2025 is shaping up to be a dynamic year for the global economy. Recently, IMF Managing Director Kristalina Georgieva stated that the global economy is showing greater resilience than initially expected, with global growth projected at 3.0% for 2025 and 3.1% in 2026 (IMF, October 2025). However, uncertainties remain, including market volatility, inflation risks, and growing geopolitical tensions.
For the insurance industry, these economic conditions present both challenges and opportunities. Global economic fluctuations can impact premiums, claims, and the stability of insurance companies. To address increasingly complex risks, PT. L&G Insurance Broker is here as a trusted partner, ready to help companies and individuals design the right protection strategy. With extensive experience and network, L&G Insurance Broker ensures that your assets and future are protected, despite ever-changing global conditions.
The insurance industry in Indonesia, as part of the global financial ecosystem, is certainly influenced by global economic dynamics. Insurance companies need to understand how global economic trends—such as growth, inflation, and monetary policy—can impact business risks and customer protection needs.
Furthermore, technological developments and innovation in the financial sector are also pushing insurance companies to be more adaptive. Digital transformation, risk analytics, and the use of big data are key to maintaining insurance relevance amidst economic uncertainty.
Why is this important? Because risk doesn’t wait for time. When the global economy fluctuates, your assets and investments can be impacted. Therefore, having the right insurance protection is not just an option, but a necessity. This is where PT. L&G Insurance Broker comes in, providing insurance solutions tailored to your risk profile, from property and business insurance to specialized insurance tailored to the needs of individuals and corporations.
The Impact of the Global Economy on the Insurance Industry in Indonesia
2.1 Exchange Rate Fluctuations and Inflation
A more resilient global economy doesn’t necessarily mean the insurance industry is risk-free. One tangible impact is fluctuations in currency exchange rates and inflation. The IMF noted that global currency market volatility will increase in the first half of 2025 due to international trade uncertainty and geopolitical tensions in the Middle East (IMF, 2025).
In Indonesia, fluctuations in the rupiah against the US dollar affect the value of insurance companies’ claims and investment assets. For example, if the rupiah weakens, insurance companies with claims or investments linked to the US dollar will face higher costs. According to the Financial Services Authority (OJK) report, as of June 2025, total insurance industry assets reached IDR 1,163.11 trillion, growing 3.27% annually. However, high inflation can reduce people’s purchasing power, potentially reducing demand for insurance premiums.
2.2 Credit and Investment Risk
The IMF’s assertion of global economic resilience does not preclude the possibility of credit and investment risks. Indonesian insurance companies relying on investment portfolios in global bonds or stocks face the risk of market volatility.
For example, US government bond prices fell by 1.5% in the third quarter of 2025 due to interest rate hikes to curb inflation. Insurance companies with global portfolios will feel the impact of this decline in asset values, which could impact their solvency and liquidity.
2.3 Geopolitical Tensions and Global Disasters
Global economic uncertainty is often accompanied by geopolitical tensions and global disasters. In the first half of 2025, losses from global natural disasters were estimated to reach $162 billion, including wildfires, floods, and tropical storms (Reuters, 2025).
In Indonesia, despite smaller losses, local disasters still have a significant impact. For example, flooding in Jakarta in early 2025 resulted in property insurance claims losses of Rp1.2 trillion. The local insurance industry needs to anticipate this risk by mitigating risk portfolios, improving claims management, and adjusting premiums according to regional risk profiles.
2.4 Impact on Insurance Products and Premiums
Global economic uncertainty is pushing insurance companies to adjust their products and premiums. According to OJK data, several insurance products experienced price adjustments in the first half of 2025:
- Property insurance: premiums increase by an average of 5–7% due to disaster risks and building material inflation.
- Vehicle insurance: premiums increased by 3–4% due to rising global spare parts prices.
- Business and liability insurance: premiums adjust for credit risk and investment market fluctuations.
With these changes, both companies and individuals need to review their protection needs to stay in line with their risk profiles and budgets.
Insurance Strategies and Solutions to Face Global Economic Uncertainty
3.1 Diversification of Insurance Products
One of the main strategies for dealing with global economic risks is diversification of insurance products. This means that companies and individuals don’t rely on just one type of protection, but rather have a combination that can cover a variety of potential losses.
Some relevant diversification options:
- Property and Business Insurance – Protect physical assets and inventory from the risk of fire, flood, or other natural disasters.
- Vehicle and Transportation Insurance – Ensure operational and logistics vehicles to ensure smooth operations even in the event of damage or accidents.
- Credit Insurance and Investment – Provides protection against the risk of default, contract default, or fluctuations in investment value.
- Tailored Insurance – Products tailored to the unique needs of companies, for example construction project insurance or marine cargo insurance.
With this combination, risks are spread so that potential losses due to global economic uncertainty can be minimized. PT. L&G Insurance Broker plays a role in helping to design insurance portfolios that suit the risk profiles of clients, both corporate and individual.
3.2 Utilization of Technology and Risk Analytics
Technological developments are key for the insurance industry to remain adaptive in an era of global uncertainty. Some key technological implementations include:
- Big Data Analytics: Identify risk trends, predict claims, and evaluate risks more accurately.
- Risk Modeling and Simulation: Using disaster or market volatility simulation software to prepare mitigation plans.
- Digitalization of the Claims Process: Speed up the claims process so customers can receive payments faster, maintaining customer satisfaction.
With this approach, insurance companies can mitigate complex and dynamic risks and offer more precise solutions. L&G Insurance Broker also leverages technology to tailor products and premiums to clients’ specific needs, ensuring optimal protection.
3.3 Insurance Education and Literacy
Global economic uncertainty often makes individuals and companies less aware of the importance of insurance protection. Therefore,insurance education and literacy became strategy that is no less important.
- Workshops and Webinars: Provides an understanding of risk and how to choose the right insurance product.
- Personal / Corporate Consulting: Helps assess the risk profile and determine the most appropriate type of coverage.
- Online Educational Materials: Educational articles, infographics, and videos to reach a wider audience.
With a good understanding, clients can make smarter decisions in choosing and adjusting insurance products according to their needs. PT. L&G Insurance Broker regularly provides this education to ensure customers have the right protection, while increasing their readiness to face global risks.
3.4 Proactive Risk Management
In addition to having the right products, a proactive risk management strategy is also crucial. Some steps you can implement include:
- Periodic Risk Audit: Reassess asset and operational risks periodically.
- Additional Insurance: Adding special coverage if there are new risks, such as cyber risk or geopolitical risk.
- Contingency Plan: Create emergency procedures to handle large claims or sudden disasters.
This approach allows companies and individuals to remain protected despite sudden changes in the global economy or operational risks. L&G Insurance Broker helps clients develop comprehensive risk management plans, including product recommendations, premiums, and mitigation strategies.
Case Studies and Concrete Examples
4.1 Losses Due to Exchange Rate Fluctuations and Inflation
One concrete example is a manufacturing company in Jakarta that has export-import contracts in US dollars. In the second quarter of 2025,Rupiah weakened 3.5% against the US dollar, causing the value of insurance claims to increase significantly. Losses due to currency fluctuations were recorded atRp. 15 billion only in the first six months.
Companies that do not have currency protection or additional insurance face significant liquidity risks. With the help ofL&G Insurance Broker, companies can design insurance portfolios that include currency risk hedging, credit protection, and additional coverage in accordance with international contracts.
4.2 Geopolitical Impact: Energy Crisis and Supply Disruptions
In August 2025, a drone attack on Ukraine’s energy infrastructure caused power supply disruptions and a surge in global energy prices. Logistics and transportation companies in Indonesia that depend on fuel supplies faced…operational losses of up to IDR 8 billion due to rising fuel prices and delivery delays.
The solution implemented by several companies is to use business interruption insurance which covers losses due to supply chain disruptions. L&G Insurance Broker helps tailor policies to the right coverage, including adding coverage for geopolitical risks and energy price fluctuations.
4.3 Natural Disasters and Property Risks
According to reports Reuters 2025, global losses due to natural disasters reached$162 billionin the first half of 2025. In Indonesia, the major floods in Jakarta in early 2025 resulted in property insurance claim losses of aroundRp1.2 trillion.
Companies with good risk management guided byL&G Insurance Broker utilise:
- Property location risk analysis
- Premium adjustment based on regional risk
- Diversification of property portfolio
- Additional special coverage such as natural disasters and fire risks
This approach ensures that claims that arise can be handled quickly and financial risks can be minimized.
4.4 Maritime and Logistics Industry Case Study
The global maritime industry alsoaffectedeconomic and geopolitical fluctuations. For example,Indonesian export cargo to Europe has experienced delays due to changes in tariffs and marine insurance costs.in the first semester of 2025. Companies that do not havemarine cargo insurance face the risk of total loss of goods up to 100%.
L&G Insurance Broker provides marine cargo insurance solutions that include:
- Risk of damage or loss during shipping
- Protection against the risk of war or geopolitical disturbances
- Fast and transparent claims with supply chain risk mitigation
This case study shows that the right insurance can be a crucial financial “shield” when facing global uncertainty.
4.5 Lessons from Real Cases
From all the cases above, there are several important lessons:
- Insurance must be adaptive – Standard products are sometimes not enough to face the risks of a constantly changing global economy.
- Proactive risk management – Periodic risk audits and business risk mapping are essential.
- Trusted partner – With L&G Insurance Broker, companies and individuals can design a comprehensive and tailored insurance portfolio, thus minimizing financial risk.
Conclusion and Recommendations
The global economy in 2025 is expected to show greater resilience than the IMF forecast, but uncertainty remains a challenge for the insurance industry in Indonesia. Exchange rate fluctuations, inflation, geopolitical risks, and natural disasters can impact premiums, claims, and the financial stability of companies and individuals.
To address these risks, it is important for companies and individuals to:
- Understand and map the risks that may occur.
- Diversify your insurance portfolio for greater protection.
- Leveraging technology and risk analytics for informed decision making.
- Increase insurance literacy so you can choose products that suit your needs.
- Work with professional insurance partners who understand global risk dynamics.
- L&G Insurance Broker is here to help you face global economic uncertainty with the right, flexible, and tailored insurance solutions.
Contact L&G Insurance Broker now Of +62 811-8507-773 or visit lngrisk.co.id for consultation and protection of your assets.
