The beginning of 2026 will be a period of both pressure and opportunity for the insurance industry in Indonesia. Amidst financial market turmoil, regulatory changes, and increasingly complex global dynamics, industry players are being challenged to be more adaptive and strategic. The Financial Services Authority (OJK) notes that various factors, ranging from stock market volatility and government fiscal policies to global geopolitical risks, are increasingly influencing the direction of industry growth.
However, despite these pressures, positive signals have emerged from a number of policies and reforms that have the potential to strengthen the industry’s foundations going forward. So, what exactly is the current landscape of the Indonesian insurance industry? Here’s a summary of 7 recent news stories you should know.
The Jakarta Composite Index (JCI) Fluctuates in Early 2026! The Financial Services Authority (OJK) Reveals the Impact on Insurance Investments, as the Industry Begins to Play It Safe
The Financial Services Authority (OJK) highlighted the high pressure and volatility in the domestic stock market, reflected in the movement of the Jakarta Composite Index (JCI) in early 2026. This condition is considered to have the potential to impact the investment performance of the insurance industry, particularly in stock instruments.
Ogi Prastomiyono, Chief Executive of the Insurance, Guarantee, and Pension Fund Supervisory Agency (OJK), stated that in volatile market conditions, insurance companies tend to be more cautious in managing their investment portfolios. Strategy adjustments are made to maintain a balance between potential returns and risks, while ensuring compliance with long-term obligations to policyholders.
In practice, insurance companies evaluate and adjust their investment composition to maintain performance stability amid market volatility. A prudent approach is key, given the industry’s heavy reliance on long-term risk management.
Based on data as of January 2026, the commercial insurance industry’s investment in stocks was recorded at approximately 17.51% of total investment. This figure represents a slight decrease compared to the previous period, in line with the continued volatility in the stock market.
This conservative move reflects the insurance industry’s efforts to maintain financial health amid market uncertainty.
Policy Guarantee Program Ready to Launch in 2027! AAJI Optimistic It Can Boost Public Trust
The Indonesian Life Insurance Association (AAJI) has expressed its support for the planned launch of an insurance policy guarantee program, which is targeted to begin in 2027. This program is considered an important step in increasing public trust in the life insurance industry.
AAJI Board Chairman Albertus Wiryono Karsono acknowledged that the program’s implementation still faces several challenges. However, he is optimistic that the launch target can still be achieved if all parties, including regulators and industry players, work together.
In the initial scheme, the proposed coverage ranges from Rp 500 million to Rp 700 million. This amount is expected to be sufficient to provide basic protection while expanding the public’s access to insurance products.
This program is planned to be implemented by the Deposit Insurance Corporation (LPS), which has currently completed approximately 70–80% of preparations, both in terms of infrastructure and policy. However, its implementation still awaits the revision of Law No. 4 of 2023 concerning P2SK as the legal basis.
AAJI believes that this program will be a game changer, similar to the role of LPS in the banking sector, in strengthening the public’s sense of security and trust in the insurance industry.
PSAK 117 a Tough Test! OJK Firmly Resolves: No Relaxation; Insurance Companies Must Comply or Face Sanctions
The Financial Services Authority (OJK) has reaffirmed its commitment to implementing PSAK 117 despite the various challenges facing the insurance industry. The new accounting standard is considered crucial for promoting transparency and more sustainable business growth in the insurance sector.
Ogi Prastomiyono, Chief Executive of the Financial Services Authority (OJK), stated that no decision has yet been made regarding any relaxation or dispensation for insurance companies. The OJK has set the deadline for submitting audited annual financial reports for 2025 as April 30, 2026.
Ogi emphasized that companies that do not fulfill these obligations will be subject to sanctions and are required to prepare an action plan to complete the audit process.
On the other hand, IFG Life acknowledged that implementing PSAK 117 presents a significant challenge for the industry. IFG Life’s Finance Director, Ryan Diastana Firman, stated that nearly all insurance companies face similar challenges in adapting to the new standard.
Nevertheless, IFG Life affirmed its readiness to continue complying with regulatory requirements. The implementation of PSAK 117 is expected to strengthen governance, increase transparency, and bolster public trust in the national insurance industry.
Fitch’s Alarm! Indonesian Life Insurance Premiums Predicted to Stagnate in 2026, Unit Links Under Increasing Pressure
Fitch Ratings Report inAPAC Insurance Outlook 2026projected that life insurance premiums in Indonesia would tend to stagnate throughout 2026, after previously experiencing a decline in 2025. This condition was influenced by sluggish sales of unit link products which were still under pressure due to the processredesignproducts and market volatility.
In contrast, traditional insurance products have shown positive growth. These products, which account for approximately 63% of total premiums, have grown due to increased public awareness of health protection and financial risks.
On the capital side, the Financial Services Authority (OJK) is considered successful in encouraging industry discipline by increasing the minimum equity threshold. The majority of insurance companies have complied with this requirement, although pressure remains on players with weaker capitalization.
However, industry challenges remain. Fitch highlighted high credit insurance claims due to economic pressures, as well as rising healthcare claims driven by medical inflation and high service utilization.
Furthermore, the implementation of PSAK 117 starting in 2025 will also result in a decline in industry equity of around 5%. Going forward, the new capital regulations are expected to strengthen large companies while simultaneously pressuring smaller players to adapt more quickly.
Shipbuilding Industry Reviving! OJK Says Insurance Companies Ready to Seize New Opportunities in the Maritime Sector
The government’s push to revive the national shipbuilding industry is considered to have a positive impact on the insurance industry. The Financial Services Authority (OJK) sees this policy as potentially opening significant opportunities, as the need for risk protection in the maritime sector increases.
Ogi Prastomiyono, Chief Executive of the Financial Services Authority (OJK), stated that increased ship construction and maintenance activities will drive demand for various insurance products. Business lines potentially positively impacted include marine hull insurance, marine cargo insurance, and insurance related to ship construction and operations.
Meanwhile, Purbaya Yudhi Sadewa, as Minister of Finance, is pushing for various regulations and incentives to reduce domestic shipbuilding costs. These policies include facilitating component imports and incentives for new ship orders at domestic shipyards, which are expected to boost demand from both state-owned enterprises and the private sector.
This step is also supported by a statement by Hashim S. Djojohadikusumo who said the government would provide various facilities to accelerate the growth of the industry.
Industry-wide insurance performance also showed a positive trend. The Financial Services Authority (OJK) reported that general insurance and reinsurance premium revenue reached IDR 18.42 trillion as of January 2026, representing a 17.92% year-on-year growth, with a solvency ratio (RBC) remaining strong and above the regulatory threshold.
Property VAT Covered by the Government! OJK Reveals Impact on Insurance: Positive or Negative?
The government’s policy of extending the 100% Government-Borne Value Added Tax (PPN DTP) incentive for the property sector until 2026 is considered to have a positive impact on the insurance industry. This regulation, stipulated in Minister of Finance Regulation No. 90 of 2025, covers landed houses and apartments valued at up to IDR 5 billion.
The Financial Services Authority (OJK) believes this policy has the potential to boost property insurance growth, in line with the increase in home purchase transactions, which generally include insurance coverage. Ogi Prastomiyono, Chief Executive of the OJK Insurance Supervisory Agency, stated that the property insurance line was a major contributor to premium growth, with a significant increase of 46.40% year-on-year as of January 2026.
However, the Indonesian General Insurance Association (AAUI) believes the impact of this policy needs to be considered proportionally. AAUI Chairman Budi Herawan explained that while incentives can boost residential property transactions, property insurance premiums are still dominated by the commercial sector, such as office buildings, factories, and industrial facilities.
Furthermore, the public’s still-selective purchasing power is a limiting factor in the growth of the retail segment. However, overall, the property insurance line is projected to remain a key driver of premium growth in the general insurance industry in 2026.
Source: https://keuangan.kontan.co.id/news/ojk-insentif-ppn-dtp-100-berdampak-positif-bagi-asuransi-properti
The US-Israel vs. Iran Conflict Sparks Alarm! The Financial Services Authority (OJK) Says Indonesian Insurance Companies Are Under Pressure and Premiums Could Rise
The Financial Services Authority (OJK) has warned that escalating geopolitical tensions between the United States, Israel, and Iran have the potential to put pressure on the general insurance industry in Indonesia. The conflict is believed to trigger increased risks across various business sectors, particularly those related to global trade and transportation.
Ogi Prastomiyono, Chief Executive of the Financial Services Authority (OJK), explained that potential immediate impacts include increased logistics costs, supply chain disruptions, and energy price volatility. These conditions have the potential to increase risk exposure for insurance companies.
The most impacted business sectors include marine cargo, property, and onshore energy. These three sectors are highly sensitive to global dynamics, particularly disruptions in goods distribution and fluctuations in energy prices.
Furthermore, global turmoil also has the potential to drive up insurance premiums, particularly for products with international exposure. This is influenced by rising reinsurance prices and heightened market risk perceptions.
However, premium adjustments are generally carried out gradually while still prioritizing the principle of prudence.
On the other hand, market volatility also has the potential to impact investment-based products like unit-linked products. However, as of January 2026, cash value claims for PAYDI products continued to decline, indicating the impact was not yet significant.
Overall, the Indonesian insurance industry currently stands at a crossroads between pressure and transformation. On the one hand, challenges such as market volatility, surging claims, and global uncertainty still loom. However, on the other hand, regulatory pressure, opportunities from the real sector, and policy plans such as policy underwriting are paving the way for a stronger and more credible industry.
The role of regulators such as the Financial Services Authority and the Deposit Insurance Corporation will be key to maintaining stability and fostering public trust. Going forward, insurance companies will be required not only to survive but also to adapt quickly to remain relevant amidst increasingly dynamic changes.
