The Indonesian insurance industry has once again been rocked by a series of major news stories with direct impacts on policyholders, industry players, and the wider public. From the massive floods in Sumatra that could potentially trigger claims of up to Rp100 billion, a surge in new regulations that are changing the direction of the insurance business, to unpredictable premium trends—all indicate that the national insurance ecosystem is entering a phase of major transformation. In this edition of Risk & Insurance Review, we summarize the seven most important and impactful insurance news stories you need to know to understand the current state of the industry and prepare your strategy for the future.
The Policy Guarantee Program Will Be Effective Soon! Insurance Premiums Predicted to Skyrocket, Can the Public Finally Calm Down?
The Policy Guarantee Program (PPP), a new mandate of the Indonesia Deposit Insurance Corporation (LPS) under Law No. 4 of 2023, is predicted to be a major game-changer for the Indonesian insurance industry. Ferdinan D. Purba, a member of the LPS Board of Commissioners, stated that the PPP will significantly increase public trust, similar to what occurred in the banking industry after LPS managed the deposit guarantee program. As trust increases, insurance premiums are predicted to surge.
Malaysia’s example demonstrates a similar trend. After the policy guarantee program was implemented in 2010, premium growth increased from 5.5% to 9.7% per year. Indonesia has the potential to follow this trend when the PPP officially goes live in 2028, or sooner, in 2027 if regulations are expedited.
The PPP will provide three protections: policy claims coverage in the event of company failure, portfolio transfer to a healthy company, and policy repayment within the coverage limits. The coverage value is estimated at IDR 500–700 million—protecting approximately 90% of policyholders.
This step is crucial considering Indonesia’s low insurance penetration, at only 1.40%, significantly lower than other ASEAN countries. The numerous revocations of insurance company licenses since 2016 have further eroded public trust. PPP is expected to be the solution for comprehensive industry recovery.
Life Insurance Premiums Have Fallen Sharply! But Is There a Surprising Trend That Could Actually Fuel the Industry’s Growth?
The Indonesian Life Insurance Association (AAJI) reported interesting dynamics in the performance of the life insurance industry throughout January–September 2025. New business premiums from single premiums were recorded to have plummeted 9.9% to IDR 50.18 trillion, down from IDR 55.68 trillion in the same period in 2024. This decline indicates pressure on people’s purchasing power, which has not yet recovered, resulting in a further decrease in the allocation of funds for large premium payments.
However, first-year regular premiums actually rose slightly by 1.2% to Rp 22.74 trillion. This increase is seen as a sign of growing public awareness of the need for insurance protection and a shift in preference to installment premium payments, which are more financially friendly.
AAJI noted that insurance companies are now actively expanding their markets to smaller cities and the lower-middle segment. This strategy is starting to bear fruit, as evidenced by a 5% increase in total regular premium income to Rp 83.04 trillion. Overall, total industry revenue reached Rp 174.21 trillion—a 3.2% increase compared to 2024.
The number of insured also increased significantly. Group insured increased 12.1% to 129.25 million people, while individual insured increased 16.9% to 22.32 million people. This data shows that despite the decline in single premiums, public interest in life insurance is actually growing.
Source: https://www.tempo.co/ekonomi/aaji-kesadaran-punya-asuransi-naik-namun-daya-beli-belum-pulih-2097272
TUGU Dominates High-Risk Businesses! Dominance in Marine, Aviation, Energy, and Property Shocks the Industry
The Indonesian insurance industry has once again highlighted four strategic business lines that contribute the most premiums: marine hull, aviation, offshore energy, and property. Among the major players, TUGU stands out, thanks to its consistent dominance in this high-risk segment. The latest data shows TUGU regaining its top spot in marine hull and aviation, while also rising to second place in property and maintaining its second place in offshore energy.
Ajaib Sekuritas analyst Rizal Rafly views this achievement as strong evidence that TUGU possesses strong technical capabilities and underwriting discipline. Business lines like aviation and energy are known to have significant risk exposure, meaning only companies with strong reinsurance protection and rigorous risk management can survive.
Financially, TUGU’s fundamentals are increasingly solid. As of September 2025, the company recorded a Risk-Based Capital (RBC) of 360.9% and an Investment Adequacy Ratio (RKI) of 272%, exceeding the industry average. This performance contributed to a net profit of Rp594.82 billion and insurance service revenue of Rp5.98 trillion. An aggressive yet measured investment strategy also resulted in a 21% increase in investment returns.
With total assets growing 19.7% to Rp32.12 trillion, TUGU further strengthens its position as a leader in the specialty risks segment and a key driver of industry growth.
Global Unit Link Insurance Explodes, While Indonesia’s Insurance Plummets! Here’s Why Premiums Plunge 17% and Who’s to Blame?
Globally, the unit-linked market is predicted to experience explosive growth, reaching a value of US$3.3 trillion by 2034. This product, which combines protection and investment, is popular for its flexibility, profitability, and relevance for long-term financial planning. Asia Pacific is a key driver of growth thanks to increasing financial literacy and income.
However, this global trend contrasts with the situation in Indonesia. The domestic unit-linked market has actually slumped due to tightening regulations since the issuance of SEOJK 5/2022. The Financial Services Authority (OJK) recorded a 17.57% drop in unit-linked premium revenue in the third quarter of 2025, to IDR 30.67 trillion. The cause is not a loss of public interest, but rather a decrease in agent aggressiveness, which now has to meet much stricter marketing requirements. As a result, many insurance companies have shifted their distribution strategies to bancassurance.
In fact, in terms of investment performance, a number of unit-linked funds have actually recorded very high returns. Some products have even achieved returns exceeding 80% in a year, such as Simas Jiwa Equity Fund 2, which achieved 86.81%.
This phenomenon highlights that the problem with unit-linked products in Indonesia isn’t with the product itself, but rather with sales, which were previously prone to misselling. While global growth is booming, Indonesia remains hampered by regulations and the recovery of customer trust.
Massive Floods in Sumatra! AAJI Ready to Pay Rp100 Billion in Claims, Impact on the Life Insurance Industry
The Indonesian Life Insurance Association (AAJI) is beginning to prepare for a potential surge in claims following the massive floods that hit Aceh, North Sumatra, and West Sumatra. AAJI Board Chairman Budi Tampubolon revealed that the industry could potentially pay out death benefit claims worth between Rp 50 billion and Rp 100 billion, as the death toll continues to rise. Although the value of insurance coverage exposure in the three provinces reaches trillions of rupiah, not all policyholders are directly affected.
Budi emphasized that the claim estimate was calculated based on the estimated number of deaths, not the total number of policyholders in the region. This means the financial risk to the industry remains within reasonable and manageable limits. Nevertheless, AAJI is taking precautionary measures to ensure a smooth claims process for eligible families.
The life insurance industry views this incident as a reminder of the importance of life insurance literacy and penetration, especially in disaster-prone areas. Given the significant risk exposure in Sumatra, AAJI reaffirms its commitment to maintaining public trust through prompt and accurate claim payments. This major flooding also demonstrates the vital role of life insurance as financial protection when unexpected disasters occur.
Health Insurance Premiums Can’t Be Increased Just Like That! OJK Reveals New Rules All Participants Must Know
The Financial Services Authority (OJK) emphasized that insurance companies cannot raise health premiums at will. At a Working Meeting of Commission XI of the House of Representatives (DPR), Ogi Prastomiyono, Chief Executive of the OJK Non-Bank Financial Services Authority (IKNB), stated that repricing may only occur when the policy contract expires or upon renewal. During the contract period, premiums must remain the same and cannot be increased suddenly.
Furthermore, the OJK limits premium reviews to a maximum of once per year. Premium adjustments may only be made based on claims history, increased risk, or inflation—no other reasons. This provision is designed to protect participants from unfair premium increases.
Ogi also explained the waiting period rules for individual participants. For new policies, the waiting period for general claims is a maximum of 30 days, while for chronic or specific illnesses, the waiting period is 6 months—shortened from the previous 12 months. This reduction is intended to prevent participants from paying long premiums without benefits.
If the policy is renewed, the waiting period no longer applies, allowing the insured to immediately begin using the insurance benefits. For group insurance, the waiting period is determined by the contractual agreement between the policyholder and the insurance company.
Christmas and New Year Holidays Drive Insurance Boom! Travel Insurance Demand Rises Sharply, with Young People the Main Driver
The Financial Services Authority (OJK) estimates that the travel insurance sector will see significant growth ahead of the Christmas and New Year (Nataru) holidays. Ogi Prastomiyono, Chief Executive of the OJK Insurance Supervisory Agency, explained that increased public mobility is a key driver of rising premiums from travel insurance products, thus supporting the growth of the insurance industry as a whole.
This view aligns with the Indonesian General Insurance Association (AAUI). AAUI’s Deputy Chair for Statistics and Research, Trinita Situmeang, stated that the surge in demand has been felt since October and is expected to continue through the end of the year. The long holiday period has made people more aware of the importance of travel protection, particularly regarding the risk of flight delays and the need for mandatory insurance when applying for visas.
An interesting demographic trend is also emerging: young people are becoming the largest buyers of travel insurance, particularly through digital channels that offer easy access. In addition to driving sales, this phenomenon also contributes to public awareness of protection products. According to AAUI data, the miscellaneous insurance line, which includes travel insurance, recorded premiums of IDR 3.93 trillion in the third quarter of 2025, a 9.4% year-on-year increase.
Recent developments in the Indonesian insurance industry demonstrate one thing: significant change is underway, and all stakeholders must move quickly to adapt. From premium dynamics and new regulations to the performance of major companies, to catastrophic claims, each event offers important lessons for companies, brokers, and policyholders alike. By reading this summary, you’ll be one step closer to being prepared for the changes in the years ahead. Stay alert, stay informed, and ensure your insurance coverage remains relevant to evolving risks.
—
DON’T WASTE YOUR TIME AND SECURE YOUR FINANCIAL AND BUSINESS WITH THE RIGHT INSURANCE.
HOTLINE L&G 24 JAM: 0811-8507-773(CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
—
