Jiwasraya Case Continues to Erode Trust in Indonesian Insurance Sector

Deep Impact on Public Confidence

The Jiwasraya case remains a significant challenge for Indonesia's insurance industry, with expert Andreas Freddy Pieloor highlighting that public trust has hit an all-time low. The restructuring process has resulted in substantial losses for policyholders, while those who pursued legal action and won their cases have seen their victories disregarded by Jiwasraya.

Regulatory Response and Industry Implications

The Financial Services Authority (OJK) has taken significant steps, including the dissolution of Jiwasraya's Pension Fund on August 4, 2025, as part of the ongoing liquidation process. Ogi Prastomiyono, Head of Insurance, Pension Fund Supervision at OJK, emphasized that this decision aligns with Article 183 of Law No. 4/2023 on Financial Sector Development and Strengthening.

Shift in Insurance Product Preferences

The case has particularly affected unit-linked insurance products, with many consumers becoming increasingly wary. Andreas Pieloor noted that numerous insurance companies have shifted their focus to traditional products, effectively abandoning unit-linked offerings as consumers have lost confidence in investment-linked insurance products.

Expert Analysis and Future Concerns

Pieloor emphasized that the fundamental issue lies in the misconception of insurance as an investment vehicle. He stressed that insurance is primarily about risk transfer through premium payments, whereas investment involves taking on risk with the expectation of returns. The current situation has compounded the public's distrust, particularly as other similar cases (such as Wanaartha Life and AJB Bumiputera 1912) have emerged.

Current Status and Way Forward

Jiwasraya is currently undergoing liquidation, with the OJK overseeing the process. The industry is grappling with the fallout, working to restore trust through more transparent practices and a renewed focus on traditional insurance products.