The Indonesian insurance industry continues to adapt to economic dynamics, technological developments, and increasingly complex regulatory changes. New policies, product innovations, and business strategies implemented by industry players are critical concerns because they impact both companies and the public as policyholders.
Here are the latest developments that you need to know as part of an effort to understand the direction of growth and transformation of the national insurance industry.
Sharia Insurance Investment Returns Drop Sharply, Industry Faces Financial Market Pressure
The investment performance of the Islamic insurance industry came under pressure throughout 2026 due to weakening financial market conditions. According to data from the Financial Services Authority (OJK), Islamic insurance investment returns reached Rp177.13 billion as of May 2026, a significant decrease compared to Rp2.2 trillion in the same period the previous year.
The decline was influenced by corrections in the stock market and pressure in the bond market due to increasing macroeconomic risks and capital outflows (capital out flow This condition has caused the value of various investment instruments to decline, thus impacting the portfolio performance of Islamic insurance companies.
Sharia Insurance observer, Wahju Rohmanti, believes that companies need to implement a more disciplined investment strategy by prioritizing the principle of asset liability matching This approach aims to align investment fund allocation with the company’s liability profile to optimally manage risk. Fixed-income instruments such as bonds and sukuk are still considered relevant options for maintaining portfolio stability.
Despite the challenges, the investment outlook for Islamic insurance remains promising until the end of 2026 if economic conditions stabilize. Furthermore, higher interest rates could increase the attractiveness of money market instruments and Government Securities (SBN). With adaptive portfolio management and robust risk management, the Islamic insurance industry is expected to sustainably improve its investment performance.
Source: https://keuangan.kontan.co.id/news/hasil-investasi-asuransi-syariah-tergerus-ini-penyebabnya
An Integrated Customer Journey is Key to the Insurance Industry’s Digital Transformation
Digital transformation has transformed the way people interact with insurance companies. From searching for information on social media, consulting via WhatsApp, purchasing policies digitally, to filing claims online, the entire process now takes place through various communication channels.
According to Infobip, the insurance industry’s primary challenge is no longer simply adding digital channels, but rather delivering a consistent and connected customer experience at every point of interaction. To address this challenge, companies need to integrate customer data and leverage artificial intelligence (AI) to make communications more relevant, personalized, and efficient.
Through technologies such as Agent OS And Conversational AI, companies can understand customer needs, provide easy-to-understand information, and determine the most appropriate communication time and medium. This technology can also automate administrative processes, while addressing needs requiring empathy and more in-depth explanations remains the responsibility of human agents.
This approach is believed to improve service quality, expedite the policy purchasing process, and simplify claims submission. Going forward, the success of digital transformation in the insurance industry will be measured not only by the number of available communication channels, but also by a company’s ability to build strong relationships, enhance customer trust, and deliver an integrated and sustainable service experience at every stage of the customer journey.
Demand for Child Insurance Increases, Family Protection Awareness Increases
Indonesians’ awareness of the importance of financial protection for families continues to grow. This is reflected in the growing interest in child insurance products, especially among young families who begin planning for their children’s future at an early age.
PT Prudential Sharia Life Assurance (Prudential Syariah) sees this positive trend as a signal that people are no longer just focusing on self-protection, but are also starting to prepare for long-term needs such as education costs, health protection, life insurance, and family inheritance planning.
To address these needs, Prudential Syariah offers a variety of family protection solutions, including products designed to assist with children’s education planning while providing financial protection against unexpected risks. The company also continues to strengthen public education on the importance of financial protection from an early age as part of family financial planning.
This strategy is also supported by the company’s positive performance. In the first quarter of 2026, Prudential Syariah posted total contribution revenue of Rp1.05 trillion, while total assets increased 19% to Rp8 trillion compared to the same period the previous year.
Given this trend, child insurance is expected to continue to be a growing segment, as public awareness increases about building family financial resilience and providing the best protection for the future of the next generation.
As Electric Vehicle Sales Rise, Insurance Industry Sees New Opportunities
The growth in electric vehicle sales in Indonesia is opening up new opportunities for the general insurance industry. According to data from the Association of Indonesian Automotive Industries (GAIKINDO), electric vehicle sales in the first half of 2026 reached 117,108 units, or approximately 26.8% of total national vehicle sales. This figure represents a significant increase compared to the 18.3% share in the same period the previous year.
The Indonesian General Insurance Association (AAUI) believes the increasing number of electric vehicles will drive public demand for insurance protection. Risks such as accidents, loss, natural disasters, and third-party legal liability are crucial reasons for vehicle owners to have adequate protection.
However, the industry still faces several challenges. One is the limited historical data on electric vehicle claims, which is necessary for developing more accurate underwriting models and setting premiums. Furthermore, electric vehicles have distinct risk characteristics, particularly related to the high value of their batteries, the need for specialized technicians and repair shops, and the potential for damage to the electrical system.
Going forward, insurance companies are expected to not only offer products that are in line with developments in vehicle technology, but also strengthen public education, clarify policy provisions, and improve the quality of claims services to optimize protection for electric vehicles and keep pace with the ever-expanding market.
OJK Prepares New PAYDI Regulations to Strengthen Consumer Protection
The Financial Services Authority (OJK) is currently drafting a Draft Regulation (RPOJK) concerning Investment-Linked Insurance Products (PAYDI) as part of efforts to strengthen governance in the life insurance industry. Targeted for completion by the end of 2026, the regulation focuses on increasing transparency in product marketing and enhancing consumer protection.
One of the main concerns in drafting these regulations is the prevention of corrupt practices.mis-selling, namely the sale of products that do not meet the customer’s needs or risk profile. The OJK is also reviewing more effective marketing process documentation mechanisms, including the use of digital media such as recorded videos (pre-recorded video) and other forms of documentation. This step is expected to help potential customers understand the benefits, costs, risks, and characteristics of the product before making an investment decision.
On the other hand, PAYDI product performance continues to show a positive trend. As of May 2026, PAYDI premium revenue reached IDR 18.79 trillion, representing a 13.71% year-on-year growth. This product also contributed approximately 24.47% to the total premiums in the life insurance industry.
Through this new regulation, the OJK hopes that insurance companies can market PAYDI products more transparently, in accordance with customer needs, and be able to create healthy, sustainable industry growth and further increase public trust in investment-based insurance products.
AI and Data Integration Are Key to the Digital Transformation of the Insurance Industry
Digital transformation has become a key strategy for the insurance industry to improve service quality and expand market penetration in Indonesia. Amid changing consumer behavior, which increasingly relies on digital services, insurance companies are required to deliver faster, more personalized, and more integrated customer experiences.
One of the important steps is to integrate customer data through Customer Data Platform (CDP) With this system, all customer interaction history across various communication channels can be compiled into a single profile, enabling companies to provide more relevant services tailored to each customer’s needs.
In addition, the utilization of Conversational AI It’s considered to help improve insurance literacy. This technology can explain complex insurance terms in simpler language, providing information on policy benefits, premiums, and the claims process, making it easier for potential customers to understand the products offered.
Digital transformation also needs to be supported by collaboration between artificial intelligence and human agents (hybrid agent). AI can handle repetitive administrative processes, while agents focus on providing consultation and solutions that require empathy and professional judgment.
With a strong data foundation, the use of AI, and services that remain oriented to customer needs, insurance companies are expected to be able to improve operational efficiency, strengthen customer trust, and encourage the growth of insurance penetration in Indonesia.
OJK Prepares New RBC Method, Measuring Insurance Solvency to Be More Risk-Sensitive
The Financial Services Authority (OJK) is currently preparing to implement a new method for calculating Risk Based Capital (RBC) or the solvency ratio of insurance companies. Through this approach New RBC, the regulator wants to present a more accurate measurement system and reflect the risk profile of each company.
Based on the results of a trial of 10 insurance companies, most showed a decrease in solvency ratios when using the new method. However, the Financial Services Authority (OJK) emphasized that these results do not indicate a deterioration in the industry’s financial condition. Rather, the New RBC method is designed to be more sensitive in measuring the various risks faced by companies than the current method.
As a follow-up, the OJK has refined the methodology and incorporated it into the Draft OJK Regulation (RPOJK) on Solvency Levels. The draft is currently in the consultation and stakeholder input stage before being officially implemented.
OJK also encourages all insurance companies to carry out gap analysis and financial impact analysis to gauge readiness for the implementation of the new regulations. Through the New RBC, the regulator hopes to make the insurance industry’s capital oversight system more risk-based, strengthen company resilience, and enhance the long-term stability of the insurance industry without compromising business readiness.
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This development demonstrates that the insurance industry continues to adapt to meet challenges and capitalize on emerging opportunities amidst market changes. Collaboration between regulators, insurance companies, and all stakeholders is expected to create an increasingly healthy, innovative, and consumer-protection-oriented industry. This will ensure continued public trust in insurance and support sustainable industry growth.
To ensure optimal risk protection for your business or individual, you can consult with an L&G Insurance Broker. L&G’s professional team is ready to help provide the right, comprehensive insurance solution tailored to your needs.
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