Indonesia Hikes Insurance Companies’ Minimum Capital to $16 Million by 2026

JAKARTA, Jan 10 – Indonesian regulators have mandated that insurance companies increase their minimum capital to at least 250 billion rupiah (roughly $16.06 million) by 2026, marking a 67% jump from the prior requirement, in response to recent policy lapses. Previously, insurance firms were required to maintain a minimum of 150 billion rupiah in paid-up capital.

On Wednesday, the Financial Services Authority (OJK) announced that the threshold will continue to rise, reaching between 500 billion rupiah and 1 trillion rupiah by 2028.

The OJK stated, “Inadequate capital has been identified as a critical challenge that can potentially compromise the industry’s ability to withstand economic downturns.”

Several insurers, including Asuransi Jiwasraya—a state enterprise—Asabri, which covers military personnel, and Bumiputera, one of the historic insurance names in the country, encountered financial issues after failing to honor a surge in claims.

To enter the insurance market, new entrants will now be required to invest a minimum of 1 trillion rupiah, as per the updated regulations.

The OJK also raised the minimum capital requirement for reinsurance companies to 500 billion rupiah for 2026, with plans to elevate it to 2 trillion rupiah by the end of 2028, from a former requirement of 300 billion rupiah.

The exchange rate at the time of the announcement was noted as 15,565 rupiah to $1.