Indonesia Life Insurers - Defaulted

Several insurers which have defaulted in the last 10 years on payments of claims and benefits have caused public anxiety. Moreover, these cases of default involve some large insurers. The most recent case of default is Asuransi Jiwa Kresna or Kresna Life. Life insurers that have been involved in payment defaults in the past decade include:

Asuransi Jiwa Kresna (Kresna Life) - On 20 February 2020, privately-owned Kresna Life had written to say that it was postponing the maturity date of the products by six months until August. But the life insurer announced on 14 May that it would postpone insurance claim and benefit payments to Kresna Link Investa (K-LITA) and Protecto Investa Kresna (PIK) policyholders, citing force majeure as its reason. On 3 August, the OJK prohibited Kresna Life from accepting any new business until recommendations are made following an ongoing OJK examination. In addition, OJK has also ordered Kresna Life to prepare a financial restructuring plan as well as a detailed claim payment plan.

Asuransi Jiwasraya - State owned life insurer Jiwasraya first announced defaults in October 2018. The insurer failed to pay its customers on the maturity of a savings plan involving sums totalling IDR16tn ($1.07bn) due to investment mismanagement.

Asuransi Bumi Asih Jaya - The OJK revoked the business licence of Asuransi Jiwa Bumi Asih Jaya on 18 October 2013 when the company was unable to meet financial health requirements related to risk based capital, the ratio of investment to technical reserves and claims. In 2009, the Minister of Finance had imposed a sanction prohibiting the insurer from accepting new business. Subsequently, Bumi Asih Jaya was still unable to meet its obligations, leading the OJK filed a bankruptcy suit in the Central Jakarta Commercial Court.

AJB Bumiputera 1912 - In January 2018, AJB Bumiputera admitted to delays in claim payments due to the low premiums generated by the company. At the end of 2018, the company experienced a deficit of IDR20.7tn, wherein assets totalled IDR10.3tn but liabilities reached IDR31tn.

At 31 December 2019, the total assets of AJB Bumiputera were recorded at IDR10.3tn. The deficit was IDR23tn. The amount of unpaid claims reachedIDR4.2tn. Potential claims in 2020 are estimated at IDR5.4tn.