the Company to the specialised subsidiary Triglav, pokojninska družba, d.d. (hereinafter: Triglav, pokojninska družba).
Regarding risks, the Company ended 2025 within the set targets, and with capital adequacy within the target range. The Company regularly monitors risk profile and actively upgrades individual areas of the risk management system, especially where elevated risk or higher exposures are detected.
The risk profile of the Company as at 31 December 2025 changed compared to the previous year, mainly due to commencement of business operations on the Italian market. The share of market risk decreased as well as the share of underwriting risk. The share of credit risk and operational risk increased slightly compared to the previous year. In terms of volume, the Solvency Capital Requirement increased by EUR 63.3 million compared to the previous year. Additional information on risk assessment is presented in Section C of this report.
Chart 1: Company's risk profile50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
47%
48%
42%
39%
7%
5%
7%
5%
Underwriting risk Market risk Credit risk Operational risk
2025 2024Capital adequacy or solvency ratio is calculated according to the standard formula of Delegated Regulation (hereinafter: standard formula) as the ratio of eligible own funds to the Solvency Capital Requirement. The Company was adequately capitalized as at 31 December 2025. It had sufficient eligible own funds to cover both the Solvency Capital Requirement (the ratio stood at 259 percent) and the Minimum Capital Requirement (the ratio stood at 740 percent). The Company does not use any adjustments or simplifications in determining capital adequacy. Chart 2: Company's Capital adequacy
300 %
259 %
271 %
243 %
250 %
200 %
150 %
100 %
Capital adequacyTarget range for long-term capital adequacy
50 %
0 %
2023 2024 2025
Eligible own funds are calculated as the difference between assets and liabilities whereby the entire balance sheet is valued at fair value. The difference between assets and liabilities is composed of the Company's share capital (EUR 73.7 million), the reconciliation reserve (EUR 1,017.0 million), and subordinated liabilities as Tier 2 own funds (EUR 152.2 million). The Company did not have net deferred tax assets as Tier 3 own funds in 2025. The calculation of eligible own funds considers the dividend policy guidelines. The Company holds the highest quality own funds and thus classifies its entire share capital and the reconciliation reserve as Tier 1 own funds, while it classifies subordinated bonds as Tier 2 own funds.
The Solvency Capital Requirement of the Company is calculated using the standard formula, without any simplification. It represents the sum of capital requirements of its main risks and accounts for the diversification between them. The Company has a ring-fenced fund, i.e. PDPZ renta4, for which risks are calculated separately for each risk type under the standard formula and are presented in more detail in Section E of this report.
4 Prostovoljno dodatno pokojninsko zavarovanje v izplačevanju.
Chart 3: Structure of the Company's Solvency Capital RequirementAt the end of 2025, 86.7 percent of the Company's undiversified Solvency Capital Requirement derived from underwriting and market risk. Most of its own funds are classified, in terms of quality, as Tier 1 own funds. In 2025, the Company recorded strong operating performance, maintained its capital strength, and carefully followed the outlined strategic guidelines and objectives in its operations.
A.
Business and performance
1 Busines s
Undei wi it ing perfoi mance
Investment pei foi mance
Business and performance
Business
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About the Company
Zavarovalnica Triglav, d.d., with headquarters in Ljubljana, Miklošičeva 19, is the parent company of the Group, which comprises 29 subsidiaries, 10 associated companies and 13 joint ventures in addition to the Company. Below is the schematic presentation of the Group's subsidiaries and associated companies as well as their respective participating interests as at 31 December 2025.
Figure 1:Schematic of the Group's subsidiaries and associated companies and their respective participating interests as at 31 December 2025The Company performs the insurance and reinsurance activities as well as asset management activity. As part of its insurance business, the Company offers non-life, health, life, and pension insurance. The Company operates primarily on the Slovenian market however, it also operates in the broader international environment through partnerships with foreign companies involved in insurance agency and brokerage as well as reinsurance. The Company held a market leader position in Slovenia with a market share of 32.4 percent at the end of 2025 (34.2 percent share in 2024).
In addition to insurance and reinsurance activities, the Company also conducts activity of asset management which includes management of insurance portfolios (assets backing liabilities and backing funds, saving of clients via insurance services and investments in the Company's mutual funds. Asset management assures adequate funds for the payment of contractual liabilities and the maintenance of capital adequacy.
-
Supervisory body
The Company's supervisory body is:
Insurance Supervision Agency (hereinafter: AZN), Trg republike 3,
1000 Ljubljana, Slovenia
-
External audit
Based on the resolution of the General Meeting of Shareholders of the Company (hereinafter: General Meeting of Shareholders), the following audit firm was appointed as the external auditor of the Company for the 2025 financial year:
Deloitte revizija d.o.o., Dunajska cesta 165,
1000 Ljubljana, Slovenia
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Shareholder structure of the Company
There were no significant changes in the Company's shareholder structure in 2025. The largest shareholders, funds owned by the Republic of Slovenia (Pension and Disability Insurance Institute of Slovenia (ZPIZ) - 34.47 percent ownership stake and Slovenian Sovereign Holding (SDH) - 28.09 percent ownership stake) maintained unchanged ownership shares, while the third largest shareholder, Croatian pension fund (visible in the fiduciary account of its custodian bank) increased its investment by 1.6 percentage point to 8.4 percent. According to the data available, these three shareholders are the sole holders of qualifying holdings in the Company as at 31 December 2025.
Chart 4: Company's shareholder structure as at 31 December 2025At the end of the year, the Company had 8,748 shareholders, around 30 of which were international banks with fiduciary accounts held by their clients and international institutional investors mostly from Europe and the USA. They held a 14.8 percent stake (a decrease of 1.1 percentage points compared to previous year), while the stake of Slovenian institutional shareholders stood at 8.2 percent (a 0.4 percentage points increase compared to previous year). In recent years, a gradual growth of ownership by Slovenian retail investors was observed which continued in 2025, as their stake increased by 0.7 percentage points to 14.5 percent.
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Significant events in 2025
− Strong performance: The Group exceeded the planned annual profit by the end of the year. Total volume of operations increased in all business segments apart from Health segment. The Company's operations are presented in more detail in the business part of Annual Report of the Triglav Group and Zavarovalnica Triglav d.d., 2025 (hereinafter: Annual Report)5, Section 8.
− Dividend payment: At the General Meeting of Shareholders in June, the shareholders adopted the proposed resolution of the Management Board and the Supervisory Board to pay out a dividend of EUR 2.8 gross per share for a total value of EUR 63.7 million. At the end of the year, this represented a dividend yield of 4.7 percent. This is presented in more detail in the business part of Annual Report, Section 6.4.
− High credit rating confirmed: S&P Global Ratings upgraded the Group's financial strength rating and credit rating from "A" to "A+" in June, while AM Best affirmed an "A" rating in October. Both estimates have a stable medium-term outlook. This is presented in more detail in the business part of Annual Report, Section 6.6.
− Corporate governance: The General Meeting of Shareholders appointed Andrej Andoljšek and Barbara Cerovšek Zupančič as members of the Supervisory Board, shareholder representatives. Members of the Supervisory Board, employee representatives, Janja Strmljan Čevnja and Aleš Košiček, submitted their resignation statements in March 2025. In September, the Supervisory Board took note of the proposal of the Works Council and appointed Ivica Vulić as a member of the Management Board, Workers Director. He began his five-year term as a member of the Management Board in January 2026. In November, the Works Council elected Rudi Lipovec to the Company's Supervisory Board as an employee representative. This is presented in more detail in the business part of Annual Report, Section 5.3.
− Business optimization in the Asset management segment: To simplify and optimize the Group's operations, the entire activity of voluntary supplementary pension insurance in the savings phase and management of backing fund transferred from the Company to the specialized subsidiary Triglav, pokojninska družba. The proposed spin-off was also approved by the General Meeting of Shareholders. The spin-off was entered in the court register on 1 October 2025. More details are available in the business part of Annual Report, Section 2.7.
− Internationalisation of operations: In line with the strategic ambition of internationalisation of operations, the Group has expanded the scope of operations in
5 Annual Report is published on the Company's website: http://www.triglav.eu.
foreign markets. In cooperation with Prima and reinsurance company Ageas Re, it started operating on the Italian motor vehicle insurance market in June. The impact of the new business operation significantly increased the total volume of Group's operations on an annual level. In August 2025, AXA entered into an agreement to acquire a 51 percent stake in Prima. The acquisition of the stake was conditional on the fulfilment of customary conditions precedent and obtaining regulatory approvals and was completed in November 2025. In July 2025, the management body of the Company decided to acquire up to 24.8 percent ownership in the fast-growing Insurtech company HPI GMA S.A., with which the Group participates in the Polish motor vehicle insurance market, through a capital investment over the next 24 months. By the year end, it acquired a 21.68 percent stake in the company, and the European Bank for Reconstruction and Development (EBRD) will also become its minority owner. With this investment, the Group aims to consolidate its operations on the Polish market. More details are available in the business part of Annual Report, Section 4.
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About the Company
Underwriting performance
The Company's net profit increased by 15.7 percent compared to the previous year, mainly due to an increase in the non-life insurance segment. The combined non-life ratio stood at 92.9 percent at the end of 2025, an increase of 0.7 percentage points compared to 2024. The main reason for it is the higher claims ratio.
Table 1: Company's operating performance In EUR thousand2025
2024
Profit before tax
142,135
117,584
Net profit
113,616
98,232
Non-life insurance
93,292
77,504
Life insurance with pension insurance
20,324
20,728
Combined non-life ratio
92.9%
92.2%
ROE
14.8%
13.8%
In 2025 the Company's gross written premium from insurance, co-insurance and reinsurance amounted to EUR 1,910.7 million and increased by EUR 805.9 million compared to 2024. Premium growth in the Motor vehicle liability insurance line of business increased by EUR 526.3 million and stems mostly from business on Italian market.
Gross claims incurred in 2025 totalled EUR 812.0 million and increased by EUR 253.4 million compared to 2024. The largest difference is in the Motor vehicle liability insurance line of business. Expenses incurred in 2025 amounted to EUR 471.1 million and are higher by EUR 144.6 million compared to 2024.
The following table presents gross written premiums from insurance, co-insurance and reinsurance, gross claims incurred, and expenses incurred by significant lines of business for solvency purposes. Other lines of business are presented in template S.05.01.02 of the annex to this report.
Table 2: Company's premium and expenses by significant lines of business for solvency purposes In EURthousand
2025
2024
Gross written premiums from insurance, co-insurance and reinsurance contracts
1,910,701
1,104,825
- Non-life insurance including health insurance
1,739,242
927,999
Motor vehicle liability insurance
701,182
174,877
Fire and other damage to property insurance
254,671
242,290
Other motor insurance
238,836
177,679
Other non-life and health lines of business
544,553
333,152
- Life insurance
171,459
176,826
Index-linked and unit-linked insurance
125,462
131,597
Insurance with profit participation
35,734
35,485
Other life insurance
10,263
9,743
Gross claims incurred
811,980
558,598
- Non-life insurance including health insurance
643,799
379,917
Motor vehicle liability insurance
200,600
87,050
Other motor insurance
98,501
106,105
Non-proportional property reinsurance
87,398
9,966
Other non-life and health lines of business
257,300
176,796
- Life insurance
168,181
178,681
Insurance with profit participation
91,119
93,625
Index-linked and unit-linked insurance
75,145
79,290
Other life insurance
2,270
2,724
Annuities from non-life insurance contracts
-353
3,042
Expenses incurred
471,111
326,528
- Non-life insurance including health insurance
441,396
296,213
Motor vehicle liability insurance
169,667
57,015
Fire and other damage to property insurance
76,505
82,381
Other motor insurance
53,691
51,323
Other non-life and health lines of business
141,532
105,495
- Life insurance
29,715
30,315
Index-linked and unit-linked insurance
22,405
20,306
Other life insurance
4,901
3,767
Insurance with profit participation
2,408
6,228
Health insurance
0
14
- Other expenses
42,674
4,232
The Company concludes non-life insurance mainly in Slovenia and Italy, while life insurance is sold exclusively in Slovenia. In Slovenia, it generates approximately 47.4 percent of gross written premium and makes 61.6 percent of all claims payments, while in Italy it generates approximately 36.5 percent of gross written premium and makes 14.6 percent of all claims payments. Compared to 2024, the share of gross written premium in Italy, in relation to the total gross written premium, increased by 36.1 percentage points.
Table 3: Geographic distribution of the Company's premium and expensesIn EUR thousand
2025
2024
Gross written premiums from insurance, co-insurance and reinsurance
contracts
1,910,701
1,104,825
Slovenia
904,761
886,121
Italy
698,215
5,388
United Kingdom
92,658
32,882
Poland
60,739
56,330
Greece
30,724
26,126
Germany
24,319
20,756
Other countries
99,285
77,221
Gross claims incurred
811,980
558,598
Slovenija
500,165
479,047
Italy
118,192
6,605
United Kingdom
72,831
3,634
Poland
36,539
22,011
Greece
20,278
25,101
Germany
9,442
5,492
Other countries
54,534
16,707
Detailed quantitative data on the Company's operations according to geographic distribution is presented in template S.04.05.21 in the annex to this report.
Investment performance
The Company's investment policy remains prudent with most of the portfolio investments being debt securities. Their characteristics are closely matched to liabilities deriving from non-life and life insurance. The main factors affecting Company's investment performance are the structure of investment portfolio and the financial markets' trends. This Section presents the Company's investment result by individual investment classes including a year-on-year comparison. The investment result was also published in the accounting part of Annual Report, Section 3.4.
2025 was a relatively calm and successful year for financial markets. Compared with the end of 2024, the euro risk-free interest rate curve declined in its short-term part and increased in the long-term part. The euro risk-free rate curve is taking its typical upward shape. Credit spreads continued their downward trend from previous years and continued to decline amid relatively low volatility, except for government bonds of the highest credit quality, where credit spreads increased slightly. Equity markets recorded significant returns as well.
Favourable conditions in financial markets - stable and relatively high interest rates, narrowing credit spreads and positive trends in equity markets - were the main factors contributing to a positive investment result in 2025. Nevertheless, it was significantly lower than in 2024, mainly due to the average growth of equity markets compared to the above-average growth in 2024.
The highest return was achieved on net interest. Interest rate levels have a positive impact on interest income, which has been increasing for several years and has also surpass the interest
income in the previous year. The largest growth compared to the previous year was recorded by government bonds, which is mainly due to the larger volume of this investment class.
Dividends also contribute to a positive investment result. In 2025, there were no significant changes in the equity portfolio, therefore the dividend yield remains comparable to the previous year. The net profit or loss category comprises gains and losses from sale and permanent impairments in line with International Financial Reporting Standards (hereinafter: IFRS). The item decreased materially compared to the year before mainly due to lower stock market growth compared to 2024.
Exchange rate differences contributed positively to other financial income. In 2025 the Company used derivatives to hedge currency risk, with alternative investments (private funds) contributing to the bulk of other financial income.
The unrealised gains and losses category relates to investments classified under the accounting group financial investments measured at fair value through other comprehensive income and to financial investments measured at fair value through profit or loss that were not subject to actual realisation through sales in 2025. The greatest impact was achieved in collective investment undertakings, which was supported by the positive movement of the stock markets, and an additional positive impact was the result of credit spread contraction of corporate bonds. In the opposite direction, long-term securities had a negative impact due to an increase in risk-free interest rates in the long-term part of the curve. The leases income result did not change significantly compared to the previous year.
Table 4: Performance of the Company's investment activities for financial reporting purposes2025 In EUR thousand
Net Net profit Other net
interest Dividends or loss financial
Unrealised
gains and
Leases
income
losses
Investments
34,402
2,447
3,527
5,168
15,075
6,401
Property
0
0
2,072
0
0
6,401
Equities
0
166
788
0
45
0
Government bonds
20,923
0
-1,516
66
-10,198
0
Corporate bonds
12,616
0
-248
0
4,393
0
Collective investment undertakings
0
2,281
2,868
4,032
20,833
0
Loans
419
0
-105
0
0
0
Deposits, cash and cash equivalents
390
0
0
0
0
0
Derivatives
0
0
-332
1,479
2
0
Other
54
0
0
-409
0
0
2024 In EUR thousand
Net Net profit Other net
Investment performance interest Dividends or loss financial
Unrealised
gains and
Leases
income
losses
Investments
29,071
2,020
32,181
2,258
89,377
6,480
Property
0
0
1,384
0
0
6,480
Equities
0
216
0
0
185
0
Government bonds
17,449
0
931
142
5,778
0
Corporate bonds
10,987
0
-600
0
13,641
0
Collective investment undertakings
0
1,804
30,476
2,456
69,803
0
Loans
92
0
-11
0
0
0
Deposits, cash and cash equivalents
479
0
1
0
0
0
Derivatives
0
0
0
3
-30
0
Other
64
0
0
-343
0
0
The Company did not invest in securitized products.
Performance of other activities
-
Other income and expenses
The Company's other income comprising other operating income and other income totalled EUR
14.4 million in 2025, compared to EUR 15.0 million in 2024. Most other operating income in the amount of EUR 4.2 million in 2025 relate to the sale of investment property and fixed assets, and lease income in the amount of EUR 6.4 million.
The Company's other expenses comprising other operating expenses and other expenses in 2025 totalled EUR 31.7 million. The largest share of the abovementioned expenses refers to expenses for employee benefits in the amount of EUR 19.8 million, non-attributable insurance expenses in the amount of EUR 6.2 million, and depreciation and other expenses from investment properties in the amount of EUR 4.4 million.
Other net income from discontinued operations in 2024 amounted to EUR 11.0 million. It mainly related to the recognition of a reimbursement by the Slovenian Ministry of Health for the difference between the amount of costs paid to health service providers and the value of health service revenue from supplementary health insurance of EUR 11.0 million. There was no income from discontinued operations in 2025. Detailed information on the Company's other operating income and expenses and other income and expenses is presented in the accounting part of the Annual Report, Sections 3.7.6 and 3.7.14.
Table 5: Net other operating income/expenses and net other income/expenses for financial reporting purposes In EUR thousand2025
2024
Net other operating income/expenses from continuing
operations
-18,105
-15,862
Other operating income
12,936
12,830
Other operating expenses
-31,040
-28,692
Other net income/expenses from discontinued operations
0
-60
Other net income/expenses from continuing operations
872
1,844
Other income
1,513
2,196
Other expenses
-641
-352
Other net income/expenses from discontinued operations
0
11,022
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Lease agreements
In the reporting period, the Company concluded several lease agreements as lessor/landlord and as lessee/tenant. Among the contractual relationships where the Company acted as the lessor/landlord, only investment property was considered material. Of the total value of investment properties of EUR 40.4 million, lease income amounted to EUR 6.4 million in 2025. The Company acted as the tenant/lessee when renting business premises and parking spaces, leasing software and data lines, leasing multi-function devices and renting cars.
As at 31 December 2025, the right-of-use assets in the amount of EUR 4.0 million was recognised by the Company. The total annual depreciation expense of these assets was EUR 1.4 million, while interest expenses amounted to EUR 0.2 million. Expenses for leases not accounted according to IFRS 16, i.e. short-term leases and low-value leases, totalled EUR 0.6 million in 2025.
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Other income and expenses
Any other information
Following the balance sheet date, there has been an escalation of geopolitical tensions in the Middle East, including Iran-related events. In the stress scenarios carried out in the own risk and solvency assessment process, public announcements and reports, the Company has already highlighted geopolitical risks as important, as they may affect its operations in the short term, mainly due to potential changes in the financial investments' value. Both the Company and the Group have exposure arising from insurance business in the Middle East, which they do not assess as material due to adequate reinsurance protection.
All other important information relating to business and performance of the Company is disclosed in Sections A.1 through A.4.
System of governance
B.
B.1
General infoi mation on the system of govei nance
B.2
Fit and piopei i ec uiiensents
solvency assessment
Risl‹ management system including the own i isl‹ and
B.
B.4
Intei nal conti ol system
B.7
Outsor‹icing
B.8
Any otlsei infoi mation
P. Act uai ial function
System of governance
General information on the system of governance
A two-tier system of governance including the following bodies is set up at the Company: General Meeting of Shareholders, the Management Board and the Supervisory Board. The bodies operate in accordance with the laws and other regulations, the Company's Articles of Association and their respective rules of procedure.
The Company has a governance system in place, based on risk management system, which is adapted to the business principles, strategic objectives and risk profile of the Company. For this purpose, it has a clear organisational structure in place with defined competences and authorisations and established reporting lines, an adopted
internal control system, a business continuity system and an outsourcing policy in cases where the Company outsources individual operational functions or activities or parts thereof with the aim of ensuring an optimal and cost-effective level of its services. The Company may organise its operations in individual countries within the framework of a branch, whereby the branches are subject to the same governance system and are part of the same organisational structure as is the case for the entire Company.
In addition to the governing bodies, the Company's system of governance includes four key functions: the risk management function, the actuarial function, the compliance function, and the internal audit function. They are organised at the Company as independent organisational units, which perform their duties and responsibilities independently from one another and from other organisational units of the Company. Key functions are presented in more detail in Sections B.3.3, B.4.1, B.5 and B.6.
The system of governance also includes committees, the members of which are appointed and recalled by the Management Board. These committees differ from one another in terms of their purpose, composition and powers, while their decisions are binding. Committees within the risk management system are presented in more detail in Section B.3.4.
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Governing bodies of the Company
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Management Board
The Management Board governs and manages the Company independently and at its own responsibility. It represents and presents the Company without limitation. The Company is always represented and presented in legal transactions by two Management Board members jointly, i.e. the President and a member. The Management Board has at least three and no more than six members, one of whom is the President. The President of the Management Board proposes the appointment or recall of all or individual Management Board members to the
Supervisory Board. The Company has a Workers Director whose position is Management Board member.
The main powers and tasks of the Management Board are as follows: compliant management and organisation of the Company's operations, representation of the Company vis-à-vis third parties, responsibility for legality of operations, adoption of the development strategy of the Company and the annual plan of operations, reporting to the Supervisory Board on the performance of both the Company and the Group.
On 24 September 2025, the Company's Supervisory Board appointed Ivica Vulić as a member of the Management Board, Workers Director, at the proposal of the Works Council. He was appointed for a five-year term of office, with the decision entering into force on the date of obtaining the authorisation of the AZN to perform the function of a Management Board member.
As at 31 December 2025, the Management Board composition was as follows:
Table 6: Composition and competences of the Company's Management Board members as at 31 December 2025 First and last name Function Area of work within the Management BoardManages and directs the work of the Management Board and the operation of the Internal Audit Department. It is responsible for
Andrej Slapar
Uroš Ivanc
President of the Management Board
Member of the Management Board
Corporate Accounts Division, Non-Life Insurance Department, Corporate and Legal Affairs Division and Health Insurance Division. It is also responsible for the operation of Arbitration and the GIZ Nuclear Pool as well as for preparation and implementation of the Group's strategy
In charge of Finance, Accounting and Controlling Division as well as the Triglav Group Subsidiary Management Division, Investment Department and Actuarial Affairs Department. Also responsible for mergers and acquisitions (M&A), investor relations (IR) and relations with credit rating agencies.
Tadej Čoroli Member of the Management Board
Management Board
In charge of Non-Life Insurance Claims Division, Insurance Sales Division and International Operations Division.
Represents the worker's interests as set out in the Worker Participation in Management Act. In charge of Back Office Division, Human Resource
Marica Makoter
Blaž Jakič
member - Workers Director
Member of the Management Board
Management Division, Marketing and Corporate Communications and Client Experience Division, Process, General Affairs and Project Management Division. Also responsible for Compliance Office.
In charge of Life Insurance Department, IT Division, Risk Management Department and Outward Reinsurance Department. Also responsible for money laundering prevention, Bank assurance section and environmental, social and corporate sustainable development (ESG) activities.
Other information on the Company's Management Board is presented in more detail in the business part of Annual Report, in Section 5.3.2.
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General Meeting of Shareholders
Shareholders exercise their rights at the General Meeting of Shareholders which is convened no less than once a year. The powers and operation of the General Meeting of Shareholders are set out in the Companies Act (ZGD-1) and the Company's Articles of Association. A shareholder
registered in the share register kept by the Central Securities Clearing Corporation (KDD) as the holder of the shares at the end of the seventh day prior to the General Meeting of Shareholders' session may participate in the General Meeting of Shareholders. They may exercise their voting right provided they announce their participation no later than by the end of the fourth day prior to the date of the General Meeting of Shareholders. The rights and obligations afforded to the shareholders by the shares as well as the explanations on the limitations on share transfers and the attainment of the qualified share are presented in greater detail in the business part of the Annual Report, Section 6.2.
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Supervisory Board
Pursuant to the Articles of Association, the Company's Supervisory Board is composed of nine members, six of whom are shareholder representatives and three are employee representatives. The members of the Supervisory Board - shareholder representatives are elected by the General Meeting of Shareholders. The Members of the Supervisory Board who act as employee representatives are elected by the Company's Works Council, which informs the Company's General Meeting of Shareholders of its decision. The Chair and Vice Chair act as shareholder representatives. The term of office of Supervisory Board members is four years, whereby they may be re-elected without limitation.
The Supervisory Board supervises the Company's management. In addition to the powers under the Companies Act and the Insurance Act (hereinafter: ZZavar-1), the Supervisory Board grants its consent to the decisions of the Management Board where the stake of the Company or the value exceeds the limit set in the Rules of Procedure of the Supervisory Board, i.e. in the establishment of companies with share capital in Slovenia and abroad, the acquisition or sale of the Company's stakes in foreign or domestic companies (except if these are equity holdings for which the conventional portfolio management approach is applied), the issue of debt securities of the Company and long-term borrowing from domestic and foreign banks, the acquisition and sale of the Company's property as well as investment in its property. The Supervisory Board also grants its consent to the appointment and dismissal of the Internal Audit Department Director as well as to the granting and revoking authorisations of the Company's key function holders. It also grants consent to the Management Board for the business strategy and financial plan of the Company as well as the overarching internal acts of the system of governance. The Supervisory Board also sets the remuneration of the President and members of the Management Board and works with the Management Board to set the remuneration of the Internal Audit Department Director.
When supervising the management of the Company's business operations, the Supervisory Board in particular supervises the adequacy of procedures and effectiveness of the work of the Internal Audit Department, considers the findings of the AZN, tax inspection and other supervisory authorities in procedures for the Company's supervision, verifies annual and other financial reports of the Company and prepares a reasoned opinion thereto, provides grounds for its opinion on the Internal Audit Department's annual report to the General Meeting of Shareholders and compiles a written report for the General Meeting of Shareholders, reviews the proposal for the appropriation of distributable profit and compiles a written report for the General Meeting of Shareholders, reviews the compiled annual report which was submitted by
the Management Board, takes a position on the audit report and draws up a written report for the General Meeting of Shareholders by including potential comments or approving it.
The Supervisory Board has a key role in the risk management system as it is a primary stakeholder, to which all three lines of defence report, and simultaneously the entity responsible for the functioning of the three lines of defence system within the risk management system and control processes. As part of its supervisory work, it is regularly briefed on the effectiveness and performance of the functioning of the risk management system. The Supervisory Board appoints and may also recall the members of the Management Board. In doing so, it strives to ensure the continuity of their work through prudent and timely selection of the President and, at the President's proposal, also the selection of other members of the Management Board. The Supervisory Board decides with the majority of the votes cast by the members present.
The term of office of the members of the Supervisory Board, Andrej Andoljšek and Tomaž Benčina, shareholder representatives, expired on 14 June 2025. The General Meeting of Shareholders reappointed Andrej Andoljšek and a new member Barbara Cerovšek Zupančič, both as shareholder representative, whose term of office began on 15 June 2025.
Janja Strmljan Čevnja, member of the Supervisory Board, employee representative, resigned from the position of member of the Supervisory Board as of 13 March 2025, as well as Aleš Košiček, Member of the Supervisory Board, employee representative, on 25 March 2025. The Works Council elected Rudi Lipovec as a member of the Supervisory Board, employee representative, for a four-year term of office, which began on 7 November 2025.
The composition of the Supervisory Board in the 2025 financial year was as follows:
Table 7: Supervisory Board members in the 2025 financial year Name and surname FunctionAndrej Andoljšek Chair, shareholder representative
Tim Umberger Vice Chair, shareholder representative
Tomaž Benčina Member, shareholder representative (up until 14 June 2025)
Monica Cramér Manhem Member, shareholder representative Barbara Nose Member, shareholder representative
Rok Ponikvar Member, shareholder representative
Barbara Cerovšek Zupančič Member, shareholder representative (as of 15 June 2025) Rudi Lipovec Member, employee representative (as of 7 November 2025) Aleš Košiček Member, employee representative (up until 25 March 2025) Janja Strmljan Čevnja Member, employee representative (up until 13 March 2025)
SUPERVISORY BOARD COMMITTEES
The Supervisory Board may appoint one or several committees, which prepare proposed resolutions of the Supervisory Board, assure their realisation and perform other expert tasks. A committee or commission may not decide on issues that fall under the competence of the Supervisory Board.
In 2025, the following committees operated in the Company: Audit Committee, Appointment and Remuneration Committee, Strategy Committee, Risk Committee and Nomination Committee operating as a temporary committee of the Supervisory Board. Committees and the
board prepare proposed resolutions, ensure their implementation and perform other expert tasks.
Table 8: Composition and competences of Supervisory Board committees as at 31 December 2025 Supervisory Board committee Competences AUDIT COMMITTEE Composition:Barbara Nose, committee Chair
Barbara Cerovšek Zupančič, member
Katarina Sitar Šuštar, independent external expert
APPOINTMENT AND REMUNERATION COMMITTEE Composition:Andrej Andoljšek, committee Chair
Tim Umberger, member
Rok Ponikvar, member
STRATEGY COMMITTEE Composition:Tim Umberger, committee Chair
Andrej Andoljšek, member
monitoring the financial and sustainability reporting process, preparing reports, and drafting proposals for ensuring its comprehensiveness;
monitoring the efficiency and effectiveness of internal controls, internal audit, and risk management systems;
monitoring the obligatory audit of annual and consolidated financial statements and reports on the audit findings to the Supervisory Board;
in charge of the auditor selection procedure, proposes a candidate to the Supervisory Board to audit the Company's annual report and participates in the drafting of an agreement between the auditor and the Company;
monitoring and reviewing the independence of the auditor for the annual report, in particular the provision of additional non-audit services,
monitoring the quality of the auditor's auditing in accordance with the Guidelines for the Audit Committee, for monitoring the quality of external auditing adopted by the Agency for Public Oversight of Auditing and the Slovenian Directors' Association;
supervising the integrity of financial information provided by the Company and evaluating the drafting of the annual report, including a draft proposal for the Supervisory Board;
cooperating with the Internal Audit Department, monitoring its quarterly reports, examining its internal acts and rules on the functioning of the Internal Audit Department and the annual plan of the Internal Audit Department;
examining the decision on the appointment, dismissal and remuneration of the Internal Audit Department Director.
monitoring annual compliance reports and reports on concluded contracts with audit firms and companies from audit company networks.
proposing criteria for membership in the Management Board;
proposing the policies on remuneration, reimbursement and other benefits for the Management Board members;
carrying out a preliminary consideration of proposals made by the President of the Management Board related to the management of the Company;
performance of the fit and proper assessments of the Management and Supervisory Board members;
providing support for and drafting proposals on matters related to the Supervisory Board (e.g. conflicts of interest, design and implementation of a remuneration system for the Supervisory Board members, evaluation of its work in accordance with the Corporate Governance Code).
drafting and discussing proposals for the Supervisory Board regarding the Group's strategy;
monitoring the implementation of the strategy
Monica Cramér Manhem, member
Barbara Nose, member
Rok Ponikvar, member
Barbara Cerovšek Zupančič, member
RISK COMMITTEE Composition:Monica Cramér Manhem, committee Chair
Barbara Nose, member
Rok Ponikvar, member
Jure Vehovec, external member
Jörgen Olsen, external member
drafting and discussing proposals and opinions for the Supervisory Board related to the Group's strategic development or planning.
monitoring the operation and suitability of the risk management system;
advising the Supervisory Board on the overall current and future risk appetite of the Company and on the risk management strategy;
supervising the implementation of the capital management strategy and material risks;
considering key internal acts and other documents in the area of risk management that have been submitted to, or are being considered or approved by, the Supervisory Board;
considering the annual capital adequacy calculation reports under Solvency II, the Solvency and Financial Condition Reports (SFCR) of the Company and the Group for each year, Own Risk and Solvency Assessment Report, the regular reports on the risk profile of the Company and the Group, and other reports, if any, related to risk management;
controlling disclosures and considering the reports of the credit rating agencies for the year.
The Nomination Committee was formed on 19 November 2024 due to the expiry of the term of office of Supervisory Board members Andrej Andoljšek and Tomaž Benčina in 2025. The committee functioned until the election of new members, shareholder representatives, at the Company's General meeting on 3 June 2025. It included Tim Umberger (president), Rok Ponikvar and Aleš Košiček (members), and external member Mateja Lovšin Herič.
Its responsibilities were:
Preparation of criteria for the selection of shareholders' representatives, unless otherwise determined by the Supervisory Board;
recording candidates for Supervisory Board's members;
call on the Appointment and Remuneration Committee to carry out the fit and proper assessment of the candidates;
submitting a proposal for the appointment of one or more candidates for shareholder representative member to the Supervisory Board, together with the proposed assessment of the competence and suitability of the candidates for members of the Supervisory Board.
Other information on the Company's Supervisory Board is presented in the business part of Annual Report, in Section 5.3.3.
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Management Board
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Remuneration policy
Remuneration of the Company's employees is arranged and regulated in accordance with the Remuneration Policy of Zavarovalnica Triglav, d.d. (hereinafter: Remuneration Policy), which is established as one of the policies by way of which the Company implements a resilient and reliable management system and ensures business integrity and transparency.
The Remuneration Policy applies to the Supervisory Board, the Management Board, executives, key function holders and other employees on individual contracts as well as other employees of the Company. The remuneration of the members of the Supervisory Board and its committees (except for the remuneration of members - external experts) is determined by the decisions of the General Meeting of Shareholders, and the remuneration of the Management Board is determined by the Supervisory Board. The remuneration of the key function holder of internal audit is determined by the Management Board and the Supervisory Board, and the remuneration of other employees is determined by Management Board. Employee remuneration is determined in proportion to the complexity, characteristics, scope of tasks or functions, powers, responsibilities and experience, considering the scope of the Company's business operations, the results achieved and comparability with the remuneration of employees in comparable companies, and in such a way that employees are encouraged to take decisions or conduct themselves in a manner that leads to the realisation of the objectives of the Company and suitable risk management.
SUPERVISORY BOARD
The remuneration of the members of the Supervisory Board and its committees is set by the General Meeting of Shareholders by way of a resolution. The remuneration consists of the remuneration for the performance of the function, bonuses for the performance of the function of Chair and Vice Chair and members of the committees of the Supervisory Board, attendance fees for attendance at the meetings, possible travel and accommodation costs. The remuneration of Supervisory Board members must be proportionate to their respective duties and the financial position of the Company and the Group. The remuneration of the Chair and members of the Supervisory Board must be such that the criteria of complexity are considered, which reflect the complexity of the operations of the Company and the Group (balance sheet total, generated net premium income, average number of employees in the last financial year, organisational complexity, internationalisation of business, complexity of direct economic environment, complexity of key products, regulation of activities and the like) and that they are comparable to the remuneration of other members of the supervisory bodies of comparable insurance groups, thereby pursuing risk management in terms of the stability and suitability of the composition of the Supervisory Board. The members of the Supervisory Board are not entitled to profit sharing.
External members of committees are paid for their work in the committees from the funds allocated for the work of the Supervisory Board. The amount of remuneration of external members is determined by the Supervisory Board in the appropriate ratio to the remuneration of the Supervisory Board's members and is not tied to the resolution of the General Meeting of Shareholders.
MANAGEMENT BOARD
The remuneration of the Management Board is determined in proportion to their duties and responsibilities, the volume of the Company's and the Group's business as well as the financial position and operating results and consists of the basic salary (fixed part of pay), a variable part of pay and other rights and benefits as set out in the Remuneration Policy. During the validity of the Act Governing the Remuneration of Managers of Companies with Majority Ownership Held by the Republic of Slovenia or Self-Governing Local Communities and the implementing
regulations issued on its basis, the limitations laid down in the said act are considered. Members of the Management Board are entitled to the use of assets owned by the Company (use of company car, company mobile phone, laptop and tablet all for business and private purposes), the right to a managerial check-up with a preventive health programme, the right to collective accident insurance under the conditions applicable to all employees, the right to pension insurance (Voluntary Supplementary Pension Insurance - PDPZ) in the amounts and under the conditions laid down for all employees, Collective Voluntary Pension Insurance - PPZ, in accordance with, or up to, the maximum amount laid down in the internal acts), the right to payment of a liability insurance premium, the right to supplementary health insurance, the right to reimbursement of education expenses and the right to reimbursement of subscriptions related to the performance of duties. No special retirement schemes or early retirement schemes apply to Management Board members.
EXECUTIVE EMPLOYEES AND OTHER EMPLOYEES WORKING UNDER INDIVIDUAL CONTRACTS
The basic salary (fixed part of pay) for executives and other employees working under individual agreements is stipulated in the employment contract, whereby the minimum and maximum basic gross salary for each group is set in accordance with internal rules. Executives and other employees on individual contracts, with the exception of employees holding the posts of Regional Director for Corporate Clients, Head of Business Unit I and Head of Business Unit II, are entitled to a variable remuneration comprising a work performance-based component and a business performance-based component, which is paid out annually. The post of Regional Director for Corporate Clients, Head of Business Unit I and Head of Business Unit II are subject to a performance-based remuneration scheme laid down in a specific decision issued by the competent Executive Director for Insurance Sales. These employees are also entitled to a business performance-based component of their salary.
EMPLOYEES WORKING UNDER A COLLECTIVE AGREEMENT
The basic salary of employees working under a collective agreement is determined by considering the qualifications and responsibilities required by the position of employment as well as how demanding the position of employment is. If they exceed the predetermined targets and expectations, they are entitled to a work performance-based part of pay (variable part of pay). The wage bill for the payment of the work performance-based part of pay is set by the Management Board in observance of operating results. In accordance with the criteria determined by the Management Board and subject to good results, workers are entitled to the operating performance-based part of pay - annual bonus.
All employees at the Company can join the collective supplemental Voluntary Supplementary Pension Insurance (PDPZ) and voluntary pension insurance (PPZ). The Company pays the premium as a proportion of the employee's gross salary for each employee in accordance with the agreement reached with the employee representatives. Collective voluntary supplementary pension insurance represents the collection of funds on the members' personal accounts with the aim of providing them with the disbursement of a supplementary old age pension from retirement onwards. Voluntary supplementary pension insurance represents saving to acquire a monthly pension payment that is paid out either from a particular date onward or from the date of retirement until the end of one's life, but for no less than 10 years.
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Related party transactions
Related parties of the Company include:
− shareholders who have a significant influence on the operations of the Company;
− Pension and Disability Insurance Institute of Slovenia (hereinafter: ZPIZ),
− Slovenian Sovereign Holding (hereinafter: SDH),
− Management Board members and their immediate family members and companies related through them, in which they have a significant influence on decision-making or are appointed to their management or supervisory body;
− Supervisory Board members and their immediate family members and companies related through them, in which they have a significant influence on decision-making or are appointed to their management or supervisory body.
Related party transactions are presented in more detail in the accounting part of Annual Report, Section 4.4. The only materially significant transaction with related parties in 2025 was the distribution of dividends to the largest owners of the Company. The Company paid a total of EUR
39.7 million to the two largest owners, of which EUR 21.9 million to ZPIZ and EUR 17.8 million to SDH.
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Governing bodies of the Company
Fit and proper requirements
In accordance with the requirements prescribed in the Solvency II Directive, Delegated Regulation, ZZavar-1 and EIOPA's Preparatory Guidelines on System of Governance, which require that the persons who manage or supervise the Company or perform work in key functions are appropriately fit (professionally qualified) and proper (of good repute and integrity).
The fit and proper assessment of the members of the Management Board, Supervisory Board, member of the Audit Committee who acts as an independent expert and is qualified in the fields of accounting and auditing and external members of other Supervisory Board's committees as well as the fit and proper assessment of the Management Board and Supervisory Board as a collective body is implemented prior to the appointment for the term of office (initial assessment), periodically (usually once a year) after the appointment of an individual member without prior assessment (subsequential assessment) and in case of circumstances that raise doubts as to the fit and proper status of Management Board and Supervisory Board members (extraordinary assessment).
As part of the assessment, Management Board and Supervisory Board members are assessed in terms of the meeting of criteria regarding fit (professional qualifications, experience, competences) and proper (clean criminal record, professional reputation, goodwill, personal integrity, financial strength) criteria. As part of the assessment of the Management Board and Supervisory Board as collective bodies, the Company checks whether all members possess collective knowledge and experience related to insurance and financial markets, the business strategy and business models, governance systems, financial and actuarial analyses, risk management and regulative frameworks as well as other legal requirements that are binding on
the Company, including sustainability reporting, cybersecurity and resilience and business continuity, tax reporting, business intelligence (BI) and artificial intelligence (AI) systems, information and communication technology (hereinafter: ICT) systems and any other requirements from competent authorities.
The fit and proper assessment of key function holders and their deputies is performed prior to the granting of the authorisation to an individual key function holder (initial assessment), periodically (once a year during the validity of the authorisation) and extraordinarily (upon the occurrence of circumstances that raise doubt as to the fit and proper status). As part of the assessment, the fitness (professional qualifications, specialised knowledge, experience and competences) and propriety criteria (clean criminal record, professional reputation, goodwill, personal integrity, financial strength) are verified, while the key function holders and their deputies are obliged to disclose by way of a statement the information on the actual or potential conflict of interest as well as the circumstances that create or could create the appearance of a conflict of interest. Key function holders and their deputies must meet the following conditions in addition to the above fitness conditions that are general in nature and apply to everyone:
Actuarial function holder and their deputy must possess the knowledge in the field of actuarial science and financial mathematics in accordance with the requirements of the AZN or be a full member of the International Actuarial Association - IAA and European Actuarial Association. They must have at least five years of experience in the actuarial field and must have performed the actuarial function and tasks of a certified actuary on a comparable portfolio for at least the last two years prior to certification.
Risk management function holder and their deputy must possess the knowledge on the application of risk management models and methods as well as no less than five years of work experience.
Compliance function holder and their deputy must possess no less than five years of work experience.
Internal audit function holder and their deputy must possess no less than five years of work experience in the field of auditing or ten years of experience in a related activity as well as the title of certified internal auditor pursuant to the act governing auditing and are registered on the list of active audited internal auditors or hold a comparable professional title in the field of internal auditing6.
Risk management system including own risk and solvency assessment
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Description of the risk management system
The risk management system consists of internal rules, competencies, processes and activities that enable the Company to quickly identify, assess and adequately control the assumed and
6 An already appointed holder of a key internal audit function and/or his/her deputy, who has not acquired the title of certified internal auditor, but at the time of appointment held the title of auditor or certified auditor and five years of professional experience in performing internal audit tasks in an insurance company, must obtain the title of certified internal auditor within the time limit set by ZZavar-1D.
emerging risks, which ensures an appropriate risk profile within certain levels in the Risk Appetite Statement. The risk management system at the Company covers all areas, focusing on those having a material impact on the business operations and capital adequacy.
The objective of the risk management system is to ensure the realisation of the Company's strategic goals, its mission and its vision. The Company has determined a certain level of risks measured by the level of potential loss that it is still willing to assume at a particular level of profitability in the course of its business operations so as to attain the set business objectives and strategic goals. When managing risk, the principle of optimal management of the ratio between risk exposure and returns and the principle of optimal cost-benefit ratio are pursued.
The four key functions play an important role in the risk management system as they actively ensure coordinated work of the Company and the transfer of knowledge and good practices to Group's undertakings. They are organised at the Company as independent organisational units, which perform their duties and responsibilities independently from one another and from other organisational units of the Company. They answer directly to the Management Board and are organised to ensure suitable internal control mechanisms at the Company. All key functions cooperate with one another and regularly exchange information required for operations. Each key function has responsibilities for the performance of tasks, processes and reporting obligations defined in the governance system.
The main building blocks of the comprehensive risk management system of the Company are the Group's strategy and the Company's Business Plan. The Company's risk management system is based on three lines of defence.
Figure 2: Risk management system at the CompanyFirst line of defence consists of business functions, which are responsible as part of their business functions for risk identification and assumptions in accordance with the Management Board's guidelines for their respective line of business and are also responsible for active operational management of specific business risks.
Second line of defence comprises key functions and decision-making bodies forming the risk management system. It includes exposure identification, assessment or measurement and monitoring procedures as well as the risk exposure limit system, including reporting. Three key functions (risk management function, the actuarial function and the compliance function) form the second line of defence. The second line of defence also includes the competent committees for the area of risk management, Fraud Management Section, Process Development, Project Management and Change Management Department, Triglav Group Subsidiary Management Division and Information Security Management Section.
Third line of defence comprises key internal audit function which reviews and assesses the adequacy and effectiveness of the governance of the Company and the Group as well as risk management and control procedures systematically and methodically, and issue recommendations for improvement. It provides for quality and continuous development of internal auditing. It collaborates with external auditors and other supervisory bodies and monitors the realisation of internal and external auditors' recommendations. It participates in the internal audits of other Group's undertakings and provides advisory services in agreement with the Management Board and the management teams of business segments.
The primary stakeholders in the risk management system are the Management Board and the Supervisory Board. The Company's Supervisory Board grants its consent to the Management Board for the written rules of the risk management system and regularly monitors the risk profile, capital adequacy and findings of the Own Risk and Solvency Assessment (hereinafter: ORSA) process at the Company and Group levels. As part of its powers and responsibilities, it considers the reports by key functions. It also grants consent to the Management Board for Company's SFCR and the Group's SFCR.
The Risk Committee operates within the Supervisory Board and monitors the functioning and adequacy of the risk management system, advises the Supervisory Body on the Company's readiness to assume risk and the Risk management strategy, considers the internal acts of the risk management system, annual capital adequacy calculation reports, Company's SFCR and Group's SFCR, ORSA reports and any other report, related to risk management. It also monitors disclosures and considers credit rating agency reports for each year.
The Company's Management Board formulates business objectives and risk appetite and adopts the Risk management strategy and risk management policies. It is responsible for the assurance of the effectiveness of the risk management system at the Company. It confirms the work plans of the individual key functions and is regularly briefed on the capital adequacy of the Company. It confirms the more important reports by key functions, including Regular Supervisory Report of Zavarovalnica Triglav (hereinafter: Company's RSR) and Regular Supervisory Report of the Triglav Group (hereinafter: Group's RSR), ORSA report and SFCR.
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Risk management strategy and the definition of the risk appetite
The Company has a risk management system in place that is defined by two overarching acts governing risk underwriting and management strategy and the risk appetite. They represent the basis and starting point for the preparation of all other subordinated internal risk management acts such as policies, methodologies and other instructions in the area of risk management at the Company. The Risk management strategy clearly defines the principles, objectives of the risk management system, the purpose of the risk appetite and the risk management system at the Company, which includes internal rules, competencies and responsibilities as well as the process of comprehensive risk management. The Risk management strategy, including the risk appetite act, is synchronized with the current Group strategy and provides the basis and guidelines for achieving strategic goals.
The risk appetite act is one of the central building blocks of the risk management system, which represents the maximum level of risk, measured by the level of potential losses that the Company is prepared to accept in the course of its business operations to achieve the set business and strategic goals. It also provides guidance for the assumption of individual risks (appetite and tolerance). Risk appetite is defined for each important risk category, which also defines key indicators for each material risk and their target and maximum values. The Company defines zero tolerance for categories of risks that it does not want to assume in its operations.
The purpose of the risk appetite act is to define the objectives regarding risk assumption and thereby define the risk profile of the Company, to establish an optimal relationship between risks and profitability and to develop a strong culture of risk management. In line with the Risk management strategy, the Company assumes underwriting, market, credit, liquidity, operational and non-financial risk.
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Risk management function
In addition to supporting the Management Board and the Supervisory Board in the effective implementation of the risk management system, the key tasks of the risk management function are to put in place, administer and monitor the risk management system, monitor the overall risk profile of the Company as a whole, identify and assess emerging risks, actively provide for the functioning of the risk management system committees, coordinate and calculate capital requirements and capital adequacy, coordinate the ORSA process and draft all other reports required by regulations and internal reports related to risk management. In addition to the above, this function is tasked with detailed unbiased reporting on risk exposure and consulting to the Management Board and the Supervisory Board regarding risk management, including strategic matters such as the Group's strategy, mergers and acquisitions as well as major business projects and investments. The function operates autonomously and independently of the other functions. It is performed by the Risk Management Department.
As part of the regular assessment of the Company's risks, the risk management function assesses the suitability and effectiveness of risk management procedures and - if it detects deviations -performs the advisory function. By providing guidelines, recommendations and proposals, it co-creates internal controls for improved monitoring of risks within a specific process, business segment or at the Company level. It notifies the risk management system committees of the
more important findings. In addition, it reports to the AZN in line with the applicable legislation relating to the tasks of the risk management function.
The risk management function holder has the role of a risk management system administrator and is directly subordinated to the Management Board, which also authorises said person based on the consent of the Supervisory Board. The findings and opinions of the risk management function holder are to be objective and independent from the influence of other business lines. The risk management function holder and other persons that perform the tasks of the risk management function at the Company have access to all Company's information required for the performance of the said tasks. The risk management function holder performs tasks as part of the second line of defence.
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Committees operating within the scope of the risk management system
Committees form the second line of defence within the risk management system and are appointed by the Management Board. Their role is mostly of a consultative nature whereby they may also be granted certain decision-making powers by the Management Board. Their purpose is to support the Management Board in the regular monitoring, coordination and provision of information on risk management at the Company as well as consider the upgrades to risk monitoring in line with their powers. In the event of major changes to the risk profile, identified risks are considered by the Risk Management Committee or the Management Board.
Figure 3: Organisational chart of the committees within the Company's risk management system as at 31 December 2025Risk Management Committee (RMC) is the Management Board's committee which is tasked with verifying the effectiveness of the functions that manage risk and ensuring that the Company has an appropriate infrastructure in place as well as adequate resources and systems that allow for an effective risk management. Apart from that, the committee assists in risk identification and management as well as in fostering the risk culture at the individual divisions within the Company. The fundamental objectives and the role of the committee are to assist the Management Board in assessing exposure to all material risks especially capital, strategic, sustainable and other non-financial risk which are not monitored by other committees. The Committee confirms and reviews the methodologies, sets risk limits, verifies compliance with Risk Appetite Statement, monitors the use of capital, considers proposals for the allocation of risk capital and participates in the ORSA process. In addition, it considers the SFCR and RSR prior to approval by the Board.
Assets and Liabilities Committee (ALCO) is the committee that is responsible for the management of market risk, liquidity risk and credit risk in the investment portfolio segment as well as life and pension insurance underwriting risk of the Company. An important task of the
committee is the confirmation of Company's asset and liability management strategy that ensures the achievement of strategic goals considering the risk appetite, risk exposure limits and any other restrictions that affect the asset and liability management process at the Company. In addition, it approves the stress scenarios and results of the market and liquidity risk stress tests under the ORSA process. The committees' work ensures the stability and profitability of operations and makes decisions that are consistent with regulatory requirements, internal policies and long-term business sustainability.
Non-life Underwriting Committee (UWC) is part of the Company's risk management system and ensures the monitoring and optimisation of the amount and concentration of assumed underwriting risk from non-life insurance products. The Committee approves the limits and transfer of underwriting risk to reinsurance, discusses the reinsurance programme and monitors the credit risk arising from exposures to reinsurers. In addition, it validates scenarios and stress test results of underwriting and credit risk under the ORSA process, monitors capital expenditure and analyses the adequacy of reinsurance coverage. It also discusses sustainability indicators on the portfolio and regular reports on the underwriting and credit risk profile.
Operational Risk and compliance Committee (ORCC) is the Management Board's committee responsible for ensuring an integrated operational risk management and compliance system in the Company. Its role includes monitoring operational risk exposure, addressing risk appetite of operational risk, validating system improvement measures, and addressing compliance and reputational risk issues. The committee covers all categories of operational risk, including project risk, outsourcing risk, and compliance risk. In addition, it addresses operational loss events, noncompliance events, and ethical dilemmas, and validates scenarios and stress test results within the ORSA process.
Non-life, life and health insurance product forums (NIPF, LIPF and HIPF) are part of the risk management system and ensure the development and adaptation of insurance products in accordance with the Company's strategy, legal requirements, professional standards and risk appetite guidelines. They consider proposals for new products and changes to existing ones, monitor the product life cycle, pricing policy, portfolio profitability, and compliance with the needs of target markets and sustainability considerations.
Project Steering Committee (PSC) is a decision-making body responsible for comprehensive project portfolio management. It is responsible for aligning project objectives with the Group's strategy, setting priorities, allocating financial resources and monitoring project implementation in terms of costs, deadlines, risks and resource use. The committee approves key project documents, monitors project progress and performs post-project analyses of business impacts. Its role also includes discussing project management methodology and project risk, as well as taking action in the event of deviations.
IT Governance and ICT Risk Committee (ICTRC) is the Management Board's committee responsible for ensuring a comprehensive and efficient IT and ICT risk management system in the Company. Its role includes monitoring ICT risk exposure, supervising the operation of information systems, communication networks, cybersecurity, business continuity and data quality. The Committee approves the strategic guidelines of informatics, the financial plan of informatics and measures for ICT risk management, monitors the implementation of measures and considers significant purchases of ICT services when they are related to critical or important
functions. In addition, it sets priorities for the development of information systems, supervises the implementation of strategic information projects and informs RMC and ORCC about ICT risk exposure.
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Risk management process
In the process of setting planning guidelines and goals for the strategic period, the scope of risks, which the Company is consciously prepared to take to achieve these goals, is defined and serves as the basis for defining the level of key indicators for ensuring compliance with the Company's risk appetite. Based on the set strategic goals, material risks are first identified annually in the ORSA process. These are risks, the realisation of which can have a significant impact on the achievement of set goals in future periods.
The risks identified in the described manner represent risks that are subsequently appropriately classified and assessed by the Company, the latter primarily in terms of the extent of the effect and the probability of occurrence. The analysis is the basis for the decisions of the Management Board regarding the method of risk management.
During the implemented cycle of the risk management system, the Company always documents the identified shortcomings and suggestions for improvements and prepares measures and recommendations for upgrading.
Figure 4: Risk management process at the CompanyThe Company regularly monitors risks by considering regular reports addressing material impacts on the risk profile and based on which appropriate measures are taken by the competent authorities as appropriate. Proper risk assessment requires the correct capture of risk exposures and a good knowledge of the properties (volatility) of risk factors and their impact on key strategic indicators.
The primary method of measuring risk is the standard formula (regulatory method), which is based on the standard volatility and risk exposures of the Company. The regulatory method is complemented by own estimates of the volatility of risk factors at the same level of confidence and period. At the same time, this regularly ensures the verification of the adequacy of the regulatory method for the Company. In addition, risks are assessed according to the methodology of the S&P Global Ratings credit rating agency.
At least once a year, a comprehensive analysis of the appropriateness of the standard formula of Delegated Regulation for the measurement of own risks is to be carried out as part of the ORSA process. In the final assessment of appropriateness, the Company also considers the results of the internal risk measurement method which is continuously upgraded.
When managing risks, the Company acts preventively whereby it applies two approaches: decomposition and diversification of individual risk types. When balancing risk exposure, the key measure is the setup of a suitable limit system that the Company adjusts to the current external developments subject to the business opportunities, whereby it remains within the defined risk appetite at all times.
The Company regularly implements risk monitoring and reports on risks in the form of standardized risk reports, which include regulatory and internal indicators for all risk and operation segments. In addition to the recommendations of the Risk Management Department, the report also contains comments on indicator trends and values in relation to the set limits and target values. The committees within the risk management system as well as the Management Board, the Supervisory Board and Risk Committee discuss risk reports within the scope of their respective powers. The risk reporting system also includes the following: Annual Report, Company's SFCR and Group's SFCR, ORSA report, RSR and other reporting to external stakeholders.
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Own risk and solvency assessment (ORSA) process
ORSA process builds on the fundamental elements of the risk management system and considers the risk profile and the defined limit system and is closely related to the strategic business planning process. This is also the main purpose of ORSA process, which refers to the assessment of the potential risks of the Company arising from the strategic business plan, which also assesses the adequacy of the future capital position in relation to the strategic business plans. ORSA process is therefore aligned with the strategic planning process of the Company, as the calculation of the planned capital adequacy is also prepared in a coordinated manner and based on the financial plan.
In addition, ORSA process examines the impact of exceptional circumstances on the level of capital adequacy by means of stress tests defined for this purpose, which are defined on the basis of current risk. The implementation of stress tests enables a more in-depth view of the risk profile and the robustness of capital adequacy, as well as the risk management system in the
Company. When examining the impact of exceptional circumstances on future solvency needs, The Company also identifies any measures necessary to maintain optimal capital adequacy.
ORSA process also verifies the appropriateness of regulatory risk measurement (determined on the basis of the so-called standard formula). Verification of the appropriateness of the standard formula is carried out regularly during the year, especially in segments where changes in the risk assessment may be greater during the year due to the volatility of risk factors, for example in the market risk area, while in the remaining segments the appropriateness of the standard formula is examined in more detail as part of ORSA process.
At the end of ORSA process, the latter is properly documented, and the final report is prepared. The results of ORSA process are reported to all internal and external stakeholders (AZN), which also includes informing the Company's Supervisory Board.
ORSA process is carried out regularly at the Company, at least once a year. Exceptionally, the process is carried out in the event of a major change in the current risk profile or when potential future changes in the Company's business model and events or scenarios in the markets where the Company operates are identified and could have a significant impact on the achievement of strategic objectives, capital adequacy or liquidity.
In 2025, regular ORSA process was carried out. In carrying out the regular ORSA process, all identified material risks of the Company up to the date of calculation were considered, as well as all identified potential risks that could affect its future operations on the basis of known information. The regular ORSA process confirmed that the Company's insurance and investment portfolio are sufficiently resilient, that the capital position is adequate and that the Company can continue to successfully confront future risk and challenges.
In 2025, the Company also underwent an extraordinary ORSA process, due to the anticipated significant change in the risk profile due to its entry into the Italian motor insurance market.
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Description of the risk management system
Internal control system
The Company's internal control system, which is based on the values and ethical principles set out in the Triglav Group Code7 encompasses risk assessment, establishment of internal controls, regular assessment of their adequacy and appropriateness, and communication and reporting to supervisory authorities and other stakeholders.
The internal control system covers all organisational units and business functions of the Company. Internal control activities are thus performed in all business and operational processes through the three lines of defence system.
The roles and responsibilities within the internal control system are distributed among business function holders who are responsible for the setup, documenting and continuous care for the effectiveness of internal controls, key functions of the second line of defence that monitor and control the suitability of internal controls and the Internal Audit Department which performs final control of the internal control system at the Company.
7 Triglav Group Code is published on the Company's website: http://www.triglav.eu.