Liga Asuransi – The insurance industry in Indonesia is facing a major wave of change with the presence of various new regulations from the Financial Services Authority (OJK). From minimum capital regulations that threaten the sustainability of 27 insurance companies to third party liability (TPL) insurance policies that have pros and cons, each new policy has a significant impact on industry players, policyholders and the national economy. In the midst of this uncertainty, stakeholders are trying to find solutions and navigate change to ensure the sustainability of the insurance industry in the future. Check out the latest insurance news summary which will provide in-depth insight into the challenges and opportunities that exist.
Impact of Mandatory TPL Insurance: Protection or Economic Burden?
The Center of Economic and Law Studies (Celios) released research results regarding the negative impact of implementing mandatory vehicle insurance which includes third party liability (TPL). This study projects that this policy could reduce economic output by IDR 68.3 trillion, reduce gross domestic product (GDP) by IDR 21 trillion, and cause a decrease in people’s income by IDR 20.7 trillion. In addition, labor absorption is estimated to decrease by 3.4 million people.
However, this research received a response from Wahyudin Rahman, a risk management practitioner and General Chair of the Indonesian Insurance Writers Community (Kupasi). Kupasi himself is an extraordinary member of the Indonesian Insurance Council (DAI). Wahyudin questioned the conclusions drawn in the research, emphasizing that TPL insurance actually provides significant financial protection. He explained that the premiums paid could prevent greater losses due to lawsuits or accident compensation. Apart from that, according to him, paying insurance premiums is not just a reduction in consumption, but a diversion of spending into a form of protection.
Furthermore, Wahyudin assessed that the Celios study did not consider the multiplier effect of the insurance industry. According to him, this sector has the potential to create new jobs and increase economic competitiveness. He also denied the notion that TPL premiums would be a burden on the lower middle class, stating that TPL premium rates were relatively small, ranging from IDR 10,000 to IDR 600,000 per year, depending on the coverage limit chosen. This amount is much lower than the potential losses due to accidents.
Apart from that, Wahyudin emphasized that this policy will be implemented in stages for owners of four-wheeled vehicles or more. With this gradual approach, TPL insurance should not be considered a burden, but rather as a form of emergency funding and financial planning. He analogized insurance premiums to savings that can be used to overcome the risk of accidents, especially for people with limited incomes who may experience difficulties if they have to bear the costs of damage or compensation due to accidents.
On the other hand, Celios’ Director of Digital Economy, Nailul Huda, emphasized that their research takes into account the long-term impact up to 2045. He highlighted that the mandatory TPL insurance policy, although it has a good aim in providing financial protection for vehicle owners and accident victims, still risks adding to society’s economic burden. Huda also stated that regional income from the food and beverage supply sector is estimated to have decreased by up to IDR 354 billion as a result of this policy.
Seeing the potential for broad economic impacts, Celios recommends that the government reconsider the implementation of the mandatory TPL insurance policy by paying attention to the social and economic impacts that may arise. This debate shows the need for further study to ensure a balance between financial protection and the economic impact on society at large.
Jiwasraya Officially Closes in 2025! Pensioners Bill for Rights of IDR 371.79 Billion
PT Asuransi Jiwasraya (Persero) is now just a memory. This state-owned insurance company is certain to officially close in 2025. This decision marks the end of Jiwasraya’s long journey after years of facing a prolonged financial crisis.
Until 2023, the net assets of the Jiwasraya Employer Pension Fund (DPPK) will be recorded at IDR 96.07 billion. However, the actuarial value that should have reached IDR 467.86 billion, so there is a difference of IDR 371.79 billion. This lack of funds is now the main demand of the Central Jiwasraya Pensioners Association (PPJ), which asks that their rights be fulfilled immediately.
Lutfi, a representative from PPJ, explained that there were three main sources that would be used to pay the shortfall. First, disbursement of remaining DPPK assets which include share ownership and other assets. Second, funds from the sale of remaining assets. Third, disbursement of assets that are still in the liquidation process.
Even though the government has tried to save Jiwasraya through various restructuring schemes, the harsh reality remains unavoidable. Now, retirees hope that their rights can be paid off immediately before the company officially closes. What will happen to retirees next? The public is still waiting for confirmation from the relevant parties!
Source: https://keuangan.kontan.co.id/news/manajemen-sebut-asuransi-jiwasraya-resmi-akan-bubar-tahun-ini
OJK predicts life insurance growth in 2025 will only be 2% -4%, what’s wrong?
The Financial Services Authority (OJK) estimates that growth in life insurance industry assets in 2025 will only be in the range of 2%-4%. This figure is much lower than general insurance growth which is estimated to reach 8%-10% and pension funds which are projected to grow 9%-11%.
Chief Executive of the OJK Insurance, Guarantee and Pension Fund Supervisor, Ogi Prastomiyono, emphasized that the growth of the insurance industry cannot only depend on the efforts of each company, but requires collaboration from all stakeholders. He emphasized the importance of synergy between ministries and institutions that issue policies in the form of laws and regulations to support this industry. He made this statement at the Regulatory Dissemination Day 2025 event in Jakarta, Monday (3/2/2025).
Responding to this prediction, the Executive Director of the Indonesian Life Insurance Association (AAJI), Togar Pasaribu, stated that the life insurance industry is currently still in a transition period due to various regulatory changes, especially those relating to Investment Linked Insurance Products (PAYDI) or unit-linked. According to him, changes to regulations, especially regarding marketing agents, require quite a long period of socialization.
“The system at PAYDI is complex. If there are changes to regulations, especially in marketing by agents, of course there must be extensive socialization. This process cannot be done in a short time, even one year is not enough,” explained Togar.
Apart from regulations, he also highlighted mandatory recording regulations in insurance marketing, which he considered could make potential policyholders feel doubtful or reluctant to buy. He added that voice recordings are not considered valid evidence in court, unlike the policyholder’s signature which has stronger legal force.
Another challenge is the implementation of the international accounting standard IFRS 17 or PSAK 117 which will come into effect in January 2025. Togar said that this new accounting system will change the way profits and losses are reported in the life insurance industry.
“The implementation of PSAK 117 will bring big changes. Some will look like they are making a profit, some will look like they are making a loss, even though operationally there are no significant changes. This could affect the perception of the insurance industry,” he said.
With these various challenges, Togar projects that life insurance asset growth this year will likely still be below 5%. However, he remains optimistic that industry revenues will increase, especially as more players start selling unit-linked and PAYDI products.
Based on OJK data, total insurance industry assets as of December 2024 reached IDR 1,133.87 trillion. Meanwhile, AAJI noted that the total assets of the life insurance industry as of January-September 2024 amounted to IDR 630.12 trillion, growing 3.2% compared to IDR 610.79 trillion in the same period the previous year.
On the other hand, the Indonesian General Insurance Association (AAUI) reported that general insurance assets reached IDR 234.84 trillion, an increase of 14.12% on an annual basis (YoY). Reinsurance assets also grew 5.29% to IDR 39.82 trillion. Meanwhile, the total assets of the pension fund industry reached IDR 1,508.21 trillion as of December 2024, an increase of 7.31% compared to the previous year.
With a situation that is still full of challenges, life insurance industry players now face the difficult task of adapting to new regulations and increasing public trust. Will this sector be able to rise amidst pressure? We are waiting for further developments!
New OJK Regulations: Big Transformation in the Insurance Industry, Who Will Survive?
The Financial Services Authority (OJK) is increasingly strengthening the insurance sector by implementing new regulations. Throughout 2023–2024, the OJK through the Insurance Supervision, Pension Funds, Financing Institutions and Other Financial Services Institutions (PPDP) sector has issued 18 OJK Regulations (POJK) and 10 OJK Circular Letters (SEOJK). Most of these regulations are a follow-up to Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (UU P2SK), which focuses on strengthening the insurance industry.
OJK Focuses on Improving Governance and Capital
Chief Executive of the OJK PPDP Supervisor, Ogi Prastomiyono, emphasized that this new regulation aims to strengthen the insurance sector from the aspects of governance, risk management and capital. According to him, previously existing regulations were still not enough to create a stronger industry.
“This new regulation is to strengthen governance, risk management and capital adequacy. “We also emphasize the importance of enforcement so that this regulation is truly effective,” said Ogi at the Regulatory Dissemination Day 2025 event in Jakarta, Monday (3/2/2025).
Ogi emphasized that the regulations issued had gone through various stages, including consultation with business actors and associations, as well as harmonization with relevant ministries. The main aim of this regulation is to ensure that the insurance industry can survive in the long term and have strong competitiveness.
OJK Capital Challenges and Solutions
One of the main challenges in the insurance industry is the company’s financial capacity to fulfill its obligations to policyholders. OJK sets rules for increasing insurance company equity in stages to ensure the industry remains stable.
“We are implementing the equity increase in two stages, namely the end of 2026 and the end of 2028. Currently, most companies have met the first target, but there are still some that have not achieved it. “We provide various alternatives, such as looking for strategic partners or joining the Insurance Company Business Group (KUPA),” explained Ogi.
This KUPA scheme allows insurance companies with limited capital to merge with other companies that have greater equity, similar to Bank Business Groups (KUB) in the banking sector. This step provides a solution for companies that have not met the minimum capital so they can continue operating without having to close down immediately.
AAJI Response: Industry Still in Transition Period
Executive Director of the Indonesian Life Insurance Association (AAJI), Togar Pasaribu, welcomed OJK’s policy regarding increasing capital. He believes that the insurance industry roadmap so far is in line with OJK policy, so it should not be a big issue for insurance companies.
“Insurance companies that have not met the minimum capital can form a KUPA, so they do not have to be closed immediately. “This provides certainty for the industry and protection for policyholders,” said Togar.
Apart from capital, Togar also highlighted challenges related to new regulations, such as changes to the rules regarding Investment-Linked Insurance Products (PAYDI) or unit-linked. According to him, the system in this product is quite complex, and regulatory changes require a long period of socialization so that all parties understand the new rules.
He also assessed that the growth of the life insurance industry, which only reached 2%–4% last year, was still within reasonable limits, considering that the industry was in a transition period. However, he is optimistic that in 2025 growth will improve along with the implementation of the new accounting standard PSAK 117.
“January 2025, PSAK 117 comes into effect, and this will change many things. “We hope that this change will not further slow down industrial growth,” said Togar.
OJK Optimism: Insurance Industry will Recover in 2025
Even though the industry is still facing big challenges, OJK remains optimistic that 2025 will be a year of recovery. Ogi projects that general insurance industry assets could grow 8%–10%, life insurance 2%–4%, and pension funds grow even higher, namely 9%–11%.
However, this growth can only be achieved if there is synergy between all stakeholders. “We not only waited, but also picked up the ball. “Collaboration is the key so that this industry can recover more quickly,” concluded Ogi.
With various new regulations being implemented, the insurance industry in Indonesia is entering a major transformation phase. The question is, are all companies ready to survive and adapt? Only time will tell!
The Constitutional Court’s Decision Makes Insurance Policies Must Be Revised, Companies Can No Longer Cancel Unilaterally!
The Indonesian insurance world is experiencing major changes after the Constitutional Court (MK) decided that Article 251 of the Commercial Code (KUHD) was unconstitutional. This decision shook the insurance industry because it removed the legal basis for insurance companies to cancel policies unilaterally. Now, the Indonesian Life Insurance Association (AAJI) and the Indonesian General Insurance Association (AAUI) are working together to revise insurance policies to comply with new regulations.
You Can No Longer Cancel Policies Unilaterally, Companies Must Comply with New Rules!
AAJI Executive Director, Togar Pasaribu, emphasized that the Constitutional Court’s decision strengthens the principle utmost good faith or good faith, which means cancellation of the policy can only be done by agreement of both parties or through court. Togar highlighted that many parties are still confused about the difference between policy cancellation and claim rejection. “What the Constitutional Court decided was about policy cancellation, not claim rejection,” he explained when met in Jakarta on Tuesday (4/2/2025).
With this new rule, policies can no longer be simply canceled by insurance companies. Therefore, AAJI is currently reviewing how the policy cancellation mechanism will be implemented in the future. “The question is, when can the policy be cancelled? Before or after the claim? If after a claim, it is not called cancellation, but prosecution. So, the only logic is that cancellation must be done before claiming.” explained Togar.
As a solution, AAJI plans to adjust the Life Insurance Application Letter (SPAJ) document, policy, or even add a special sheet that regulates the policy cancellation clause. However, discussions are still ongoing to determine the most effective format.
AAUI Joins the Move! Policy evaluation will be carried out immediately
AAUI General Chair, Budi Herawan, also emphasized that the general insurance association will immediately evaluate all policies currently in circulation. “We at AAUI immediately moved to evaluate the existing policies, both those that are still in effect and those that will be issued,” said Budi in an interview with CNBC Indonesia on Tuesday (21/1/2025).
This revision process is targeted to be completed within one month. After that, the revised results will be discussed with regulators to obtain final approval before being widely implemented.
OJK: Policy Clauses Must Be More Transparent and Easy to Understand!
The Financial Services Authority (OJK) welcomed the Constitutional Court’s decision and emphasized the importance of improvements to policy clauses, especially those relating to cancellation. OJK encourages the insurance industry to ensure that every clause in the policy is more transparent and easy for customers to understand.
Apart from that, OJK also requested that cancellation clauses and limitation of rights be included in the Insurance Application Letter (SPA) document so that prospective policy holders understand their rights and obligations from the start.
Conclusion: The Insurance Industry Is Improving in a Big Way!
This Constitutional Court decision has had a major impact on the insurance industry in Indonesia. Insurance companies can no longer cancel policies unilaterally, and major revisions to policy documents are underway. With this change, it is hoped that protection for policy holders will become stronger and transparency in the insurance industry will increase.
For policyholders, this is good news! You no longer need to worry about your policy being suddenly canceled without approval. However, please read every provision in the new policy carefully to avoid misunderstandings in the future!
AAJI House Completed! Insurance Innovation and Education Center Ready to Operate
The construction of the Indonesian Life Insurance Association (AAJI) Graha building has officially reached its final stage. On Tuesday (4/2/2025), AAJI held a topping off event which marked the completion of the main phase of building construction located on Jl. Fatmawati Raya No. 14 this. Designed as a center for innovation and education for the life insurance industry, Grha AAJI is expected to become a forum for collaboration for various stakeholders.
This event was attended by around 100 invited guests, including the AAJI management board, regional officials, and media crew. In his speech, Chairman of the AAJI Management Board, Budi Tampubolon, said that the construction of Grha AAJI was born from the enthusiasm to improve the competence of human resources (HR) in the insurance sector.
“The idea for this development was inspired by the direction of the first Chairman of the OJK, Mr. Muliaman D. Hadad, who emphasized the importance of centers of excellence in the insurance industry. “We want Grha AAJI to become an education center that can be utilized not only by the life insurance industry, but also general insurance, sharia and brokers,” said Budi.
Insurance Training and Certification Center
AAJI is now increasingly focused on improving the quality of human resources in the insurance industry. Through Grha AAJI, the association will regularly hold training, seminars and strategic discussions to strengthen the professionalism of industry players. AAJI Supervisory Board, Firdaus Djaelani, added that for more than two decades, AAJI has been a forum for communication and increasing competency for life insurance players in Indonesia.
“Grha AAJI will function as a center for education, training and certification for insurance agents and the wider community. “With the support of the Indonesian Insurance and Services Expert Professional Certification Institute (LSP AAJI), we are committed to continuing to contribute to building a more professional and competitive insurance industry,” explained Firdaus.
Symbol of the Future of the Life Insurance Industry
Chairman of the Grha AAJI Development Team, Wiroyo Karsono, revealed that this project had gone through various stages since groundbreaking until finally reaching the topping off stage according to the set schedule. The 1,841 square meter land consisting of three land certificates is now officially an AAJI asset.
“We ensure that every construction process runs well through close collaboration between the construction team, quantity surveyors and project management. “This building is not just infrastructure, but a symbol of AAJI’s commitment to building the future of the life insurance industry,” explained Wiroyo.
It is hoped that Grha AAJI can start operating at the end of 2025 and have a positive impact on industry and society at large. With modern facilities and an environmentally friendly concept, this building will become a center for education, training and innovation that will encourage increased literacy and professionalism in the life insurance sector.
“This topping off marks a step forward for the insurance industry in creating a more professional and highly competitive ecosystem. “We are optimistic that the presence of Grha AAJI will make a major contribution to the growth of the life insurance industry in Indonesia,” concluded Wiroyo.
27 Insurance Companies Threatened! Could New OJK Regulations Regarding Minimum Capital Make You Bankrupt?
New regulations from the Financial Services Authority (OJK) have the potential to shake up the general insurance industry in Indonesia. Based on OJK Regulation (POJK) No. 20/2023, general insurance companies are required to have a minimum equity of IDR 250 billion in order to continue operating and marketing insurance and suretyship products. However, this policy is said to threaten the sustainability of 27 insurance companies that have not met the minimum capital requirements.
The President Director of PT Asuransi Kredit Indonesia (Askrindo), Fankar Umran, revealed that of the total of 72 conventional general insurance companies in Indonesia, 27 of them still have equity below IDR 250 billion. Even though this group only contributes around 10% of the general insurance premium market share, the number is quite significant, reaching 37.5% of the total existing general insurance companies.
“This group is the most affected by this policy. Of the 72 companies, 27 are still under IDR 250 billion, while the others have larger capital,” said Fankar in an insurance media webinar on Thursday (30/1/2025).
On the other hand, there are 17 companies with capital above IDR 1 trillion which control 62% of the market share, while 7 other companies have capital between IDR 500 billion and IDR 1 trillion with a market share of 9%. Apart from that, there are 21 companies that have capital between IDR 250 billion and IDR 500 billion, with a premium market share of 19%.
Crisis Impact and Delayed Spillover Effects
Fankar also highlighted the existence of a “lagging spill over effect” or delayed spillover effects due to the economic crisis. According to him, the impact of crises, such as those that occurred during the COVID-19 pandemic in 2020, is still felt today. This is evident from the increasing ratio of credit insurance claims, which jumped from 61% in 2019 to 86% in the third quarter of 2024.
He emphasized that although strengthening capital is very necessary to increase the stability of the insurance industry, this regulation must also provide room for growth for companies that have not met the minimum capital requirements. “Capital strengthening is necessary, but it must be done in a way that still provides a fair opportunity for all companies to continue to survive,” he added.
AAUI asks OJK for relaxation
The General Chair of the Indonesian General Insurance Association (AAUI), Budi Herawan, revealed that his party had written to the OJK requesting relaxation of time in fulfilling the minimum equity as regulated in POJK 20/2023.
“We have submitted a request to the OJK to be given time relaxation, at least until the end of 2026. However, until now, we have not received a response from the regulator,” said Budi.
AAUI hopes that OJK will provide time leeway similar to the provisions in POJK 23 of 2023, which provides a stage for capital fulfillment until 2026. According to Budi, uncertainty related to the implementation of the Statement of Financial Accounting Standards (PSAK) 117 is also a challenge for the general insurance industry.
“If the OJK does not provide relaxation, the fate of these companies could be threatened. Therefore, we continue to fight for them to be given the opportunity until 2026 to meet the minimum capital requirements,” he stressed.
With this policy, the future of the 27 affected insurance companies is now in the hands of the OJK. Will regulators make concessions or stick to rules that could put some companies out of business? We are waiting for further developments!
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