OJK Raises Concerns Over High Risk in Credit Insurance Sector

High Claim Ratio Highlights Potential Risks

The Financial Services Authority (OJK) has expressed concerns about the elevated risk in the credit insurance business, citing a high claim ratio of 85.56% as of October 2025. The data reveals that the industry collected Rp 19.67 trillion in premiums while paying out Rp 16.83 trillion in claims. This significant disparity underscores the potential risks inherent in the credit insurance segment.

Factors Contributing to High Claims

Ogi Prastomiyono, OJK's Executive Head of Insurance Supervision, identified several key factors contributing to the high claim ratio. These include the quality of the insured credit portfolio, economic conditions, and underwriting practices and pricing strategies employed by some credit insurance products. The regulator's scrutiny suggests a need for closer examination of these factors to mitigate potential risks.

Regulatory Implications

The OJK's concerns indicate potential regulatory actions to address the risks in the credit insurance sector. The regulator may focus on improving underwriting standards and monitoring economic factors that impact claim rates. This oversight is crucial for maintaining stability in the financial services industry and protecting consumers.