Indonesia: Takaful insurers see investment returns turn negative in 1Q amid market weakness
Source: Middle East Insurance Review | Sep 2026
Indonesia’s Islamic insurance industry recorded negative investment returns in the first quarter of 2026 as volatility in the domestic capital market weighed on equity-based investments, according to the Financial Services Authority (OJK).
Data from OJK revealed that the industry showed investment losses of IDR121.84bn ($7.4m) in the first three months of this year, reversing from gains of IDR545.24bn in the corresponding quarter in 2025, reported Kontan.co.id.
OJK’s Chief Executive for Insurance, Guarantee and Pension Fund Supervision, Mr Ogi Prastomiyono, attributed the decline primarily to weaker market conditions, the news outlet reported.
The correction in Indonesia’s benchmark stock index (IHSG) affected the performance of equity investments held by Shariah life insurers, while broader market volatility continued to pressure investment performance.
To improve the resilience of investment portfolios, OJK urged takaful operators to strengthen diversification towards more stable instruments, conduct regular stress testing and enhance asset-liability management to better match assets with long-term liabilities. The regulator also emphasised the importance of robust governance and internal oversight in investment decision-making. M