Indonesia's Islamic insurance industry recorded negative investment returns in the first quarter of 2026 as volatility in the domestic capital market weighed on equity-based investments, according to the Financial Services Authority (OJK).
Data from OJK showed the industry's investment returns fell to minus IDR121.84bn ($7.4m) as at end-March 2026, reversing from a positive IDR545.24bn recorded in the corresponding period a year earlier, reported Kontan.co.id.
OJK's chief executive for insurance, guarantee and pension fund supervision, Ogi Prastomiyono, attributed the decline primarily to weaker market conditions, the news outlet reported.
The correction in Indonesia's benchmark stock index (IHSG) affected the performance of equity investments held by sharia life insurers, while broader market volatility continued to pressure investment performance.
To improve the resilience of investment portfolios, OJK urged takaful operators to strengthen diversification towards more stable instruments, conduct regular stress testing and enhance asset-liability management (ALM) to better match assets with long-term liabilities. The regulator also emphasised the importance of robust governance and internal oversight in investment decision-making.