Indonesian Insurance Industry Faces Challenges in Meeting Minimum Capital Requirements

Regulatory Background

The Indonesian insurance industry is grappling with new regulations set by the Otoritas Jasa Keuangan (OJK) through Peraturan OJK (POJK) Nomor 23 Tahun 2023, which mandates insurance and reinsurance companies to meet a minimum capital requirement by 2026 ¹

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Source 2

https://finansial.bisnis.com/read/20251121/215/1930546/10-perusahaan-asuransi-belum-penuhi-modal-minimum-aaui-minta-relaksasi-waktu

. The regulation aims to strengthen the capital base of insurance companies, ensuring their financial stability and ability to protect policyholders.

Industry Response

The Indonesian General Insurance Association (AAUI) has formally requested a relaxation or extension of the deadline for complying with the minimum capital requirement. The request, backed by an academic study, was submitted to OJK during the Indonesia Rendezvous 2025 event in Bali on October 17, 2025 ¹

. AAUI Chairman Budi Herawan emphasized that the challenging macroeconomic conditions justify the need for a more flexible implementation timeline.

Current Status

As of the latest industry mapping, it is estimated that between 5 to 10 insurance companies affiliated with AAUI have not yet met the minimum equity requirement set for 2026 ¹

. While AAUI is not opposed to the regulation in principle, they are seeking a more gradual implementation approach. Other industry associations, including the Indonesian Life Insurance Association (AAJI) and the Indonesian Islamic Insurance Association (AASI), are also planning to conduct similar studies and submit their findings to OJK ¹

Source 1

https://keuangan.kontan.co.id/news/aaui-minta-ojk-beri-relaksasi-aturan-ekuitas-minimum-asuransi-2026

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OJK's Stance

OJK has maintained its commitment to enforcing the new capital requirements, emphasizing that the regulation is crucial for ensuring the financial health and competitiveness of the insurance industry. As of October 2025, OJK's Executive Head of Insurance, Pension Funds, and Guarantee, Ogi Prastomiyono, stated that there are no plans to relax or postpone the implementation of the minimum capital requirement ¹

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Path Forward

The industry is now awaiting OJK's formal response to AAUI's request. In the meantime, insurance companies are advised to review their business portfolios and implement necessary efficiencies to meet the upcoming regulatory requirements. The outcome of this regulatory challenge will significantly impact the structure and capital adequacy of Indonesia's insurance sector in the coming years.