COSMOS INSURANCE COMPANY PUBLIC LTD. Solvency and Financial Condition Report 2022
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
A. Business Performance 7
A.1 Business 7
A.2 Underwriting performance 9
A.3 Investment Performance 12
B. System of Governance 15
B.1 General information on the system of governance 15
B.2 Fit and proper requirements 21
B.3 Risk management system including the own risk and solvency assessment 22
B.4 Own Risk and Solvency Assessment (ORSA) 29
B.5 Internal control system 31
B.6 Internal Audit Function 32
B.7 Actuarial Function 33
B.8 Outsourcing 34
B.9 Adequacy of the system of governance 36
B.10 Any other information 36
C. Risk Profile 37
C.1 Underwriting Risk 38
C.2 Market risk 43
C.3 Counterparty Default Risk 48
C.4 Liquidity risk 51
C.5 Operational risk 54
C.6 Other material risks 56
D. Valuation for solvency purposes 58
D.1 Assets 58
D.2 Technical provisions 62
D.3 Other liabilities 67
E. Capital Management 69
E.1 Own Funds 69
E.2 Compliance with the MCR and SCR 74
F. Appendices 76
Appendix A:Cosmos Organisational Structure 76
Appendix B:Extracts from Annual QRTs 77
Appendix C:Abbreviations 89
Appendix D:Auditors Report 90
COSMOS INSURANCE COMPANY PUBLIC LTD
HEAD OFFICE
Page 2 of 90
T: +357 22 796000 | F: +357 22 022000
Executive Summary
I.
Purpose 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 and performance, system of governance, risk profile, valuation for solvency purposes and capital management.
The present SFCR has been prepared with reference date 31st December 2022 and has been approved by the Company's Board of Directors on 30th March 2023.
II.
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.
Cosmos operates island-wide through its large network of insurance intermediaries and through its offices in Nicosia, Larnaca, Limassol and Paphos. The Company employs sixty-five (65) well-trained individuals and maintains cooperation with more than one hundred and twenty (120) insurance intermediaries throughout the island.
The Company maintains a loyal network of insurance agents and clients. Service standards and claim settlement in particular have remained intact and Cosmos enjoys a very good reputation in the market.
Cosmos ranked 12th in 2022 (in comparison to 11th in 2021) in terms of market share in the Non-Life Insurance Industry, with total GWP amounting to €18,78m. Motor insurance is the Company's biggest line of business followed by the General Liability line 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.
COSMOS INSURANCE COMPANY PUBLIC LTD
HEAD OFFICE
Page 3 of 90
T: +357 22 796000 | F: +357 22 022000
III.
Business and Performance
The Company's main lines of business ("LoBs") are Motor, Accident & Health, Fire and Liability. The Company's net technical results for 2022 amounted to €1.3m profit as follows:
Amounts in EUR (€) | A&HMOTORMATFIRELIABILITY | TOTAL |
Gross Premiums written | 2.837.987 471.415 (162.933) 12.225.229 11.159.097 (6.255.533)
37.355 (168.099) | 18.781.371 12.738.673 (6.625.219) (2.101.582) (2.726.188) |
Net Premiums earned | ||
Net Claims Incurred | ||
Net Commissions and Acquisition Costs | ||
Operating Expenses | ||
Underwriting Results | 15.439 541.846 22.960 463.076 242.363 | 1.285.684 |
Table 1: Underwriting Results 2022 per LoB
Overall, the Company's gross written premiums ("GWP") were approximately €18,8m in 2022, recording a decrease of 8,1%% or €1,6m compared to 2021.
During 2022, the Company experienced a significant decrease in GWP from Liability LoB and a small decrease in GWP of Motor LoB, which was partially offset by increases in the volume of written premiums from all other lines of business.
The decrease in Motor LoB GWP was mainly attributed to the decision of the Company to reduce exposure from a particular type of portfolio. On the other hand, Company's efforts to increase its share in other profitable line of business such as Fire was considered as successful, taken into consideration, the aggressive approach from Bank-affiliated insurance companies.
Moreover, Company's expenses were reduced mainly due to the improvement of loss ratios in all lines of business.
The Business performance of the Company is further analysed in Section A of this report. IV. 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 run 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.
COSMOS INSURANCE COMPANY PUBLIC LTD
HEAD OFFICE
T: +357 22 796000 | F: +357 22 022000
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. V. 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 2022 together with their allocation of SCR are presented below:
Operational Risk; 6,4%
Market risk; 26,2%
Non-Life Underwriting risks; 52,5%
Counterparty risk; 13,6%
Health Underwriting risks; 1,3%
Figure 1: Cosmos SCR Components as at 31/12/2022
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 relatively high and is substantially driven due to the large portfolio of properties and the significant exposure of the Company in Property risk.
The Risk profile of the Company is further analysed in Section C of this report.
COSMOS INSURANCE COMPANY PUBLIC LTD
HEAD OFFICE
T: +357 22 796000 | F: +357 22 022000
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Cosmos Insurance pcl published this content on 31 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 March 2023 05:23:07 UTC.
