OJK Reveals Impact of Geopolitical Tensions on the Insurance Industry
Sekolapedia – 27 March 2026 | Jakarta – The Financial Services Authority (OJK) has emphasised that geopolitical tensions, including the conflict between the United States and Iran, are exerting significant pressure on Indonesia’s insurance industry. In response to these dynamics, OJK has outlined projections for insurance asset growth up to 2026 and risk mitigation strategies that market players must adopt.
Insurance and Pension Fund Asset Growth Projections
According to a statement from Ogi Prastomiyono, the Executive Head of OJK’s Insurance, Guarantee, and Pension Fund Supervision, the insurance industry’s assets are expected to grow between 5% and 7% in 2026. Meanwhile, pension fund (dapen) assets are projected to increase more rapidly, at 10% to 12% over the same period. This achievement is anticipated to be supported by strengthened capitalisation, improved governance, and stricter risk management.
Impact of Geopolitical Tensions on Insurance Risks
The military conflict between the United States and Iran is creating uncertainty in global financial markets, which indirectly affects insurance companies’ premiums, claims, and investments. The business lines most impacted include property insurance, marine transport insurance, and political risk insurance. The increased frequency of claims related to property damage and supply chain disruptions requires insurance companies to adjust premium rates and tighten underwriting evaluations.
OJK highlights that geopolitical tensions can trigger volatility in capital markets, thereby testing the resilience of insurance companies’ investment portfolios. Prudent investment management is key to protecting asset values and ensuring sufficient liquidity in the face of potential sudden fund withdrawals.
Internal Industry Challenges and Strengthening Efforts
In addition to external factors, OJK has identified significant internal challenges. As many as 20 insurance companies have yet to spin off their Sharia Business Units (UUS), which poses compliance risks and product fragmentation. OJK assesses that integrating Sharia services is essential to meet the increasingly diverse market demands.
Industry players must also navigate financial market dynamics, rising claim rates in certain business lines, and the urgent need to enhance operational efficiency. OJK stresses the importance of product innovation, optimising distribution through digital channels, and applying analytics technology to improve risk assessment.
Growth Strategies Through Shipyard Incentives
In the context of diversifying revenue sources, several insurance companies, including Jasindo, have prepared specific strategies to leverage government incentives in the shipbuilding sector. Four main strategies include expanding ship insurance coverage, developing protection products for maritime contractors, forging partnerships with the shipping industry, and utilising fiscal subsidies to boost profitability.
These strategies are expected to open new growth opportunities, particularly given the rising demand for shipbuilding in Southeast Asia. By integrating incentive policies, insurance companies can balance risk portfolios and enhance their contribution to national economic growth.
OJK’s Concrete Steps to Support Stability
OJK has formulated several policy measures to strengthen the insurance industry’s resilience amid geopolitical tensions. These include:
Increasing minimum capital requirements for insurance companies operating in high-risk lines.
Implementing stricter governance standards, including periodic risk audits.
Intensive supervision of investments in geopolitically risky assets, with clear exposure limits.
Support for companies undertaking UUS spin-offs to accelerate Sharia integration.
Provision of fiscal incentives for companies developing innovative products in the maritime sector.
With this series of policies, OJK hopes the insurance industry can continue to grow sustainably, even amidst global geopolitical turbulence. Strengthening capitalisation, governance, and risk management forms the primary foundation for addressing challenges while capitalising on emerging opportunities.
Overall, although geopolitical tensions add operational complexity, the growth prospects for insurance and pension fund assets remain positive as long as companies can adapt quickly, improve efficiency, and dynamically adjust investment and product strategies.