OJK Monitors Insurance Company Investments Following MSCI Stock Exclusions
The Financial Services Authority (Okersitas Jasa Keuangan, OJK) is reviewing the impact of the removal of several stocks from the MSCI index on the investment portfolios of insurance companies. This assessment is being conducted amidst the current trend of weakening in the Jakarta Composite Index (IHSG).
Ogi Prastomiyono, the Executive Head of Insurance, Guarantee, and Pension Fund Supervision at OJK, stated that the authority is currently identifying which insurance companies hold the stocks that were excluded from the MSCI index. “We are conducting a deeper study on the impact of the decline in investment value for insurance companies, identifying who is affected, who holds the excluded MSCI stocks, and the total value involved,” Ogi explained during the Bisnis Indonesia Big Financial Insight event in Jakarta on Tuesday.
For context, 18 Indonesian stocks have been removed from the MSCI index, with the MSCI rebalancing taking effect after the market close on 29 May 2026. Monitoring investments has now become a primary focus for OJK in reforming the insurance industry. This is because numerous insurance company failures in the past were triggered by inappropriate investment decisions.
He explained that previously, supervision focused more on insurance products, policy sales, and claim payments, while the investment management of insurance companies had not been a primary concern. “What we have not been doing until now relates to how insurance companies manage their investment portfolios. Previously, we only supervised products, policy sales, and claims; we never looked at the investments in between,” said Ogi.
He revealed that several investment practices involving companies within the same business group or through negotiated market mechanisms were deemed insufficiently transparent. Moving forward, Ogi stated that OJK will strengthen its supervision of the investment activities of insurance companies. “That is our area for improvement; investment supervision is becoming a vital component. The reason for the failure of insurance companies in the past was, as it turns out, incorrect investments,” he concluded.