Bad Debt Claims Shadow Insurance Premium Growth

Banking credit growth is said to provide opportunities for the credit insurance business. However, the insurance industry is also shadowed by claim ratios if the risk of bad debts increases.

Based on data from the Financial Services Authority (OJK) as of June 2026, the credit business line within the general insurance and reinsurance industry recorded premium income of Rp11.87 trillion. This figure represents a year-on-year (yoy) growth of 7.10%.

The Chief Executive of Insurance, Guarantee, and Pension Fund Supervision at OJK, Ogi Prastomiyono, stated that insurance has been burdened by claims totalling Rp10.85 trillion. This figure is equivalent to a claim ratio of 91.44%.

“Banking credit growth still provides opportunities for the credit insurance business, but it needs to be balanced with strengthened underwriting, portfolio quality, risk-based pricing, reinsurance adequacy, as well as recovery and subrogation,” Ogi stated in a written response, as quoted on Wednesday (2/9/2026).

Moving forward, OJK is encouraging the industry not only to pursue premium growth but also to maintain risk quality, profitability, and business sustainability.

As is known, Bank Indonesia (BI) recorded banking credit growth in June 2026 at 12.67% yoy, an increase from the May 2026 growth of 11.51% yoy.

Based on usage groups, this development was supported by investment credit, working capital credit, and consumer credit, which in June 2016 grew by 24.90% yoy, 8.94% yoy, and 5.75% yoy, respectively.

In terms of credit quality, OJK noted that the gross non-performing loan (NPL) ratio stood at 2.09% and the net NPL at 0.82%. Meanwhile, the loan at risk (LAR) ratio remained stable at 8.47%.