Policy Guarantee Programme Strengthens Insurance Industry Stability
JAKARTA — The Indonesian Deposit Guarantee Institution (LPS) is preparing two implementation scenarios for the Policy Guarantee Programme (PPP). The scenarios relate to accelerated activation of the PPP with minimum readiness levels by 2027 and full implementation in 2028 with ideal readiness levels.
Ferdinand D Purba, a member of the LPS Board of Commissioners overseeing the Policy Guarantee Programme, stated that a mechanism is necessary to maintain public confidence. “While ensuring that when an insurance company fails, the impact can be managed in an orderly manner without prejudicing policyholders and without disrupting industry stability,” he said at a Discussion and Breaking Fast gathering with Journalists organised by the Financial Editor’s Club in Jakarta on Thursday (12 March 2026).
Globally, insurance company failures are a frequent phenomenon in financial industry dynamics. Between 2011 and 2024, approximately 428 insurance company failures were recorded across various countries, with the majority occurring in general insurance.
“Meanwhile in Indonesia, between 2011 and 2025, there were 25 insurance companies whose operating licences were revoked, with approximately 17 of these categorised as company failures,” said Ferdinand.
He therefore emphasised the strategic role of the Policy Guarantee Programme in strengthening the insurance industry. The policy guarantee scheme can ensure insurance company failures are handled quickly and appropriately without disrupting overall industry stability.
In Indonesia, the PPP has a strategic role in strengthening the insurance industry ecosystem. “This programme functions not only as a protection mechanism for policyholders, but also as an instrument to maintain stability and confidence in the insurance industry,” he said.
The LPS’s PPP preparation developments in 2026 have included establishing regulatory and operational frameworks, registering PPP membership, and conducting simulations in collaboration with industry experts and practitioners. “If activation is accelerated in 2027, LPS is ready to implement,” he concluded.