Cyber Attack Risks Loom Over Insurance Industry, OJK Calls for Strengthened Governance

JAKARTA — The Financial Services Authority (OJK) views the strengthening of cybersecurity within the insurance industry as an urgent necessity amidst the increasing digitalisation of financial services. Previously, OJK revealed that cyber risk challenges persist within the insurance sector, noting that some insurance companies have suffered cyber attacks so severe that they lacked sufficient data to prepare accurate financial statements.

Ogi Prastomiyono, OJK’s Executive Head of Insurance, Guarantee, and Pension Fund Supervision, stated that cybersecurity is no longer merely a technical issue but an integral part of healthy corporate governance. He noted that the digital transformation in the financial services sector has positioned cyber risk as a primary threat that can impact the operations of insurance companies.

These risks extend beyond system disruptions; they can also affect the integrity of corporate data, the preparation of financial reports, and the fulfilment of obligations to policyholders. “As digitalisation increases, cyber risk becomes one of the main risks that can impact operations, data integrity, financial reporting, and the fulfilment of obligations to policyholders,” said Ojek.

Supervision is being conducted in accordance with Financial Services Authority Regulation (POJK) Number 4 of 2021. Furthermore, OJK is encouraging insurance companies to integrate cybersecurity into their primary risk profiles. “Therefore, OJK is actively conducting supervision and examinations based on POJK No. 4 of 2021, while encouraging companies to integrate cybersecurity, data governance, and system reliability into their main risk profiles,” Ogi added.

He emphasised that data governance and system reliability are critical aspects that insurance companies must prioritise to ensure operational continuity and maintain public trust in the industry. Amidst rapid digital transformation, insurance companies also face challenges in maintaining customer data confidentiality and ensuring that information technology systems remain secure from potential disruptions. OJK has also called on the insurance industry to strengthen comprehensive cyber risk mitigation measures to prevent future cyber attacks.