Reinsurance Sector Shows Strong Growth Prospects for 2026

Positive Outlook from Indonesia Re

PT Reasuransi Indonesia Utama (Indonesia Re) is projecting a positive outlook for the reinsurance business in 2026, driven by several key growth drivers. The company expects health insurance, credit life insurance, and individual and group mortality insurance to be the main contributors to reinsurance growth ¹

Industry Growth Drivers

1. Infrastructure Projects: Continued national infrastructure projects will drive demand for engineering insurance and construction insurance
2. Risk Awareness: Increasing public awareness about the importance of insurance
3. New Risk Segments: Emerging risks such as cyber insurance and climate-related risks
4. Economic Recovery: Fundamental economic improvement supporting insurance penetration

Challenges and Risk Management

While the outlook is positive, Indonesia Re is also monitoring several challenges including increasing claims due to natural disasters, soft market conditions, and intense industry competition. To maintain profitability, the company is implementing risk selection, premium rate adjustments, portfolio diversification, and digitalization of operational processes ¹

Regulatory Perspective

The Financial Services Authority (OJK) views the reinsurance industry's growth potential positively, particularly through organic growth by strengthening retention capacity, improving underwriting quality, and enhancing risk management. OJK is optimistic that the industry can achieve the first stage of equity strengthening by 2026 through these measures ²

UMKM Guarantee Insurance Expansion

The OJK has set an ambitious target for the guarantee insurance industry to reach 90% of UMKM portfolio coverage by 2028, with current coverage already at 70.55% as of October 2025. This growth is supported by a consistent 5% annual growth rate in UMKM guarantee coverage ³

Future Outlook

The reinsurance industry is well-positioned for growth as Indonesia Re and other industry players capitalize on emerging opportunities while managing evolving risks. The industry's focus on prudent underwriting, accurate actuarial pricing, and strengthened risk valuation will be crucial in maintaining competitiveness and supporting sustainable growth.