OJK Maintains Current Regulatory Approach for Independent Umrah Insurance

Existing Framework Deemed Sufficient

The Financial Services Authority (OJK) has determined that no special regulations are needed for insurance products covering independent Umrah pilgrimages. Ogi Prastomiyono, OJK's Executive Head for Insurance, Pension Funds, and Guarantee, stated that insurance companies can continue to develop and sell Umrah-related insurance products under the existing regulatory framework.

Industry Growth Potential

The recent legalization of independent Umrah pilgrimages through Law No. 14/2025 has created new opportunities for the Sharia insurance industry, particularly in travel insurance and personal protection lines. Ogi emphasized that while the current framework is sufficient, insurance companies must be adaptable and innovative in developing appropriate products, marketing strategies, and improving service quality for independent Umrah pilgrims.

Positive Industry Outlook

The Sharia insurance industry in Indonesia shows promising growth potential, with assets growing by 8.45% year-on-year through 2025. Achmad Kusna Permana, Head of International Relations at AASI, expressed optimism about continued growth opportunities despite current economic pressures. The industry faces challenges such as low financial literacy regarding Sharia insurance and the impact of mandatory spin-offs for Sharia business units.

Challenges and Opportunities

While economic conditions remain challenging, industry players who have committed to or completed spin-offs see significant opportunities. Permana noted that despite macroeconomic pressures, there is still room for annual growth. The industry must navigate regulatory requirements while capitalizing on emerging opportunities in the independent Umrah market.