Indonesian Credit Insurance Faces Challenges as Claims Ratio Hits 85.56%

High Claims Ratio Raises Concerns

The Indonesian Financial Services Authority (OJK) reported that the credit insurance claims ratio in the general insurance and reinsurance industry reached 85.56% as of October 2025 ¹

. This high ratio has raised concerns among industry stakeholders about the sustainability of credit insurance products.

Causes of High Claims Ratio

Industry experts attribute the high claims ratio to several factors, including economic slowdown, poor credit quality, especially in the fintech lending sector, and inadequate underwriting and monitoring practices ²

. Budi Herawan, Chairman of the Indonesian General Insurance Association (AAUI), noted that the increase in default risk in certain sectors and the delayed adjustment of pricing to macroeconomic changes have contributed to the high claims ratio ¹

Source 1

https://finansial.bisnis.com/read/20260101/215/1940964/aaui-ungkap-penyebab-rasio-klaim-asuransi-kredit-capai-8556

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Recommendations to Address the Issue

To mitigate the high claims ratio, experts recommend that insurance companies tighten underwriting standards based on sector and debtor quality, enhance early warning systems, and adjust premium pricing and risk structures ²

. Wahyudin Rahman, an insurance expert, suggested that insurers should adopt a risk partnership approach with banks and fintech companies rather than just risk transfer ²

Source 2

https://finansial.bisnis.com/read/20260101/215/1940955/sederet-rekomendasi-untuk-tekan-klaim-asuransi-kredit-yang-capai-8556

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Industry Outlook

Despite the challenges, industry experts believe that the credit insurance business still has potential in the next 1-3 years, driven by the need for credit risk protection in the financial and MSME sectors ¹

. However, they emphasize that improving underwriting quality, adjusting product structures, and strengthening risk management and actuarial practices are crucial to maintaining a healthy claims ratio.

Regulatory Response

OJK has taken steps to address the issue by introducing stricter regulations through POJK Number 20 of 2023, aiming to ensure that insurance companies have adequate financial resilience and risk management practices ¹

.