Strengthening Indonesia’s Insurance Industry
The Financial Services Authority (OJK) has introduced four strategic policy directions aimed at fortifying Indonesia’s national insurance industry. These measures emphasize financial stability, operational efficiency, and enhanced consumer protection.
Ogi Prastomiyono, Chief Executive of Insurance, Guarantee, and Pension Fund Supervision at OJK, revealed these strategies during the Indonesia Insurance Summit 2025 in Bali. The initiatives are designed to create a robust insurance system capable of withstanding economic shocks while maintaining public trust.
Reinforcing Capital Requirements
The first strategy focuses on strengthening capital requirements and expanding the insurance market. OJK is mandating insurance companies to increase their paid-up capital as a prerequisite for obtaining new business licenses. Existing firms will be subject to a minimum equity threshold to ensure long-term sustainability. “We’ve categorized insurance companies by equity size to better assess and strengthen their ability to absorb risks,” Ogi explained.
OJK has already issued regulations requiring minimum equity increases for insurance and reinsurance firms. By 2028, a dual classification system (KPP 1 and KPP 2) will be implemented based on equity levels. KPP 1 companies, with larger capital, will have broader business opportunities, while KPP 2 companies will operate within more limited scopes.
According to OJK Regulation No. 23/2023, insurance companies must meet a minimum equity requirement of Rp250 billion (US$15 million) by 2026, with further incremental increases through 2028. Companies are also required to spin off their sharia business units by 2026 to ensure clear and focused operations.
Enhancing Corporate Governance
The second policy direction focuses on improving corporate governance and risk management within the industry. This includes strengthening organizational structures, upgrading human resource competencies, and enhancing key business functions such as underwriting, investment, and claims processing. “OJK is improving HR policies across all levels to ensure sound, transparent, and accountable business practices,” Ogi stated.
Developing a Comprehensive Insurance Ecosystem
The third strategy aims to develop a comprehensive insurance ecosystem, incorporating insurers, professional associations, and support services under a unified regulatory framework. OJK will apply holistic oversight across all sector players to ensure coordinated and integrated supervision.
Expanding Insurance Products
The final strategic pillar focuses on expanding the range of insurance products available in the market, including unit-linked insurance (PAYDI), credit insurance, and health insurance. This strategy will be guided by the National Insurance Industry Roadmap for 2023–2027, which outlines long-term development goals and innovation priorities for the sector.
With these strategies, OJK aims to make Indonesia’s insurance sector more resilient, inclusive, and adaptive to the evolving needs of the population, laying the groundwork for a more sustainable financial services industry.
