Indonesia: Shariah suretyship and credit insurance seen as pillars of takaful growth
Source: Middle East Insurance Review | Mar 2026
The Shariah insurance industry in Indonesia has at least two growth engines, according to Shariah economist, Mr Adiwarman Azwar Karim.
The first growth engine comprises the Shariah suretyship and Shariah credit insurance branches, enabled by a regulation issued at the end of 2023.
“Market doubts about the legality of Sharia suretyship are now gone. We can aggressively enter government infrastructure projects that require Shariah guarantees,” Mr Adiwarman told the news platform, Kompas.com.
The second engine is the group ecosystem to cover the risk of buyer default (trade insurance), already dominated by Islamic insurance.
Mr Adiwarman also said that the competitive landscape in Indonesia’s general takaful sector will undergo a major shift in 2026, with the entry of 11 new players and the exit of seven established companies.
Divestment
2026 is the final year of a multi-year grace period for insurers to spin off or divest their Shariah business units (UUS). The regulations regarding the spin-off of Shariah insurance have been in place since 2021, but the divestment process was disrupted by the 2020-2022 COVID-19 pandemic. Insurers can form a new company to undertake takaful business or, if they are unable to carry out a spin-off, they can transfer their business portfolio to another company.
The Chairman of the Indonesian Sharia Insurance Association, Mr Rudi Kamdani, has said that, overall, at least 29 family and general takaful would be added this year. There will be a total of 45 Shariah insurance companies in the country. Before 2026, there were five full-fledged general takaful players in the industry. M