Indonesia’s financial services regulator, Otoritas Jasa Keuangan (OJK), has run a stress test on the insurance industry to measure the effect of recent capital market pressure. The results show life insurers are relatively more affected by stock market pressure than general insurers. The remarks were made at a Hari Asuransi press conference at Grha AAJI in Jakarta on Tuesday 20 October 2026.
Life insurers most exposed
Sumarjono, Head of Insurance, Guarantee and Pension Fund Supervision Department at OJK, said life insurers hold stocks, government bonds and other bonds. “Life insurers have investments in stocks, SBN and bonds, so of course that has an effect,” he said. The regulator is now calculating how many insurers fall below 120 percent risk based capital.
The test was prompted by a steep fall in the Jakarta Composite Index, known as IHSG. The index dropped more than 11 percent in a single day on Friday 16 October 2026. That is its deepest decline in 28 years, since the 1998 monetary crisis.
Regulator asks for closer monitoring
OJK has asked insurers to monitor asset quality and capital. It has also asked investment committees to re-evaluate their investment strategies. Insurers hold shares, so a fall in stock prices lowers the recorded value of their assets.
The sell-off followed a consultation opened by MSCI on 15 October 2026. MSCI is considering downgrading Indonesia’s stock market status from Emerging Market to Standalone Market.
Related: Indonesian insurers may buy stocks, DAI says amid IHSG sell-off · Danantara's Rosan sees IHSG drop below 5,000 as opportunity
Source: Otoritas Jasa Keuangan (OJK)
