State-Owned Insurers to Consolidate; LPS Explains the Impact
Badung, CNBC Indonesia – The Indonesia Deposit Insurance Corporation (LPS) believes the consolidation of state-owned insurance companies into several holding companies will have little effect on participation in the policy guarantee programme that LPS will operate.
Ferdinan D. Purba, a member of the Board of Commissioners responsible for the Policy Guarantee Programme, explained that participation would be based on companies conducting insurance activities directly, rather than solely on their position within a corporate holding structure.
He said state-owned insurers would be consolidated into several holdings by grouping companies with similar business activities. However, the structural changes would not automatically alter how participation in the policy guarantee programme is determined.
“This guarantee refers to the entities that conduct insurance activities,” Ferdinan said at an LPS media gathering at the Movenpick Hotel Jimbaran in Badung, Bali, on Friday (18 October 2026).
He cited general insurer PT Asuransi Jasa Indonesia (Jasindo), which could be placed in a separate holding. In life insurance, the reference point for determining participation would be the company that directly conducts insurance business, such as IFG Life.
Ferdinan explained that participants would be the entities that conduct insurance business and issue policies, rather than parent companies whose role is limited to operating as holdings.
He pointed to the structure of Indonesia Financial Group (IFG), which has IFG Life as the entity conducting its life insurance business. IFG, as the holding company, does not directly issue policies.
Ferdinan compared the arrangement with the bank deposit guarantee programme. Under that programme, deposits are linked to the bank that accepts them and issues deposit products. In insurance, the focus is on the company issuing insurance products.
With this approach, he said, the formation of insurance holdings would not significantly affect which entities join LPS’s policy guarantee programme, as participation would continue to be determined separately for each insurer conducting business.
“I think that with this approach, the holding structure will not affect how membership is managed, because it is specific to each individual insurance company,” Ferdinan said.
Nevertheless, consolidation could create a separate issue if an insurer within a holding company encounters difficulties. In such circumstances, coordination between LPS and the parent company would be important, particularly because the holding company is the insurer’s shareholder.
Ferdinan stressed that this matter relates more to handling a troubled insurer, or resolution, than to determining participation in the policy guarantee programme.