Around two-thirds (100 out of 145) existing (re)insurance companies as of the end of August 2024 met the first tranche of capital hikes before the 31 December 2026 deadline. Another 45 entities still need to do so, according to the Financial Services Authority (OJK).
The regulator requires existing insurance companies to meet the requirements by the end of 2026.
Furthermore, several (re)insurers have already met the second tranche of emt.
Several (re)insurance companies have also already met even higher minimum capital requirements before the 31 December 2028 deadline in a second phase of minimum capital increases.
The distribution of companies in compliance or not yet in compliance with minimum capital requirements in the first stage of capital hikes is as follows:
|
2026 deadline
|
Not yet compliant
|
Compliant
|
Required minimum capital (IDR bn)
|
|
Conventional general insurers
|
23
|
49
|
250
|
|
Conventional life insurers
|
15
|
34
|
250
|
|
General takaful companies
|
2
|
4
|
100
|
|
Family takaful companies
|
3
|
6
|
100
|
|
Conventional reinsurers
|
1
|
7
|
500
|
|
Retakaful companies
|
1
|
-
|
200
|
|
Total
|
45
|
100
|
|
A second stage of minimum capital requirements will be implemented after 2026. the higher requirements must be met by 31 December 2028. In the second phase, the required minimum capital depends on how a (re)insurance company is classified. In the second stage, there will be two tiers of minimum capital — KPPE I and KPPE II.
Several insurers have already met the Stage 2 capital requirements, and their distribution is as follows:
|
2028 deadline
|
KPPE 1
(including those in KPPE 2)
|
KPPE 2
|
|
Type
|
Already compliant
|
Required minimum capital (IDR bn)
|
Already compliant
|
Required minimum capital (IDR bn)
|
|
Conventional general insurers
|
28
|
500
|
17
|
1,000
|
|
Conventional life insurers
|
28
|
500
|
24
|
1,000
|
|
General takaful companies
|
2
|
200
|
2
|
500
|
|
Family takaful companies
|
6
|
200
|
5
|
500
|
|
Conventional reinsurers
|
3
|
1,000
|
1
|
2.000
|
|
Retakaful companies
|
-
|
400
|
-
|
1,000
|
|
Total
|
67
|
|
49
|
|
"Increasing insurance capital is one of OJK's focuses in strengthening and developing the insurance sector. These provisions are outlined in the issuance of POJK 23/2023 (regulation) concerning Insurance Business and Institutional Licensing," said Mr Ogi Prastomiyono, chief executive of OJK's Insurance, Guarantee, and Pension Fund Supervision division.