As of August 2026, Indonesia's Financial Services Authority reported that 117 of 147 insurance and reinsurance companies, or 80.69%, had met the minimum equity requirement due by the end of 2026. At the same time, the industry reported aggregate Risk-Based Capital of 471.57% for life insurance and 331.52% for general insurance and reinsurance, both above the 120% threshold.
Both figures sound like measures of financial strength.
They are not measuring the same thing.
For companies buying insurance, understanding the distinction helps explain what actually sits behind a policy.
A policy is a promise.
That promise still needs a balance sheet capable of surviving until the claim arrives.
Minimum Equity Is Not RBC
OJK Regulation No. 23 of 2023 establishes first-stage minimum equity requirements to be met by 31 December 2026: IDR250 billion for insurers, IDR500 billion for reinsurers, IDR100 billion for sharia insurers and IDR200 billion for sharia reinsurers. OJK describes the broader policy as part of strengthening industry structure, resilience, competitiveness, institutional capacity and operations.
Equity, in simplified terms, reflects the residual value of assets after liabilities under applicable accounting and regulatory frameworks.
RBC answers a different question.
Under a solvency framework, available solvency is assessed relative to capital requirements arising from the company's risks—including credit, liquidity, market, insurance and operational risk. OJK reporting formats separately identify solvency levels and risk-based minimum capital requirements.
Meeting the minimum equity requirement therefore does not tell the entire financial-strength story.
Nor does an industry RBC of 331% mean every general insurer has an RBC of 331%.
The OJK figures are industry aggregates.
What Actually Supports Claims?
Insurance is sometimes described simply as collecting premiums and paying claims.
The real financial structure is more complex.
Insurers hold assets and investments, establish liabilities and technical reserves for policy obligations, manage cash flows, and maintain capital buffers against risk.
OJK Regulation No. 26 of 2025 updated the framework governing asset and liability management for conventional insurers and reinsurers. OJK explicitly links the framework with stronger investment governance, a healthier insurance ecosystem and the interests of policyholders.
In OJK reporting formats, premium reserves, claim reserves and catastrophe-risk reserves appear within technical reserves.
Claims capacity therefore does not rest on capital alone.
It also depends on how liabilities are measured, how assets are managed, whether liquidity is maintained, how investments are governed and whether sufficient buffers exist against risk.
Reinsurance Adds Another Layer
Some risks are too large or too concentrated for one insurer to retain entirely.
That is where reinsurance enters the structure.
In simplified terms, an insurer can transfer part of the risk it has accepted to a reinsurer under an agreed reinsurance programme.
OJK rules on reinsurance support require insurers to maintain reinsurance strategies intended to provide sufficient capacity to meet liabilities and to consider factors including the suitability of counterparties.
Customers usually do not see this layer.
Their contractual relationship remains with the insurer.
For large property, engineering, catastrophe, marine or liability exposures, however, reinsurance can form an important part of the insurer's ability to absorb severe losses.
Insurance financial strength is therefore layered.
The Cheapest Premium Does Not Answer Every Important Question
Corporate insurance quotations are easy to compare.
Premium A is lower than B.
One deductible is smaller.
Another policy offers a larger limit.
Additional extensions may be included.
Those comparisons matter, but insurance transfers risk over a different time horizon from buying an ordinary product.
When a company purchases a machine, much of its quality can begin to be assessed when the machine arrives.
With insurance, the most consequential moment may occur months later—during a major fire, accident, liability event or catastrophe.
Corporate buyers therefore need to consider whether the insurer's capacity matches the risk being transferred.
Not only:
How much is the premium?
But also:
Who stands behind the promise?
Five Layers Worth Reading Together
As an educational framework, GATICORP views insurer financial strength through several layers:
Capital — what equity buffer is available?
Solvency — how does available financial capacity compare with the risks being assumed?
Reserves & Assets — are policy obligations supported by appropriately managed reserves and assets?
Reinsurance — how much risk is retained and what support exists for larger exposures?
Operational Capability — can underwriting, claims, risk management, governance and service actually execute the policy promise?
This is not a rating model and does not replace professional analysis.
Different insurers can have different portfolios, risk profiles and strengths.
Do Not Read an Industry Average as a Company Number
OJK's latest figures show aggregate industry RBC comfortably above the 120% threshold. At the same time, only 80.69% of the 147 reported insurers and reinsurers had met the end-2026 equity requirement as of August, while OJK continued special supervision of several insurance and reinsurance companies.
All of those facts can be true simultaneously.
An industry can look strong in aggregate while individual companies differ substantially.
That is why industry averages should not be used to infer the condition of a particular insurer.
Minimum equity should not be treated as a simple “safe” or “unsafe” label either.
Financial strength is a combination of factors.
A Policy Is a Long-Term Promise
Insurance buyers usually see the product from the front:
wording, limit, deductible, premium and service.
The structure that makes the promise possible sits behind it:
capital, reserves, assets, reinsurance, governance and claims operations.
For an individual customer, analysing all of that may feel distant.
For a company transferring major property, cargo, liability, employee-benefit, construction or business-interruption risks, counterparty quality becomes part of its own risk-management process.
When risk is transferred to an insurer, the risk has not simply disappeared.
Part of it becomes counterparty risk against the organisation promising to pay.
The strongest insurance decision therefore needs to answer not only:
“What is covered?”
It should also provide reasonable confidence in a second question:
“Does the organisation making the promise have the foundations to honour it?”
Sources & Editorial Notes
- OJK — September 2026 Board of Commissioners Meeting. As of August 2026, 117 of 147 insurance and reinsurance companies (80.69%) had met the first-stage minimum equity requirement due at year-end. Aggregate RBC was 471.57% for life insurance and 331.52% for general insurance/reinsurance, both above the 120% threshold. These RBC figures are industry aggregates, not individual-company figures.
- OJK Regulation No. 23 of 2023 on Licensing and Institutional Requirements for Insurers and Reinsurers. Used for the first-stage 31 December 2026 minimum equity levels: IDR250 billion for insurers, IDR500 billion for reinsurers, IDR100 billion for sharia insurers and IDR200 billion for sharia reinsurers.
- OJK Regulation No. 26 of 2025 on Asset and Liability Management for Insurers and Reinsurers. Effective from November 2025 and replacing the earlier conventional financial-health framework for asset and liability management. Used for the context of investment governance, assets and liabilities.
- OJK Circular 23/2024 — periodic reporting format for insurers and reinsurers. Used to illustrate that reporting separately identifies assets, liabilities, technical reserves, solvency and risk-based minimum capital.
- OJK provisions on reinsurance support. Used for the principle that reinsurance strategy is one mechanism for maintaining capacity to meet liabilities and should consider counterparty suitability.
- This article does not state that larger equity automatically means a better insurer, or that minimum equity is equivalent to RBC, liquidity, technical reserves, ability to pay every claim, or service quality.
- Industry-level RBC data is not used to assess an individual insurer. Company-specific analysis requires company-specific financial and operational information.
- Capital → Solvency → Reserves & Assets → Reinsurance → Operational Capability is a GATICORP editorial framework, not an official OJK rating methodology.
- This article is educational and does not constitute a rating, investment recommendation, actuarial advice or recommendation of any particular insurer.
Published: October 13, 2026
