JAKARTA - OJK appealed to financial service institutions (LJK) to increase caution in managing risks as an effort to anticipate the economic slowdown.
Chief Executive of the Insurance, Guarantee and Pension Fund (PPDP) of the Financial Services Authority (OJK) Ogi Prastomiyono in Jakarta, Sunday, April 27, reminded that the economic slowdown could have an impact on the performance of non-bank LJKs, such as pension and insurance funds.
"For pension funds, slowing economic growth can reduce investment returns, reducing the ability of pension funds to fulfill future obligations," he said, quoted by Antara.
As for the insurance industry, he stated that the economic slowdown could affect the investment returns of unit link products and increase the risk of claims or cash withdrawals.
He said that the declining purchasing power of the community could also reduce the demand for insurance products, especially investment-based ones.
"This impact requires non-bank LJK to be more careful in managing risks and innovating in their products," said Ogi.
Considering the increasingly volatile global economic conditions due to the United States' import tariff policy and the American-China trade war, a number of international financial institutions have revised the projected economic growth of countries in the world.
The World Bank (World Bank) and the International Monetary Fund (IMF) lowered Indonesia's economic growth projection this year from 5.1 percent to 4.7 percent, while the prediction of the Organization for Economic Co-operation and Development (OECD) fell from 5.2 percent to 4.9 percent.
OJK noted that insurance industry assets increased 1.03 percent on an annual basis or year-on-year (yoy) from IDR 1,130.05 trillion in February 2024 to IDR 1,141.71 trillion in February 2025.
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This growth was supported by an increase in commercial insurance assets by 1.15 percent yoy to Rp920.25 trillion and an increase in non-commercial insurance assets by 0.54 percent yoy to Rp221.45 trillion.
The pension fund industry also experienced an increase in total assets by 5.94 percent yoy to Rp1,511.71 trillion.
This amount consists of voluntary pension program assets worth IDR 381.13 trillion, up 2.36 percent yoy, and mandatory pension program assets of IDR 1,130.58 trillion, growing 7.20 percent yoy.
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