Indonesia's Financial Services Authority (OJK) is re-evaluating current limits on foreign ownership in the reinsurance industry, prompted by a growing shortfall in the nation's reinsurance balance of payments.
Last year, Indonesia posted a IDR 12.1tn ($732.9m) deficit in reinsurance transactions, reflecting a persistent upward trend in recent years.
OJK Executive Chairman for Insurance, Guarantee, and Pension Fund Supervision Ogi Prastomiyono noted that the rising deficit highlights the local industry's reliance on foreign reinsurers based overseas.
“We are collaborating with relevant ministries to consider easing regulations, which could enable multinational reinsurance firms to establish branches in Indonesia,” Mr Prastomiyono stated at a press conference on Friday.
OJK is also gradually increasing minimum capital requirements for insurers and reinsurers to strengthen the industry’s financial resilience.