Indonesia's Health Insurance Sector Faces Rising Claims Amid Increasing Medical Costs

Surge in Health Insurance Claims

The Financial Services Authority (OJK) has revealed that Indonesia's health insurance claim ratio has surged to alarming levels, reaching 83.59% in general insurance and 69.86% in life insurance as of October 2025. This significant increase is primarily attributed to rising medical inflation and higher service utilization in both industry segments.

Financial Performance Amid Challenges

Despite the pressure from high claims ratios, the health insurance segment has shown resilience through premium growth. Premium income from health insurance lines grew by 17.53% year-on-year (YoY) to Rp28.63 trillion in the life insurance industry, representing 19.23% of total life insurance premiums. Similarly, the general insurance and reinsurance sectors saw a 17.24% YoY increase in health insurance premium income, amounting to Rp9.10 trillion.

Industry Response and Regulatory Measures

Ogi Prastomiyono, OJK's Executive Head of Insurance, Pension Fund, and Guarantee Supervision, highlighted that while premium repricing helps insurers maintain product sustainability, new regulations will mandate that repricing can only occur during policy renewal. This regulatory measure aims to balance industry viability with consumer protection.

Market Dynamics and Industry Participation

As of October 2025, 77 out of 144 insurance companies continued to offer health insurance products, a slight decrease from 78 companies in December 2024. This indicates that despite the challenges posed by high healthcare costs, insurance companies remain committed to the health insurance segment, driven by growing health risk awareness and clearer regulatory guidelines.