Danantara Targets State-Owned Insurance Merger to Begin September 2026

The consolidation of state-owned insurance enterprises is targeted for completion this year, with technical merger discussions expected to conclude by July 2026 and the legal merger process to begin in September 2026. To discuss the progress, Head of BP BUMN and COO of Danantara Indonesia, Dony Oskaria, held a meeting with IFG President Director Hexana Tri Sasongko on Wednesday. The meeting focused on business integration aspects, strengthening governance, capital optimisation, and developing synergies among entities that will form part of the post-merger corporate structure. Various strategic steps necessary to ensure the integration process runs effectively and provides long-term added value were also a primary concern. “This consolidation is an important step to strengthen the state-owned insurance industry so that it becomes healthier, more efficient, and more competitive,” Dony stated. Through this transformation, the resulting entity is expected to achieve a stronger business scale, improve operational efficiency, enhance underwriting and investment capacity, and expand its ability to provide protection to the public and the business world. By strengthening the structure of the state-owned insurance industry, BP BUMN and Danantara hope the insurance sector can play a more strategic role in supporting financial system stability, increasing national insurance penetration, and supporting Indonesia’s economic financing and development. Separately, the Chairman of the Indonesian General Insurance Association (AAUI), Budi Herawan, said that discussions on the consolidation of state-owned insurers are ongoing between institutions and consultants, with a target completion date of 31 July 2026. The merger process is expected to begin in September 2026, aiming for full completion by January 2027, although it remains unclear which entity will serve as the surviving shell. The general insurance association has also provided input to Danantara, urging that the consolidation process should not disrupt the performance of general insurance companies, especially given the concurrent obligation to spin off sharia business units by the end of 2026. Budi noted that some state-owned insurers are not in good financial health and it remains uncertain whether they will receive state capital injections (PMN) after the merger. He also highlighted that portfolio transfers are complex and that run-off processes must proceed smoothly. COO Dony Oskaria previously stated that the number of subsidiaries and sub-subsidiaries of state-owned enterprises would be reduced from 1,043 entities to around 300 this year, with all SOEs affected by the restructuring, including the insurance sector. The plan is to consolidate 15 insurance entities into three: one life insurance company, one general insurance company, and one credit insurance company.