OJK Implements 4 Main Pillars Of Insurance Industry Reform And Retirement Funds

Insurance (Photo: dock. unpslash)

JAKARTA - The Financial Services Authority (OJK) focuses on implementing reforms to further strengthen the insurance sector and pension funds. The implementation is carried out through four main pillars. The four main pillars of insurance industry reform and pension funds are strengthening market capital and deepening, improving risk management and management, strengthening the industrial ecosystem, and adopting the best practices and international standards. "OJK and the pension fund industry have launched the 2024-2028 pension fund roadmap to increase participation, strengthen governance, improve human resources, and create a supportive ecosystem," said OJK Board of Commissioners Chairman Mahendra Siregar quoting Antara. This was conveyed by Mahendra when opening the Runtable on Insurance and Retirement Savings in Asia 2024 organized by OJK, The Organization for Economic Co-operation and Development (OECD) and the Asian Development Bank Institute (ADBI), in Yogyakarta, Tuesday. According to Mahendra, in the insurance sector, OJK has issued various policies to strengthen regulation and supervision including new regulations to encourage capital improvement and introduce increments for companies to encourage development and consolidation. While in the pension fund sector, OJK is completing mandatory and voluntary programs in coordination with the government.

OJK's Chief Executive of Insurance, Guarantee and Pension Fund Ogi Prastomiyono said, OJK has consistently continued to make simultaneous efforts to solve various problems in the insurance industry and pension funds while developing and strengthening the two sectors. "To solve the current problem, our strategy is to encourage the settlement of financial service institutions experiencing difficulties, conduct public communication and anticipate uncertainty," he said. Ogi also said that the insurance sector and pension funds in Indonesia are currently quite strong and supported by 144 insurance companies, 220 insurance brokers and loss assessors, 199 private pension funds, and 4 mandatory pension program providers and social insurance programs that contributed significantly to national financial stability. In April 2024, the insurance sector, guarantee institutions, and collective pension funds have assets of IDR 2,623.65 trillion, an increase of 5.55 percent compared to the previous year.

Currently, Indonesia has around 457 million insurance policies and 28 million pension program participants.

Interim Chair OECD Insurance and Private Pension Committee (IPPC) Yoshihiro Kawai emphasized the importance of all stakeholders overcoming the issue of the protection gap, which is currently still a major issue in both the insurance industry and the pension fund. Meanwhile, Dean ADBI Tetsushi Sonobe said the importance of sustainability issues on insurance and pension funds amid the current risk of climate change. Discussion activities during the two days raised several important issues, such as the development and strengthening of the insurance sector in Asia, development and strengthening of the pension fund sector in Asia, the role of insurance in supporting climate change mitigation, the role of insurance in mitigating flood disaster risk, and protection in pension programs. In addition, it also discusses the protection gap in natural disaster insurance, the challenges of pension programs in Asia, the use of technology to improve the insurance sector and pension funds, as well as the increasing availability of financial instruments and long-term investments for insurance companies and pension funds.