Indonesia's general insurance industry is expected to remain under pressure in 2026 despite sustained demand for insurance protection, as rising claims and volatile investment returns continue to weigh on insurers' financial performance.
The challenges were reflected in the industry's earnings during the first four months of the year.
According to data from the Indonesia Financial Services Authority (OJK), general insurers recorded combined profits of IDR4.3tn ($264m) as of April 2026, down from IDR5.7tn in the corresponding period a year earlier, reported Kontan.
The Indonesian General Insurance Association (AAUI) attributed the decline to persistent claims pressure across several lines of business, coupled with fluctuations in investment returns, which continue to affect the sector's profitability despite resilient demand for insurance coverage.
"AAUI is not yet in a position to confirm the detailed reasons for the profit decline, as this could be influenced by the basis of recording, reporting scope, reporting period, and the conditions of each company. Therefore, we view it as an interim performance dynamic that requires further scrutiny," AAUI Chairman Mr Budi told Kontan.
Nevertheless, he acknowledged that the general insurance industry has continued to face headwinds this year, with premium growth remaining uneven across business lines while elevated claims continue to weigh on the performance of several segments.
Business lines that continue to face significant claims pressure include credit insurance, motor, health, property, engineering and liability insurance. These segments remain particularly exposed to economic conditions, the quality of lending portfolios, inflation in vehicle and property repair costs, rising medical expenses and increasing operational risks.