Liga Asuransi – The Indonesian insurance industry has once again been in the public spotlight with various important developments throughout this week. These include news of the handling of thousands of victims of the free meal poisoning program, which will be covered by insurance, and the government’s major steps to strengthen financial sector protection through the new role of the Deposit Insurance Corporation (LPS). Furthermore, positive trends are also evident in the sharia insurance industry, the consolidation of state-owned insurance companies, and the readiness of minimum capital regulations to ensure the national industry’s ability to compete globally. Here’s a summary of 7 of the most updated and comprehensive insurance news in Indonesia that you must know.
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Can You Pay for Electricity and Get Disaster Insurance at the Same Time? Here’s an Asset Protection Scheme Amid High Risk in Indonesia
Property insurance, such as property insurance and natural disaster protection, is increasingly crucial for Indonesians. This is due to the fact that Indonesia has one of the highest natural disaster risk levels in the world. Recognizing this, the government plans to form an insurance consortium to implement a parametric insurance scheme as a form of disaster protection.
Ignatius Hendrawan, Director and Chief Technical Officer of Allianz Utama Indonesia, explained that similar mechanisms have already been implemented in several countries. For example, in Turkey, property and disaster insurance are integrated into monthly electricity bills. Other countries also include it in payments for water utilities and land and building taxes (PBB).
“In my opinion, there are many ways to distribute this property insurance product. This scheme could also expand insurance penetration to remote areas,” Hendrawan said at the event.Media Workshop titled “Protect Assets, Protect Your Business: Property Insurance in the Face of Disaster Risk”Thursday (October 2, 2025). With an integrated payment model, even people in remote areas can receive regular coverage when paying for public services provided by the government.
Faster Claim Process
One of the public’s biggest concerns about insurance is claims. Hendrawan emphasized that Allianz Utama Indonesia has prepared a fast-track claims process. For claims with small losses, a loss assessor (loss adjuster) will immediately conduct a survey and provide a compensation offer that can be agreed on the spot by the customer and the insurance company.
In disaster cases, this method is projected to resolve approximately 20–30% of claims quickly. Meanwhile, large claims will be followed up with more detailed loss assessments at a later stage. “With this scheme, claims can be processed more quickly to prevent backlogs,” he added.
Comprehensive Protection from Allianz
As part of the Allianz Group, Allianz Utama offers a comprehensive Property All Risk solution. This product covers business assets such as offices, factories, warehouses, and other commercial buildings. It also offers extended coverage for floods, earthquakes, and theft. This insurance not only covers physical damage but also protects against potential loss of income due to operational disruptions following a disaster.
Official! LPS Can Now Rescue Troubled Insurance Companies, Not Just Banks
Deposit Guarantee Board (LPS)LPS has now officially acquired a new function. Previously, it only handled bank resolution and rescue, but in the future, LPS will also have the authority to conduct resolutions on insurance companies and sharia insurance.
These provisions are stated inDraft Law on the Development and Strengthening of the Financial Sector (RUU P2SK)which revises Law Number 4 of 2023. The bill was passed on Thursday (2/10/2025) in the DPR Plenary Session as a DPR initiative proposal.
Deputy Chairman of Commission XI of the DPR and Chairman of the Working Committee for the P2SK Bill,Mohammad Hekal, explained that this additional authority is intended to provide certainty of protection to policyholders when insurance companies face serious problems.
“Until now, if an insurance company failed, it would be handed over to the LPS to be closed or liquidated. Now, with the new regulations, the LPS can do so.”early resolution”If the company can still be saved,” explained Hekal.
New Functions of LPS
Article 4 of the P2SK Bill states that the LPS’s functions now include:
a. Guaranteeing depositors’ deposits;
b. Guaranteeing insurance policies;
c. Maintaining the stability of the financial system in accordance with authority;
d. Carry out bank resolution;
e. Carrying out resolutions of insurance companies and sharia insurance.
Meanwhile, under the old law, LPS was only authorized to resolve problems of insurance companies whose permits had been revoked by the OJK.
New Resolution Rules
The P2SK Bill addsArticle 22A, which regulates the LPS assessment mechanism for insurance companies that fall into the category in resolution. LPS can decide whether the company will be saved or not.
- If saved, LPS can increase capital until the company meets solvency and liquidity requirements.
- If not saved, LPS takes into account the costs of paying policyholder claims, salary advances and employee severance pay, and receipts from the sale of company assets.
Besides that, Article 24 provides a legal basis for LPS to rescue insurance companies that fall into the category in resolution.
All shareholders, directors, commissioners, and employees (active and former) of insurance companies included in the resolution are required to provide the data and information required by LPS.
With this additional authority, LPS is expected to be able to becomeguardian of financial industry stabilitywhile protecting the public from the risk of default on insurance policies.
Source: https://www.cnbcindonesia.com/market/20251002072715-17-672147/terungkap-tugas-baru-lps-di-ruu-p2sk
Sharia Insurance is Increasingly Promising, Spin-Offs Will Be a Big Trend in 2025!
Business opportunities for sharia insurance are considered increasingly promising as business volume in this sector increases. Sharia insurance practitioners,Erwin Noekman, said this growth was triggered by a reduction in the number of players due to the separationSharia Business Unit (UUS) or spin off, which is mandatory by the end of 2026 at the latest.
“In addition, product trends are moving towardsESG, SDGs, and philanthropy”It is actually in line with the principles of Islamic insurance,” Erwin said toBusiness, Thursday (25/9/2025).
Erwin emphasized that Islamic insurance companies must haveCompetent human resourceswith a grand vision to remain competitive. These human resources are not only willing to work in sharia, but must also be able to encourage companies and industries to move up a level. Furthermore, the implementation ofdigitalizationIt is also important to expand the reach and ease of access for the community.
Besides that, innovative products with the values of transparency, good governance, and the principle of mutual assistance being very important. Erwin also emphasized that companies must independent and professional, not just waiting for government incentives or religious closeness.
UUS Separation Option
Separation of UUS or spin off can be done in two ways:
- Establishing a new Islamic insurance company– Although challenging because it requires capital, human resources, systems, and infrastructure, this option gives the company the opportunity to continue developing its sharia line, while the parent company focuses on conventional business.
- Transferring portfolio to existing sharia companies– This option is more complicated, because the company must find the right party with similar product licenses and actuarial calculations.
For the record, according toDeputy Chairman of the OJK Board of Commissioners, Mirza Adityaswara, until December 2023,41 insurance and reinsurance companies has submitted a plan to separate UUS, with 29 of them choosingspin offBy 2025, it is planned that 18 UUS will spin off and 8 UUS will transfer their portfolios.
Latest,PT MSIG Life Insurance Indonesia Tbk. (LIFE)officially separated its sharia business unit through an EGMS, and will establishPT MSIG Syariah Life Insurance Indonesia as a new company.
State-Owned Insurance Companies Reduced from 15 to 3, Here’s Why and the Plan!
The Daya Anagata Nusantara Investment Management Agency (BPI Danantara) plans to undertake a major consolidation in the state-owned insurance sector. Of the current 15 state-owned insurance companies, only three will be retained.
Danantara Managing Director and Chief Economist, Reza Yamora Siregar, stated that this step is necessary because the majority of state-owned insurance companies are currently deemed to be underperforming. “We currently have 15 state-owned insurance companies, but most of them are not performing well. So, of those 15, we will likely only retain three,” he said at the event.Insurance Industry Dialogue in Jakarta, Tuesday (30/9).
According to Reza, this consolidation process is targeted to take place in the next few years, although there is no certainty as to when exactly it will take place.
Previously, Danantara’s Chief Operating Officer (COO), Dony Oskaria, confirmed that his company had conducted a fundamental business study of state-owned insurance companies. The study found that many state-owned insurance companies still operate on a small scale and are not competitive enough compared to private players.
Therefore, the number of state-owned insurance companies will be reduced and focused on only three categories:
- Life Insurance
- General Insurance
- Credit Insurance
With this step, Danantara hopes that the national insurance industry can be healthier, more competitive, and able to compete at the global level.
OJK Reminds! Reinsurance Is Not a Place to Dump Bad Risks; This Is Its True Function
The Financial Services Authority (OJK) has reminded insurance companies not to use reinsurance as a means to dispose of detrimental risks.
The Deputy Commissioner for Supervision of Insurance, Guarantees, and Pension Funds at the Financial Services Authority (OJK), Iwan Pasila, emphasized that reinsurance should be used to increase business capacity, not simply to channel negative risks and retain profitable ones.
“Why is risk shared with reinsurance? To increase the company’s capacity. This doesn’t mean dumping the bad ones into reinsurance, while retaining the good ones,” Iwan explained at the event.Indonesian Dialogue Rein Jakarta, Tuesday (30/9/2025).
Similarly, Delil Khairat, Director of Engineering and Operations at PT Reasuransi Indonesia Utama (Persero), added that reinsurance is a strategic tool in capital management. Through this mechanism, insurance companies essentially borrow capital from reinsurance companies to cover greater risks.
“The greater the risk retained, the greater the capital requirement. Because company capital is limited, some of the risk is transferred to reinsurance. This means the company essentially borrows reinsurance capital to cover the greater risk,” explained Delil.
This is increasingly important amidst capital pressures in the insurance industry, especially since the enactment of POJK No. 23 of 2023. This regulation tightens capital requirements for insurance companies, including:
- The minimum paid-up capital for new companies is IDR 1 trillion for insurance and IDR 2 trillion for reinsurance.
- Minimum equity adjustment for existing companies: IDR 250 billion for insurance and IDR 500 billion for reinsurance.
The main objective of this regulation is to strengthen the resilience and health of the insurance industry in Indonesia.
Thousands of Victims of the Free Meal Program Will Be Covered by Insurance, Here’s How It Works!
The National Nutrition Agency (BGN) has confirmed that victims of food poisoning from the Free Nutritious Meals (MBG) program will receive financial coverage, including through insurance if the outbreak is declared an Extraordinary Event (KLB). As of September 30, 2025, more than 6,457 people have been affected by MBG poisoning cases in various regions.
The Head of the National Disaster Management Agency (BGN), Dadan Hindayana, explained that there are two financing schemes for handling outbreaks. First, district/city governments that declare outbreaks can submit claims to insurance companies. “When a city/district government declares an outbreak, the funding can be claimed from the insurance company,” Dadan explained in a press conference at the Ministry of Health on Thursday (October 2, 2025).
Meanwhile, for regions that have not declared an outbreak, all handling costs are being covered directly by the National Nutrition Agency (BGN). “For regions that have not declared an outbreak, all costs so far have been covered by the National Nutrition Agency,” he added.
On the same occasion, Health Minister Budi Gunadi Sadikin emphasized that the government will continue to provide coverage to victims of MBG poisoning through the National National Health Insurance (BGN). If the outbreak escalates to a national level, the funding mechanism will follow the rules stipulated in the law and Presidential Regulation.
From the insurance industry perspective, the Financial Services Authority (OJK) revealed that the MBG program is still under discussion. Iwan Pasila, Deputy Commissioner for Insurance, Guarantee, and Pension Fund Supervision at the OJK, stated that the MBG insurance scheme is only in the initial proposal stage.
“Yes, it’s still an initial proposal. The government is still discussing what will be covered, because it’s very important,” Iwan said after the forum.Insurance Industry Dialogueheld by Indonesia Re on Tuesday (September 30, 2025). He emphasized that MBG insurance products should not simply attract premiums but also provide real added value to the community protection ecosystem.
Indonesian Insurance Companies’ Capital Lags Far Behind Neighboring Countries, OJK Prepares New Regulations!
Chief Economist Danantara, Reza Yamora Siregar, assesses that the minimum capital requirements for insurance companies in Indonesia are still relatively low compared to other countries in the ASEAN region.
“Even in the region, our capital requirements are still relatively low compared to neighboring countries,” Reza said at the event.Insurance Industry Dialogue in Jakarta, Tuesday (30/9/2025).
He explained that the minimum capital requirements for insurance companies in Indonesia are belowRp150 billion (around USD 9 billion)This figure is smaller than Malaysia’s USD 10–20 billion, Thailand’s USD 8–13 billion, Vietnam’s USD 12 billion, Myanmar’s USD 2.9–19 billion, the Philippines’ USD 22 billion, and Singapore’s USD 7.4 billion.
New Minimum Capital Rules
The minimum capital requirements for insurance companies are regulated inPOJK Number 23 of 2023concerning Insurance and Reinsurance Business and Institutional Licensing. This regulation will be implemented in stages:
- Phase I (until December 31, 2026)
- Conventional insurance is required to have minimum equity of IDR 250 billion.
- Sharia insurance is required to have minimum equity of IDR 100 billion.
- Phase II (until December 31, 2028)
- KPPE 1 (smaller equity): IDR 500 billion for insurance, IDR 200 billion for sharia insurance.
- KPPE 2 (greater equity): IDR 1 trillion for insurance, IDR 500 billion for sharia insurance.
Reza emphasized that the need for higher capital is urgent so that the national insurance industry can compete globally, especially in underwriting.export insurance and shipping costs”Shipping costs are skyrocketing, and one of the biggest components is shipping insurance,” he said.
Industry Still Lagging Behind
In line with Reza, Director of Engineering and Operations of PT Reasuransi Indonesia Utama (Indonesia Re),Delil Khairat, acknowledged that Indonesia’s insurance industry capital is still far behind that of other countries.
According to him, the implementation of POJK 23 will provide momentum to strengthen the national industry. “If we can level up in accordance with POJK 23, by 2026–2028, we could be on par with, or even slightly above, neighboring countries,” he said.
Currently, there are only three reinsurance companies which have met the minimum equity of IDR 1 trillion for 2026. However, onlyone companywhich is able to meet the minimum equity target for the 2028 stage.
These various dynamics demonstrate that the Indonesian insurance sector is at a crucial stage in its journey toward fundamental strengthening and expanding public protection. From product innovations such as disaster insurance and social programs, to regulatory reform and institutional consolidation, all demonstrate the industry’s commitment to becoming more resilient and inclusive. Moving forward, synergy between the government, the Financial Services Authority (OJK), insurance companies, and the public is expected to create a more robust and sustainable protection ecosystem for all levels of society.
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