Indonesia’s Insurance Industry Enters a New Chapter

Indonesia has a vast consumer market, but why does its insurance penetration still trail several ASEAN peers? That gap is precisely what makes the industry worth discussing. The Indonesia Financial Authority Services (OJK)’s insurance roadmap shows Indonesia’s penetration rate, on an ASEAN comparison basis excluding mandatory and social insurance, at only 1.4% in 2021 versus 3.8% in Malaysia, 4.6% in Thailand, and 12.5% in Singapore. If incomes, asset ownership, and protection awareness continue to rise, the runway for long-term growth remains considerable. [1]

Source: ojk.go.id (2023)

That runway is gradually appearing in the numbers. As of June 2026, total insurance industry assets reached Rp1,184.72 trillion, up 1.86% YoY, while cumulative commercial premiums for January to June reached Rp170.98 trillion, up 2.84% YoY. Growth, however, was uneven. Life insurance premiums increased 8.40% to Rp94.83 trillion, while general insurance and reinsurance premiums declined 3.33% to Rp76.15 trillion [2].

Insurance growth and GDP reinforce each other. Rising income and asset ownership lift protection demand, while insurers absorb shocks and channel premiums into investments. World Bank research finds that these risk-transfer and intermediation functions can support growth [3]. Statistics Indonesia (BPS) places the combined value added of insurance and pension funds at about Rp184.75 trillion in 2025, equivalent to roughly 0.78% of Indonesia’s Rp23,821.1 trillion GDP [4].

That direct contribution differs from premium penetration and the asset ratio. Under the Golden Indonesia 2045 agenda, the National Long-Term Development Plan (RPJPN) targets insurance assets rising from 9.1% of GDP at the 2025 baseline to 20% by 2045 [5]. This requires assets to outgrow the economy while remaining sound. Employment should expand as well. Although no public figure covers every employee, agent, broker, and supporting profession, AAJI recorded 267,117 life-insurance marketers in Q1 2025 [6]. Growth can create formal roles in actuarial work, underwriting, claims, healthcare, data, cybersecurity, and customer service.

Source: peraturan.bpk.go.id (2024)

This leads to a more important question than how quickly premiums are growing: how good is that growth? Insurers still need to price risk correctly, control claims and costs, and manage investments. Claim ratios, underwriting results, combined ratios for general insurers, and Risk-Based Capital (RBC) therefore matter alongside top-line growth. In June 2026, industry RBC reached 461.94% for life insurance and 318.52% for general insurance and reinsurance, both well above the 120% regulatory minimum [2].

Look deeper, and the pattern of demand is also shifting. The number of insured lives rose 8.6% to 168.03 million in 2025. Although total premium income declined 1.8%, regular-payment new business premiums grew about 7.8% [7]. In general insurance, industry premiums reached Rp112.81 trillion, up 4.8%, with property as the largest line, followed by credit, motor vehicle, and health insurance [8]. Protection demand has not disappeared, but the products, payment patterns, and sources of growth are becoming more diverse.

Health insurance makes this trade-off especially visible. Life insurers paid Rp26.74 trillion in health claims in 2025, up 9.1% YoY [7]. POJK 36/2025 strengthened requirements for medical and digital capabilities, utilization reviews, and coordination among healthcare coverage providers. For products with risk-sharing features, co-payment is set at 5% of claims, capped at Rp300,000 for outpatient claims and Rp3 million for inpatient claims, while insurers must also offer products without risk-sharing features [9]. In other words, growth in health insurance comes with a greater need for disciplined underwriting and claims management.

The next pressure point is capital. POJK 23/2023 requires existing insurers to hold at least Rp250 billion of equity by the end of 2026 and reinsurers Rp500 billion. The thresholds rise again in 2028 under the KPPE framework, including Rp500 billion for KPPE 1 insurers and Rp1 trillion for KPPE 2 insurers [10]. As of May 2026, 118 of 145 insurers and reinsurers had met the first-stage minimum equity requirement [11]. Companies still below the threshold may need capital injections, strategic investors, or consolidation. The industry’s next phase may therefore depend not only on who can sell more policies, but also on who has the balance sheet to remain competitive.

Premium growth and minimum equity compliance in Indonesia’s insurance industry, 2026. Source: ojk.go.id (2026)

At the same time, the way investors read insurer performance is changing. PSAK 117 on Insurance Contracts became effective on 1 January 2025 and adopts IFRS 1 [12]. The standard changes the recognition and presentation of insurance contracts, making historical comparisons more demanding. PT Asuransi Tugu Pratama Indonesia Tbk. (TUGU), for example, restated its 2024 financial statements in connection with the implementation of PSAK 117 in 2025 [13].

Which Insurance Players Are Worth Watching?

Image Source: Magnific/rawpixel

In life insurance, two large players illustrate the scale required to compete. Prudential Indonesia reported Rp21.1 trillion of premium income, Rp64.3 trillion of assets, and Rp2.4 trillion of net profit in 2025 [14]. Allianz Life Indonesia reported Rp39.73 trillion of assets, Rp510.22 billion of profit after tax, and an RBC ratio of 260%, with agency and bancassurance contributing about 51% and 46% of gross written premium [15]. Neither Indonesian entity is listed on the IDX, but their scale, distribution, and brand strength remain important industry benchmarks.

In general insurance, Asuransi Astra reported Rp8.88 trillion of insurance revenue in 2025, up 10%, alongside Rp1.62 trillion of net profit and an RBC ratio of 348%. Asuransi Astra is not itself IDX-listed, but it is part of the group of PT Astra International Tbk. (ASII) [16]. For investors seeking direct exposure to a listed insurer, PT Asuransi Tugu Pratama Indonesia Tbk. (TUGU) is one relevant name, with exposure to large corporate risks across property, energy, marine, and aviation [13].

So, what should we take away from all of this? Indonesia’s low insurance penetration leaves considerable room for growth, but the likely winners are not necessarily those chasing premiums most aggressively. Strong capital, broad distribution, disciplined pricing and underwriting, effective claims management, and technology readiness will increasingly separate the leaders from the rest. With the 2026 capital deadline and another step-up in 2028, the next few years could become a period of selection and consolidation.

References

[1] Otoritas Jasa Keuangan, Peta Jalan Pengembangan dan Penguatan Perasuransian Indonesia 2023-2027. URL: https://www.ojk.go.id/id/berita-dan-kegiatan/info-terkini/Documents/Pages/Peta-Jalan-Pengembangan-dan-Penguatan-Perasuransian-Indonesia-2023-2027/Peta%20Jalan%20Pengembangan%20dan%20Penguatan%20Perasuransian%20Indonesia%202023-2027.pdf

[2] Otoritas Jasa Keuangan, RDKB Juli 2026, data industri asuransi per Juni 2026. URL: https://www.ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Pages/RDKB-Juli-2026.aspx

[3] World Bank, Does Insurance Market Activity Promote Economic Growth? A Cross-Country Study for Industrialized and Developing Countries. URL: https://openknowledge.worldbank.org/entities/publication/05c809c8-0009-51eb-860a-a6135eb4ab43

[4] Badan Pusat Statistik, Produk Domestik Bruto Atas Dasar Harga Berlaku Menurut Lapangan Usaha, 2025. URL: https://www.bps.go.id/id/statistics-table/3/UzFSTVVXUlliME5XYzBZNUwwNVFRa3h6Y1d3M1p6MDkjMw%3D%3D/produk-domestik-bruto-atas-dasar-harga-berlaku-menurut-lapangan-usaha-miliar-rupiah-.html

[5] Badan Pemeriksa Keuangan, Undang-Undang Nomor 59 Tahun 2024 tentang RPJPN 2025–2045. URL: https://peraturan.bpk.go.id/Home/Details/299728/uuno-59-tahun-2024

[6] Kontan, AAJI: Terdapat 267.117 Tenaga Pemasar di Industri Asuransi Jiwa pada Kuartal I-2025. URL: https://keuangan.kontan.co.id/news/aaji-terdapat-267117-tenaga-pemasar-di-industri-asuransi-jiwa-pada-kuartal-i-2025

[7. Asosiasi Asuransi Jiwa Indonesia, Kinerja Industri Asuransi Jiwa FY2025. URL: https://aaji.or.id/file/uploads/content/file/Siaran%20Pers%20Kinerja%20IAJ%20FY%202025.pdf

[8] Asosiasi Asuransi Umum Indonesia, Asuransi Umum dan Reasuransi 2025. URL: https://aaui.or.id/wp-content/uploads/2026/03/Book-rev-2025_WEB.pdf

[9] Otoritas Jasa Keuangan, POJK 33/2025 dan POJK 36/2025, Penguatan Ekosistem Asuransi Kesehatan. URL: https://ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Pages/POJK-33-dan-POJK-36-Tahun-2025.aspx

[10] Otoritas Jasa Keuangan, FAQ POJK 23 Tahun 2023, Perizinan Usaha dan Kelembagaan Perusahaan Asuransi dan Reasuransi. URL: https://www.ojk.go.id/id/regulasi/Documents/Pages/Perizinan-Usaha-dan-Kelembagaan-Perusahaan-Asuransi%2C-Asuransi-Syariah%2C-Reasuransi%2C-dan-Reasuransi-Syariah/FAQ%20POJK%2023%20Tahun%202023%20Perizinan%20Usaha%20Dan%20Kelembagaan%20Perusahaan%20Asuransi%2C%20Asuransi%20Syariah%2C%20Reasuransi%2C%20Dan%20Reasuransi%20Syariah.pdf

[11] Otoritas Jasa Keuangan, RDKB Juni 2026, pemenuhan ekuitas minimum industri asuransi dan reasuransi. URL: https://ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Pages/RDKB-Juni-2026.aspx

[12] Ikatan Akuntan Indonesia, PSAK 117 Meningkatkan Keberlanjutan Industri Asuransi. URL: https://web.iaiglobal.or.id/Berita-IAI/detail/siaran_pers_-_psak_117_meningkatkan_keberlanjutan_industri_asuransi

[13] PT Asuransi Tugu Pratama Indonesia Tbk, Annual Report 2025. URL: https://cms-tpi.tugu.com/files/2020/01/TUGU-AR-2025-260407e-Low-Fin.pdf

[14] Prudential Indonesia, Prudential Indonesia Tumbuh di 2025. URL: https://www.prudential.co.id/id/about-us/berita/siaran-pers/prudential-indonesia-kinerja-2025

[15] Allianz Life Indonesia, Annual and Sustainability Report 2025. URL: https://www.allianz.co.id/content/dam/onemarketing/azli/wwwallianzcoid/tentang-kami/finansial/laporan-tahunan/2025/allianz-life-indonesia-annual-and-sustainability-report-2025.pdf

[16] Asuransi Astra, Laporan Tahunan Performa 2025. URL: https://www.asuransiastra.com/wp-content/uploads/2026/04/PERFORMA-2025-Asuransi-Astra.pdf

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Disclaimer: This content is created for educational purposes or service promotion, and does not constitute a recommendation to buy or sell any specific Securities. Any risks arising from investment decisions made based on the information in this publication are the sole responsibility of the respective audience. The data was sourced from various sources. PT KAF Sekuritas Indonesia is licensed and supervised by the Financial Services Authority (Otoritas Jasa Keuangan / OJK).