Problems have not disappeared from the national insurance industry. Several companies experienced negative net worth because their liabilities were greater than their assets. For the first time, the general insurance industry suffered losses. A loss of 8.9 trillion IDR due to the collapse of Asuransi Bangun Askrida’s financial performance. Reinsurance also suffered losses due to the loss of Nasional Reasuransi. AJB Bumiputera is still struggling to pay claim debts. What are the reports of insurance companies according to Infobank’s Rating 117 Insurance 2025?
PROBLEMS have not completely disappeared from the Indonesian insurance industry. Restructuring efforts are also being carried out by the Financial Services Authority (OJK) together with shareholders to improve the insurance business sector which five years ago was marked by cases of default, especially the life insurance industry. For example: Asuransi Jiwa Bersama (AJB) Bumiputera which still has a claim debt of 5.86 trillion IDR in 2024 and the claim has only been paid 542.2 billion IDR in May 2025. Meanwhile, AJB Bumiputera’s company assets continue to shrink to 9.85 trillion IDR in 2024 with a loss of 484.92 billion IDR.
The general insurance industry also has a latent problem. OJK noted that the general insurance industry in 2024 lost up to 8.9 trillion IDR. A loss that has never been experienced by general insurance as an industry before. After being investigated, it turned out that a number of general insurance companies whose performance was completely burned down, dragging the general insurance industry to really lose money.
According to data from Infobank Research Bureau in a study of Rating 117 Insurance 2025, as many as 59 general insurance companies managed to make a profit with an accumulation of 8.19 trillion IDR in 2024. Meanwhile, 7 general insurance companies that were known to have suffered losses, if the total loss was added up, only 238.98 billion IDR. This means that there are huge losses suffered by 5 general insurance companies that did not issue financial reports.
The five general insurance companies are Asuransi Bangun Askrida, Citra International Underwriters, Asuransi Perisai Listrik Nasional, and Asuransi Umum Videi, as well as Berdikari Insurance, whose license was revoked in January 2025. There are losses of up to 7 trillion IDR from these general insurance companies, which reportedly were contributed the most by Asuransi Bangun Askrida, an insurance company whose shares are owned by 27 regional governments and 23 regional-owned business entities.
The condition of general insurance in 2024 is similar to what happened to the life insurance industry in 2019. Although 35 players recorded a profit of 12.06 trillion IDR, the life insurance industry at that time lost 6.59 trillion IDR. The losses were contributed by five life insurance companies, most of which came from Jiwasraya, whose profit was minus up to 16 trillion IDR and Bumiputera, whose profit was down by 2.5 trillion IDR.
According to several Infobank sources in the insurance sector, Asuransi Bangun Askrida is currently experiencing a difficult condition. In fact, reportedly there is a gap between assets and liabilities of up to 26 trillion IDR. “It is very possible that the company posted a profit so that it could pay dividends to shareholders and reduce reserves,” said Firdaus Djaelani, Honorary Board of the Indonesian General Insurance Association (AAUI) when asked for his opinion by Infobank at the end of June.
When asked for information, OJK confirmed that Asuransi Bangun Askida was under special handling but was reluctant to mention the number. “It is under handling, because last year they made adjustments to the premium reserves. Therefore, the main reason is to strengthen the premium reserves. But for the number, it is better to wait for the audited report,” said Iwan Pasila, Deputy Commissioner for Supervision of Insurance, Guarantees, and Pension Funds at OJK to Infobank last month.
The reinsurance industry is also on fire due to the collapse of one company. According to the Infobank Research Bureau, seven reinsurance companies managed to make a total profit of 582.92 billion IDR. However, the loss suffered by National Indonesian Reinsurance (Nasional Re) amounted to 1.42 trillion IDR, the reinsurance industry’s profit became minus 548.58 billion IDR in 2024.
In fact, the previous year, Nasional Re managed to make a profit of 1.13 trillion IDR. With a solvency of minus 2.84 trillion IDR, Nasional Re has become a problematic company that must be immediately restored to health. In addition to losses, its liabilities reached 12.37 trillion IDR, greater than its assets of 9.36 trillion IDR, or experienced a negative net worth of 3.01 trillion IDR.
When contacted by Infobank, Toto Pranoto, National President Commissioner of Reasuransi Nasional Indonesia, admitted that the financial performance of this state-owned reinsurance company was hit by a double blow. “One, the high credit insurance claims. Two, the policy related to reserves that are increasingly conservative in accordance with IFRS 17 so that this suppresses the cost structure of reinsurance companies,” he told Infobank at the end of June.
OJK has requested health measures from the reinsurance company under the auspices of the Indonesia Financial Group (IFG) through Asuransi Kredit Indonesia (Askrindo). “We are in the process of restructuring, according to the health plan requested by OJK. There are several options, including additional capital. We are working on this, including with IFG as the ultimate shareholders,” added Toto Pranoto.
However, requesting capital injection from the state is not easy in the midst of the government carrying out budget efficiency. The Investment Management Agency (BPI) Danantara Indonesia, which now holds full control of state-owned enterprises (BUMN), also stated that there will no longer be a direct State Capital Participation (PMN) scheme from the government and will encourage consolidation among companies that have similar lines of business. One of them is by cutting state-owned insurance companies into four companies, namely life insurance, general insurance, credit insurance or guarantees, and reinsurance.
According to data from Infobank Research Bureau, of the nine reinsurance companies, four of them are government-owned, namely Nasional Re, Reasuransi Indonesia Utama, Tugu Reasuransi Indonesia, and Reasuransi Indonesia Syariah. Regarding the direction of consolidation to improve Nasional Re, there has been no official direction from Danantara. “We don’t know yet, but there is indeed an intention in that direction because in terms of the ecosystem, Indonesia Re is indeed prepared to become a reinsurance holding. And if that is implemented, of course Nasional Re must strengthen its performance first, so that when it is merged it does not burden the others,” said Benny Wowaruntu, President Director of Reasuransi Indonesia Utama to Infobank at the end of June.
Reinsurance performance enhancement and capacity enhancement are essential to reduce the flight of premium payments to overseas reinsurance. “Why did reinsurance capital flight increase? It is because of its low capacity, and also because of the low trust of the insurance industry in local reinsurance, due to cash flow difficulties, especially state-owned reinsurance. The problem of claim payments from domestic reinsurance is long, it can be more than 120 days,” said a director at a general insurance company to Infobank.
The question is, why can a state-owned company whose directors are strictly regulated and are not even allowed to play golf on weekdays have problems from the previous year’s outstanding performance?
Danantara, which took over the management of state-owned enterprises from the Ministry of Stateowned Enterprises, intends to address the causes, namely the neglect of good governance principles and the existence of a mode of engineering financial reports. “They manipulate reports by exaggerating profits and delaying the recognition of operational costs. I don’t like exaggerated profits and delayed costs just for the sake of a good bottom line and bonuses,” said Dony Oskaria, Chief Operation Officer of Danantara, at the Executive Breakfast Meeting of IKA Fikom Universitas Padjajaran in Jakarta, in May.
According to Dony, the failure experienced by stateowned companies was also caused by the absence of a long-term vision and weak operational supervision. Therefore, Danantara will cut the number of stateowned companies and their subsidiaries which reached 888 companies, including in the insurance sector. “So that there will be business consolidation from the previous 888 companies, we hope that it will be under 200 companies that are indeed solid and strong,” he said.
However, an Infobank source said that the source of the problems that occurred in state-owned companies was not solely on the board of directors (BOD) or management. “Because the board of commissioners and shareholders also want large bonuses and dividends, not to mention that their business practices are full of intervention from shareholders,” said an Infobank source. The poor performances of Asuransi Bangun Askrida and Nasional Re are also inseparable from the intervention that made state-owned insurance companies unable to avoid becoming a dumping ground for state-owned banks’ bad debts. Including shareholders who have so far prioritized dividend payments without thinking about the company’s financial sustainability.
The disclosure of governance issues and financial engineering methods in several insurance companies is a slap in the face to the supervisory function of the owners, board of commissioners, risk management units, independent auditors, and OJK. OJK is actively cleaning up to remove the red marks in the insurance and pension fund sectors. Meanwhile, shareholders and managers, especially in insurance companies with limited capital, must struggle to meet the minimum capital requirements required by OJK.
Based on OJK Regulation Number 23 of 2023 concerning Business Licensing and Institutions of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies, the minimum capital that must be owned by insurance companies is 250 billion IDR in 2026. Then in 2028, the capital must be increased by being divided into two, namely for the Equity-Based Insurance Company Group (KPPE) 1 with a minimum capital of 500 billion IDR and KPPE 2 with a minimum capital of 1 trillion IDR. It is recorded that there are still 15 life players and 22 general players whose capital is below 250 billion IDR.
Amid macroeconomic pressures and uncertainty, insurance companies with limited capital are hoping for relaxation regarding capital. “The economic conditions are tough and demand is very weak, return on investment (ROI) and return on equity (ROE) are below 3%, the existing capital is actually idle, so why should capital be increased, the regulator should also consider the interests of investors, and fairly supervise companies that violate business practices without having to level the playing field with capital, so we hope the regulator can give an extension,” said Budi Herawan, AAUI General Chairman to Infobank last month.
A source in a general insurance company said that OJK should focus more on tightening supervision of insurance companies that compete unfairly and ignore risks. “There is an insurance company that pays dividends of 800 billion IDR, even though its profit is only 100 billion IDR, in the end the company has problems. That should not have happened, if OJK focused on strengthening its regulatory and supervisory functions, instead of chasing healthy insurance companies whose capital is idle because their premium production is sluggish due to the weak economy,” he told Infobank via telephone in June.
OJK admits that the Indonesian insurance industry still needs improvement. On the other hand, although its growth is restrained by economic conditions, its penetration rate is still low with a new insurance premium ratio of 5% of gross domestic product (GDP). In order to be able to take advantage of the large growth space, the management and capacity and management of the insurance industry must continue to be improved.
“The insurance industry still needs a lot of improvements. We don’t want its capacity and capability not to develop, in terms of capital, competence and ability in certain fields, if there is no improvement, then Indonesia’s potential will not develop,” said Ogi Prastomiyono, Chief Executive of Insurance, Guarantee, and Pension Fund Supervision of OJK in response to Infobank’s questions last month.
The directors of insurance companies themselves must struggle to face a difficult period this year until 2026. In addition to having to improve their ability to implement PSAK 117 standards, they must face a market that is under pressure and full of uncertainty. The life insurance industry is facing weakening middle-class purchasing power, declining public interest in unit links, and uncertainty in the capital market which is the mainstay of life insurance investment management.
After the tightening of investment-based investment products, the performance of some life insurance companies has also faltered. Last year, unit link premiums fell 11.5% to 70.3 trillion IDR while traditional ones grew 18.7% to 110.36 trillion IDR. Amidst the changes in premium composition, there are 15 life insurance companies that lost a total of 2.14 trillion IDR, not including Reliance Indonesia Life Insurance and Bhinneka Life whose financial performance is unknown. Fortunately, there are 31 other life insurance companies that posted finances of 11.50 trillion IDR. So that the life insurance industry will achieve a profit of 8.86 trillion IDR in 2024, or grow 32.61% from the previous year. After achieving premium growth of only 1.46% and investment declining by 0.83% as of March 2025, the life insurance industry will go through an uphill road until the end of 2025.
Likewise, general insurance is facing a sluggish real sector that is increasingly under pressure due to government budget efficiency and global political tensions due to Iran-Israel war which will disrupt trade routes, supply chains, and rising world crude prices. As of March 2025, the general insurance industry’s gross premiums decreased by 0.04%. Amidst capital demands, the insurance industry’s own capital actually decreased from 90.18 trillion IDR as of March 2024 to 76.67 trillion IDR as of March 2025.
The sectors supporting general insurance premiums such as property, vehicles, and credit are still weak. Likewise, the health insurance product line whose growth could slow down due to OJK Circular Letter No. 7/SEOJK.05/2025, the policy that will be effective from early 2026 will implement a risk-sharing scheme (copayment) for policyholders and require companies selling health insurance products to have capacity in the medical field, both in terms of human resources, technology, and the existence of a medical advisory board. Due to the high number of health insurance claims accompanied by high medical inflation in recent years, five general and life insurance companies have withdrawn from the health insurance business line. The number of health insurance players has decreased from 82 companies in 2022 to 77 companies currently.
The general insurance industry also has a latent problem. OJK noted that the general insurance industry in 2024 lost up to 8.9 trillion IDR. A loss that has never been experienced by general insurance as an industry before. After being investigated, it turned out that a number of general insurance companies whose performance was completely burned down, dragging the general insurance industry to really lose money.
