OJK Reports High Claims Ratio for Credit Insurance

Signals Potential Risk Pressure on Insurance Sector

The Financial Services Authority (OJK) has released data showing a claims ratio of 85.56% for credit insurance in the general insurance and reinsurance sector as of October 2025. This ratio, which is close to 100%, highlights the potential for risk pressure on credit insurance lines. According to Ogi Prastomiyono, Head of the Executive Team for Supervision of Insurance, Guarantees, and Pensions at the OJK, the high claims ratio is influenced by several factors, including the quality of the insured credit portfolio, economic dynamics, and underwriting practices.

Regulatory Response to Risk Pressure

To address the potential risk pressure indicated by the high claims ratio, the OJK is encouraging insurance companies to strengthen their underwriting discipline, apply pricing that is based on actuarial calculations, and comply with reserve requirements. Furthermore, through the implementation of POJK No. 20/2023, a risk-sharing mechanism with creditors has been introduced, aiming to make risk management in credit insurance products more balanced and sustainable.

Industry Adaptation to Regulatory Changes

The implementation of POJK No. 20/2023 has also prompted the general insurance industry to adapt to new regulatory requirements. As of July 2025, the industry was in the process of adjusting to these changes, which include stricter capital requirements for insurance companies offering credit insurance products. The Chairman of the Indonesian General Insurance Association (AAUI), Budi Herawan, stated that the association continues to monitor developments in the general insurance sector, including the credit insurance business line, which is experiencing its own dynamics following the implementation of POJK No. 20/2023.

Conclusion

The high claims ratio for credit insurance reported by the OJK signals potential risk pressure on the insurance sector. Regulatory efforts to enhance underwriting practices, pricing, and risk management are underway. As the industry adapts to these changes, the focus on strengthening financial resilience and governance will be crucial for the sustainability of credit insurance products.