Welcoming the Blessings of Sharia Insurance
The Financial Services Authority (OJK) has provided the latest updates on the mandatory separation or spin-off of Sharia Business Units (UUS) in the insurance industry. This regulation is outlined in Article 9 of POJK No. 11 of 2023 and must be completed no later than the end of 2026. As of 27 April 2026, there are nine companies in the process of spinning off by establishing new companies.
The Financial Services Authority (OJK) reported that 41 Sharia insurance and reinsurance companies submitted documents for changes to the Sharia Unit Separation Work Plan (RKPUS) on Tuesday (5 May 2026). This administrative step demonstrates the industry’s compliance with Article 9 of POJK No. 11 of 2023.
Of these, 28 entities have chosen the route of establishing a new company to carry out this corporate action. The submission of these work plans aims to strengthen the structure of the Sharia financial industry in Indonesia through the independence of Sharia business units.
Opportunities and Challenges of Sharia Insurance in Indonesia
With Sharia life insurance assets in Indonesia showing positive growth, reaching Rp34.70 trillion in early 2025, up from Rp33.18 trillion in 2024, Sharia insurance in Indonesia has great potential due to the largest Muslim population and increasing awareness of halal products.
However, it faces major challenges including low literacy, limited capital, and the need for product innovation. The 2026 spin-off of Sharia units presents an opportunity to strengthen branding, while also posing management challenges.
Successfully turning investment results from a negative Rp311.89 billion in February 2025 to a positive Rp545.24 billion in February 2026, according to OJK data, there are several opportunities for Sharia insurance that can be highlighted as follows:
First, the largest Muslim market: the large Muslim population offers vast market penetration potential. Indonesia’s large Muslim population offers vast and promising market penetration potential, especially in the halal industry and Muslim lifestyle. In 2026, the global halal economy is projected to grow rapidly, strengthening the position of the Muslim population as the main driver of global consumption.
The market potential in 2026 includes: a) With more than 242 million Muslim inhabitants in 2026, Indonesia maintains its position as the country with the largest Muslim population in the world. b) Growth in Halal Market Value: The global halal economy is projected to reach US$3 trillion in 2026, indicating significant opportunities for food, cosmetics, fashion, and other service sectors. c) Mandatory Halal in October 2026: Government Regulation No. 42 of 2024, which mandates halal certification for food, beverages, slaughter products, and cosmetics, will drive standardisation and consumer trust, expanding the penetration of halal products domestically. d) Key Halal Industry Sectors: In addition to food and beverages as the backbone, Sharia financial sectors, Muslim fashion, and Muslim-friendly tourism (halal tourism) are also growing significantly. e) Global Spending: Global Muslim spending is projected to reach US$2.43 trillion, reflecting substantial purchasing power. With its large population, Indonesia has great potential to transform from merely a consumer to a producer and global halal industry hub.
Second, Halal Ecosystem: Integration with Sharia financial institutions and halal lifestyle trends. The halal ecosystem in Indonesia in 2026 has transformed into a fully integrated system, uniting the halal industry supply chain with Sharia financial institutions, driven by expanding halal lifestyle trends.
Third, Digitalisation: Utilisation of AI and technology for more personalised marketing and services. Digitalisation through the use of Artificial Intelligence (AI) and modern technology has changed the paradigm of marketing and customer service to be more personal, relevant, and efficient. In 2026, this approach is no longer just an option but a strategic necessity to enhance customer loyalty and experience.
Fourth, Fairness Sentiment: The superiority of the risk-sharing concept (takaful), considered fairer than conventional. The risk-sharing concept (takaful/Sharia insurance) is considered fairer than conventional (risk transfer) because it is based on the principles of mutual assistance (ta’awun) and togetherness. Takaful focuses on collective protection, not just the commercial transfer of risk to the company.
Fifth, 2026 Spin-off: Separation of entities triggers product innovation and better business focus. The spin-off or separation of Sharia Business Units (UUS) in Indonesia’s insurance sector, which must be completed no later than 31 December 2026, becomes the main catalyst for industry transformation. In accordance with POJK No. 11 of 2023, this policy forces UUS to transform into independent entities (full-fledged) or transfer their portfolios.