OJK adjusts insurance RBC calculation method to follow global standards
Jakarta (ANTARA) - The Financial Services Authority is adjusting the risk-based capital (RBC) calculation method for the insurance industry by referring to international standards through the OJK Regulation (POJK) on Insurance Solvency Calculation, targeted for issuance this year.
“Essentially, we are following international standards. We must not fall out of alignment with international practices,” said the Executive Head of the Insurance, Guarantee, and Pension Fund Supervision (PPDP) OJK, Ogi Prastomiyono, after the PPDP Regulatory Dissemination Day event in Jakarta on Monday.
Ogi explained that the adjustment refers to standards set by the International Association of Insurance Supervisors (IAIS), particularly the Insurance Capital Standard (ICS).
According to him, the principles in ICS are general and primarily aimed at Internationally Active Insurance Groups (IAIG) or large-scale insurance companies, while OJK must also adapt them to the conditions of the domestic insurance industry.
He also emphasised that capitalisation is the main foundation for the resilience of the insurance industry as a buffer against risks.
Through the new provisions to be implemented this year, OJK seeks to gradually increase the equity of the insurance industry and apply company classifications through KPPE (Equity-Based Insurance Company Groups) 1 and KPPE 2.
“So, if equity has risen, the risk-based capital calculation follows international standards, there are standards for insurance contracts under PSAK 117, and so on, we hope the insurance industry will improve further in the future,” said Ogi.
It is noted that the insurance industry’s assets reached Rp1,219.35 trillion in February 2026, up 6.80 percent year-on-year (yoy) from the same period the previous year at Rp1,141.71 trillion.
The life insurance industry as well as general insurance and reinsurance in aggregate recorded RBC levels of 480.83 percent and 327.98 percent, respectively, above the 120 percent threshold.
In total, PPDP sector assets for the same period reached Rp2,992 trillion, growing by 9.94 percent yoy, with investments worth Rp2,313 trillion, also growing by 7.94 percent yoy.
However, to achieve the 2029 Medium-Term National Development Plan (RPJMN) targets, higher growth is needed, namely around 7-9 percent for insurance and 23-25 percent per year for pension funds.
“Strategies to achieve that growth must of course be carried out collectively, both through extensification and intensification of existing programmes,” said Ogi.