OJK Indonesia - Foreign Ownership

The Financial Services Authority (OJK) will soon issue a regulation on foreign ownership in the country’s insurance industry as mandated by a revised law on insurance.Legislators have called on the agency to lower the foreign ownership cap to 49 percent from the current 80 percent. But no decision on the foreign ownership threshold had been made.

Foreign shareholders in the insurance industry were currently allowed to own stakes of up to 80 percent. The OJK has previously suggested that foreign shareholders might choose to divest their shares through an initial public offering (IPO), or by directly seeking local strategic investors.

In the domestic life insurance business, the 10 largest firms based on their total premiums are dominated by joint ventures backed by multinational firms, such as the UK’s Prudential plc, Canada’s Manulife Financial and Germany’s Allianz. State-owned Jiwasraya is the only local company competing in the top tier.

In addition to that, OJK would also invite insurance firms to discuss a new stipulation regarding a “single presence policy” in the 2014 law that required two sister insurance firms owned by a single holding company to be merged into one.