Reasuransi Indonesia Utama (Persero), or Indonesia Re, has affirmed that strengthening the capacity of the reinsurance industry is a critical foundation for building a healthier, more resilient national insurance industry capable of supporting Indonesia’s economic growth amid increasingly complex risks.
Behind every insurance policy held by the public lies a reinsurance system that plays a role in maintaining insurance companies’ ability to meet their obligations when facing large-value claims.
“Through the mechanism of transferring part of the risk from insurance companies to reinsurance companies, the industry’s capacity to protect various strategic sectors, from infrastructure projects, industrial zones and power plants to high-value assets, can continue to be maintained,” said Indonesia Re’s Director of Technical Operations Delil Khairat, as quoted from a statement on Wednesday, July 29, 2026.
Mr Khairat said that strengthening reinsurance capacity is becoming increasingly important as the need for protection against new risks develops, including climate change, digital transformation and cyber threats.
“Reinsurance no longer functions merely as insurance for insurers. Reinsurance is the foundation that maintains the stability of the insurance industry while also supporting national economic activity. That is why strengthening reinsurance capacity has become a strategic necessity, so the industry can respond to development challenges and continuously evolving risks,” he said.
Indonesia Re believes the national insurance industry still has considerable room for growth. One indicator is the insurance penetration rate, which has not shown significant growth in recent years.
According to Mr Khairat, this condition shows that the industry’s contribution to the national economy can still be further increased through strengthening industry foundations, improving literacy, product innovation, and expanding access to protection for the public.
This view aligns with the Roadmap for the Development and Strengthening of Indonesian Insurance 2023-2027 issued by the Financial Services Authority (OJK), which places increasing industry capacity as one of its main priorities through strengthening capital, governance and digitalization, as well as improving the competitiveness of both insurance and reinsurance companies.
Amid these growth opportunities, Indonesia Re believes the national reinsurance industry still faces a number of structural challenges, particularly in terms of capital capacity and international competitiveness.
As companies that take on high-value, highly volatile risks, reinsurance companies require strong financial capacity to be able to support the sustainable growth of the insurance industry.
“Reinsurance companies are tasked with taking on larger and more volatile risks. Because of this, the financial strength of reinsurance companies should naturally also be greater than that of insurance companies,” he said.
Beyond capital considerations, reinsurance companies are also required to have geographically diversified business portfolios so that risk exposure is not concentrated in a single region. This diversification is a key characteristic of global reinsurance companies in maintaining business resilience when disasters or major losses occur in a given country.
This article was originally published in Bahasa Indonesia on mediaasuransinews.co.id.