Bali:Indonesia's non-life insurance segment is experiencing margin pressures despite a stable outlook, supported by resilient macroeconomic fundamentals and promising premium growth prospects.

According to BERNAMA News Agency, AM Best's report highlights that regulatory measures are enhancing financial resilience and risk management. Efforts to manage medical inflation are expected to positively impact the domestic health insurance sector. However, profitability remains constrained due to claims inflation and competitive market conditions, as noted by AM Best financial analyst XinYa Ong.

Most Indonesian insurance and reinsurance companies have met the initial minimum equity requirement of 250 billion Indonesian rupiah by July 2026, though financially weaker non-life insurers still face challenges. The industry is also gearing up for a new risk-based capital framework, with regulatory reporting starting in 2027, aligning with international standards. AM Best director Chris Lim suggests this transition may enhance capital discipline and risk management practices over time.

To address rising claims costs and underwriting margin pressures, the non-life segment is increasing pricing. Despite these challenges, insurers benefit from adequate reinsurance capacity through access to both domestic and international markets.

AM Best will be attending the 30th annual Indonesia Rendezvous and Conference from October 12 to 15 at the Bali International Convention Centre, providing resources for insurance professionals, including Best's Credit Ratings and Best's National Scale Rating for Indonesia.