The Financial Services Authority (OJK) urged non-bank financial services institutions to stay alert to potential risks arising from the ongoing economic slowdown.
An Indonesian news site stated that OJK Insurance, Guarantee and Pension Fund Supervisory Agency CEO Ogi Prastomiyono said that the economic slowdown has the potential to erode the performance of pension funds and insurance, especially through a decrease in investment returns and a spike in claim risks.
Mr Ogi also noted that the insurance industry is becoming increasingly vulnerable, with the economic slowdown affecting the investment performance of unit-linked products and driving higher withdrawal rates by customers.
Despite the challenges, the insurance industry continues to prosper, according to data from OJK.
The total assets of the insurance industry grew by 1.03% year-on-year, reaching IDR 1,141.71tn ($75.35bn) in February 2025, largely due to an increase in both commercial and non-commercial insurance assets.
Meanwhile, pension fund assets saw a more substantial rise of 5.94%, reaching IDR 1,511.71tn.