The insurance industry in Indonesia is currently experiencing a challenging period. From slowing premiums to changing consumer behavior, the sector is being challenged to move more quickly and adapt. However, despite the seemingly sluggish situation, stakeholders are optimistic that insurance still plays a crucial role in maintaining economic and financial resilience. From literacy programs and product innovation to technological transformation, various efforts are being undertaken to restore public trust and expand risk protection for all levels of society. Here is a summary of seven of the most recent and comprehensive insurance news stories in Indonesia, illustrating the industry’s future direction.
There’s Still a Misconception! The Financial Services Authority (OJK) Emphasizes That Insurance Is Not a Burden, But a Family Financial Savior
The Financial Services Authority (OJK) has reiterated the importance of improving insurance literacy among the public. Education about the benefits and functions of insurance is considered the first step in building sustainable financial protection for Indonesian families.
In the Special Chat program Pro 4 RRI Makassar, the Head of the OJK Division of South Sulawesi and West Sulawesi Province, Amiruddin, was present.Muhidu, with the Chairman of the Indonesian General Insurance Association (AAUI) Makassar Branch, Firman Baso, as the main resource person.
Both agreed that literacy is the main key to restoring and strengthening public trust in the national insurance industry.
Insurance Literacy Still Low
Amiruddin revealed that public understanding of insurance in Indonesia is still relatively low. Many consider insurance to be limited to compensation for losses, yet its functions are much broader.
“Insurance is not just about compensation, but about being prepared to face future risks,” Amiruddin emphasized.
He added that people need to start viewing insurance as a form of financial protection, not an additional expense burden.
Synergy between AAUI and Media for Public Education
Meanwhile, Firman Baso, Chairman of the Makassar Branch of AAUI, emphasized the importance of collaboration between institutions, media, and the community in expanding the reach of education.
According to him, proper understanding will make people smarter and more critical in choosing insurance products that suit their needs.
“We want the public to know their rights and obligations as policyholders. From there, trust in this industry can grow stronger,” said Firman.
Firman also added that the insurance industry is currently transforming to become more transparent, accessible, and relevant to the needs of modern society.
RRI Becomes the Vanguard of Financial Literacy
The discussion also highlighted the role of public media outlets like RRI Pro 4 Makassar. They are considered strategically positioned to disseminate accurate and easy-to-understand financial information, particularly to communities in regions lacking extensive financial education.
Through collaboration between OJK, AAUI, and RRI, it is hoped that public awareness of financial literacy and insurance can increase significantly.
With a better understanding, people will be better prepared to face life’s risks, while building a strong and independent family economic foundation.
Source: https://rri.co.id/daerah/1921038/ojk-tekankan-pentingnya-literasi-asuransi-masyarakat
Employee Health Insurance Costs in Asia Will Rise Again by 2026! These Are the Countries Most Affected, According to Aon
Employee health insurance program costs in the Asia-Pacific (APAC) region are expected to rise by 11.3 percent by 2026, according to a recent Aon report. This increase shows signs of stabilizing after two years of sharp increases.
According to Insurance Asia, Thursday (October 23, 2025), global healthcare costs are also projected to increase by 9.8 percent. Tim Dwyner, Aon’s Head of APAC Human Resources, stated that the biggest challenge for employers is shifting from a reactive approach to costs to a more proactive and sustainable wellness strategy.
“As companies face workforce transformation, building robust employee benefits programs will be key to safeguarding the well-being of their workforce,” Dwyner said.
According to the report, several key markets such as China, India, Singapore, the Philippines, and Vietnam are expected to experience more moderate increases compared to the previous year.
- China: 7.8 percent (down from 8 percent)
- India: 11.5 percent (down from 13 percent)
- Singapore: 13 percent (down from 14 percent)
- Philippines: 14 percent (down from 15 percent)
- Vietnam: 12.2 percent (down from 12.9 percent)
Aon noted that about a third of the APAC market expects a lower medical cost trend, driven by declining healthcare utilization and increasingly active wellness programs by companies.
However, most other regions still face high cost pressures, primarily due to chronic diseases, increased use of medical services, and rising prices of medical technology. Diseases such as cardiovascular disease, digestive disorders, and cancer remain the main drivers of rising healthcare costs.
In response to this trend, many employers are now introducing flexible benefits, cost-containment programs, and employee wellness initiatives as part of a long-term strategy to manage health insurance costs.
These findings come from Aon’s Global Medical Cost Trends 2026 Report, based on insights from more than 100 consulting firms that handle corporate health insurance programs across the globe.
Food Security Threatened, Askrindo Prepares Innovative Insurance Solutions for Farmers
Climate change is now having a significant impact on Indonesia’s agricultural sector. Statistics Indonesia (BPS) data shows that national rice production will decline by 1.55%, from 53.98 million tons in 2023 to 53.14 million tons in 2024. This situation is stifling farmer welfare and threatening national food security.
To address this challenge, PT Asuransi Kredit Indonesia (Askrindo), a member of the IFG Holding, partnered with PT Tugu Insurance to introduce an agricultural co-insurance scheme based on Agritech technology. This innovation provides a modern financial protection solution for farmers amidst climate change.
This progressive step led Askrindo to a runner-up position in the Call for Proposals – Inclusive Insurance Challenge Fund (IICF) 2025, organized by AAUI and UNDP IRFF. The award was presented at the AAUI 29th Indonesia Rendezvous in Bali, attended by 800 delegates from 20 countries.
Askrindo Business Director Budhi Novianto explained that this product was developed to expedite claim payments and reduce administrative costs. Unlike conventional models that require field verification, parametric-based insurance allows for automatic claims based on indicators such as rainfall or crop yields below certain thresholds.
“Parametric agricultural insurance makes the claims process faster, more transparent, and more efficient. However, it still requires accurate data and precise index design,” said Budhi.
Through this innovation, Askrindo strives to provide adaptive, digital, and inclusive agricultural insurance, in line with the government’s mission to strengthen national food security.
“We are optimistic that Agritech technology can expand the reach of protection and improve the welfare of Indonesian farmers,” Budhi concluded.
Unit-Linked Premiums Drop 11%, Signing Customers Are Becoming Smarter in Choosing Insurance
Investment-linked insurance (PAYDI) or unit-linked insurance products have seen significant premium declines over the past two years. However, despite this downward trend, these products remain a vital part of the Indonesian life insurance industry’s portfolio.
According to data from the Indonesian Life Insurance Association (AAJI), total unit-linked premiums in the first half of 2025 reached Rp32.4 trillion, down 11.7% compared to Rp36.68 trillion in the same period last year. This decrease is indeed slight.slow downcompared to the first semester of 2024 which plummeted by 13.8% (year-on-year).
However, experts believe the direction of the insurance market is now shifting. Kapler Marpaung, a lecturer in the Master of Management program at Gadjah Mada University (UGM) and an insurance industry observer, emphasized that the future prospects of unit-linked products depend heavily on internal improvements in insurance companies and the direction of OJK regulations.
“Unit-linked funds need improvement, especially in terms of selecting underlying assets. For the time being, it’s best to avoid investing in stocks, as the risks are too high and often lead to defaults,” Kapler said.
He added that the OJK needs to review its unit-linked investment policy, ensuring that the majority of funds are placed in fixed-income instruments or more protected assets. This step is considered to restore public confidence following several past defaults.
Interestingly, market trends show that customers now prefer pure life insurance (protection) products over unit-linked ones. People’s mindsets are shifting: they’re no longer looking for investment returns, but rather for long-term financial protection.
“Nowadays, customers buy insurance policies not because of the promise of high returns, but because they want security and protection,” Kapler emphasized.
For L&G Insurance Broker, this phenomenon is a positive sign for the industry. The shift in public interest toward protection-based products demonstrates a new awareness of the importance of risk protection over investment speculation.
L&G also believes that insurance brokers have a strategic role in helping customers understand the differences between pure protection and unit-linked products, and in choosing the insurance solution that best suits their financial needs and risk profile.
This is a Portrait of the Financial Industry in the Prabowo-Gibran Era! Multifinance Slumps, Insurance Recovers, and Online Loans Continue to Grow
Entering the first year of the administration of President Prabowo Subianto and Vice President Gibran Rakabuming Raka, Indonesia’s non-bank financial sector has shown stability, but is still struggling to cope with pressures on people’s purchasing power, regulatory changes, and global economic uncertainty.
Multifinance: Slight Growth, Pressured by Purchasing Power
Based on OJK data, the multifinance industry’s financing receivables reached an average of IDR 504.6 trillion in the November 2024–August 2025 period. The highest growth occurred in March 2025 at 4.6% (YoY).
However, the declining purchasing power of the people has made growthslow downThe automotive sector, a key driver, also declined. Despite this, the non-performing financing (NPF) ratio remained safe at 2.51%, well below the 5% threshold.
Insurance: Starting to Recover, But Still Sluggish
In the commercial insurance sector, premiums declined in early 2025, but have since grown again since April, reaching IDR 219.52 trillion in August 2025. Life insurance premiums continued to decline by 1.21% (YoY), while general insurance and reinsurance grew by 2.42%.
Insurance claims were recorded to have fallen 5.33% to Rp141.65 trillion, indicating a decrease in claim frequency.
Meanwhile, non-commercial insurance (BPJS, Taspen, Asabri) grew 5.71% to Rp127.19 trillion, even though the claim value was higher than the premium.
Regulators are also preparing new regulations regarding risk sharing (co-payment) and the development of parametric disaster insurance that can pay out claims within 7–14 days.
Online Lending: Still Growing, But Vulnerable to Risk
In the fintech lending industry, outstanding financing rose 21.6% year-on-year to IDR 87.61 trillion in August 2025, with the non-performing loan ratio (TWP90) maintained at 2.6%.
However, there are still 9 out of 96 organizers who have not met the minimum capital.
The OJK also continues to take firm action against illegal entities; since 2017, more than 13,000 illegal platforms have been blocked, including 1,556 online lending platforms through 2025.
The latest case is the default of the Sharia Fund, which is being closely monitored by the OJK due to borrowers’ difficulties in repaying their loans.
Despite stability under the new administration, the non-bank sector still faces challenges from weak purchasing power, regulatory adjustments, and credit risk. The government and regulators need to strengthen reforms and oversight to ensure the non-bank financial industry continues to grow healthily and sustainably.
General Insurance is Sluggish, But Hope Still Remains! Expert Advice on Saving the Industry
The Financial Services Authority (OJK) noted that general insurance and reinsurance premiums grew 2.42% (YoY) to IDR 102.01 trillion as of August 2025. This rateslow downcompared to the same period last year which reached 12.89%, and slightly decreased compared to July 2025 which grew 2.67%.
According to Wahyudin Rahman, a risk management practitioner and Chairman of the Indonesian Insurance Writers Community (Kupasi), this slowdown was triggered by still-moderate domestic economic activity, the impact of inflation, and high interest rates that have suppressed people’s purchasing power. “The automotive, property, and financing sectors, which have historically been the main drivers of premium growth, have also slowed,” he explained.
Furthermore, many companies are now implementing efficiency measures and adjusting premium rates to balance growth and profitability, particularly following the surge in claims in the health and motor vehicle sectors. “So, it’s not just purchasing power that matters, but also underwriting and risk management strategies that play a major role,” added Wahyudin, who also serves as Head of the Transformation and Strategic Initiatives Division at PT Asuransi Asei Indonesia.
He highlighted that the main challenge for the insurance industry today is maintaining profits amidst rapid growth.slow down, high claims burdens, and a tightening global reinsurance market. Limited reinsurance capacity requires domestic companies to be more cautious in risk management.
Furthermore, Wahyudin emphasized the still-low level of digitalization and insurance literacy, as well as intense tariff competition, which forces companies to continuously innovate. He recommended that industry players strengthen product innovation, expand penetration into the retail and MSME segments, and collaborate with the digital financial sector.
A data-driven underwriting approach is also considered crucial for improving risk accuracy, while transparency and prompt claims services will maintain customer trust. “Customer trust is the foundation of the insurance industry’s long-term growth,” he emphasized.
Wahyudin projects that by the end of 2025, general insurance and reinsurance premium growth will be in the range of 4%-5%, slightly below the initial target of 6%-7%.
40% of MSMEs Fail to Recover After Disasters, Insurance Is the Solution!
The Ministry of Micro, Small, and Medium Enterprises (MSMEs) emphasized that insurance plays a vital role in maintaining the economic resilience and business sustainability of MSMEs. MSMEs Minister Maman Abdurrahman highlighted the importance of insurance as a risk mitigation tool amid global economic uncertainty and the increasing impact of climate change on the business world.
“In today’s era, insurance is not only a protector, but also a pillar of business sustainability,” said Maman in an official statement, Saturday (18/10/2025).
According to 2024 Asian Development Bank (ADB) data, the MSME sector, particularly micro-enterprises, remains the most vulnerable group to economic shocks and disasters. In fact, 40% of MSMEs fail to survive a disaster, and 25% recover after more than two years.
However, only around 2.96% of MSMEs in Indonesia have disaster insurance, while more than half (53%) do not have any emergency plan at all to face disaster risks.
Maman emphasized that insurance should be understood not only as financial protection but also as motivation to recover from business impacts. He also highlighted the low levels of insurance literacy and inclusion among small business owners.
“Low insurance literacy is not just a matter of knowledge, but also a matter of business resilience,” he said.
Furthermore, Maman explained that insurance also plays a crucial role in supporting productive government financing, such as the People’s Business Credit (KUR) program. Through insurance protection, financing distribution is expected to be more secure and sustainable.
As of October 17, 2025, KUR disbursement had reached IDR 217.1 trillion for 3.69 million MSMEs, of which 60.6%, or around IDR 129 trillion, was channeled to the production sector to encourage a multiplier effect on the national economy.
“If the production sector continues to be strengthened through financing and insurance protection, the economic benefits will be even broader,” Maman added.
He concluded with optimism that collaboration between the government, the insurance industry, and MSMEs would be key to creating sustainable financing and national economic growth.
“Insurance is a crucial foundation for ensuring that MSMEs can survive, grow, and become the backbone of the Indonesian economy,” he stressed.
The national insurance industry still has a long way to go, but bright spots are beginning to emerge. Digital transformation, increased literacy, and regulatory support are the foundation for delivering insurance services that are faster, more transparent, and more relevant to the needs of modern society. Experts emphasize that the key to revival lies in the industry’s ability to maintain customer trust and prioritize protection as its primary goal. With synergy between the government, industry, media, and the public, insurance will not only recover—it will also grow into a vital pillar of Indonesia’s economic resilience.
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