Indonesia's Insurance Industry Outlook for 2026: Challenges and Prospects

Economic Context and Industry Performance

The Indonesian insurance industry is bracing for a challenging 2026 as economic growth is projected to remain stagnant at around 5%, according to World Bank projections ³

. This economic environment is expected to impact the industry's growth prospects significantly. The Financial Services Authority (OJK) has observed that the reinsurance sector still has room to strengthen its capital base organically, with total equity standing at Rp 6.84 trillion as of October 2025 ¹

Source 1

https://keuangan.kontan.co.id/news/ojk-sebut-industri-reasuransi-masih-berpeluang-perkuat-ekuitas-secara-organik

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Challenges Facing the Industry

1. Premium Income Contraction: The reinsurance industry recorded a 1.03% year-on-year contraction in premium income, amounting to Rp 22.74 trillion as of October 2025 ¹
   Source 1

   https://keuangan.kontan.co.id/news/ojk-sebut-industri-reasuransi-masih-berpeluang-perkuat-ekuitas-secara-organik
   .
2. Economic Slowdown: The projected economic growth of around 5% in 2026 is expected to limit the expansion of the general insurance industry ³
   Source 3

   https://keuangan.kontan.co.id/news/tantangan-industri-asuransi-umum-pada-2026-ekonomi-melambat-klaim-kredit-tinggi
   .
3. Changing Consumer Behavior: Consumers are becoming more cautious in their financial decisions, affecting insurance purchases ²
   Source 2

   https://keuangan.kontan.co.id/news/dinamika-industri-asuransi-2025-lebih-dari-sekadar-daya-beli
   .
4. Global Risks: External factors such as China's economic slowdown and the impact of US reciprocal tariffs pose additional risks to Indonesia's economic performance, potentially affecting the insurance industry ⁴
   Source 4

   https://aktual.kontan.co.id/news/ekonomi-indonesia-2026-diproyeksi-kalah-dari-target-pemerintah-ini-penjelasannya
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Sector-specific Observations

The OJK notes that the dynamics of the insurance industry are not solely influenced by declining consumer purchasing power but also by changing consumer behavior and insurance companies' strategic adjustments ²

. The general insurance sector is particularly vulnerable due to high credit claims and economic slowdown ³

Source 3

https://keuangan.kontan.co.id/news/tantangan-industri-asuransi-umum-pada-2026-ekonomi-melambat-klaim-kredit-tinggi

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