OJK Explains Impact of Geopolitical Tensions on Insurance Industry
The Executive Head of Insurance, Guarantee, and Pension Fund Supervision at the Financial Services Authority (OJK), Ogi Prastomiyono, stated that geopolitical tensions could increase risks in the general insurance industry. These risks arise, among others, through rising logistics costs, supply chain disruptions, and energy volatility.
“Business lines that are relatively more affected include marine cargo, property, and onshore energy, in line with increasing risk exposure in global trade and transportation,” Ogi said in a written statement, quoted on Friday, 20 March 2026.
He explained that reciprocal US tariffs and escalating conflicts in the Middle East have the potential to pressure global trade, thereby affecting premium growth and increasing risks in marine cargo insurance.
According to Ogi, risks in marine cargo insurance need to be anticipated through strengthened underwriting, premium rate adjustments, and more cautious risk management. Based on January 2026 data, the transportation or marine cargo business line in general insurance and reinsurance recorded premiums of Rp 1.33 trillion, or 7.23 percent of total general insurance and reinsurance premiums. This value declined by Rp 0.18 trillion or 11.91 percent year-on-year.
Ogi assessed that global turbulence risks driving premium adjustments, among others, due to reinsurance price adjustments and increased risk perception. However, he said, premium adjustments are generally carried out gradually while still considering market conditions and underwriting prudence principles.
Furthermore, Ogi opined that global economic volatility could affect the performance of investment-based products such as unit links. This is because the value of these products follows capital market dynamics. “Such conditions also have the potential to increase cash value claims on PAYDI (investment-linked insurance products),” Ogi stated.
However, based on January 2026 data, PAYDI cash value claims were recorded to have decreased by 3.69 percent year-on-year. Ogi said this condition indicates that up to now, market pressures have not significantly driven fund withdrawals by policyholders.