PT Asuransi Eka Lloyd Jaya (Eka Lloyd) is facing heightened pressure as Indonesia’s Financial Services Authority (OJK) imposes stricter capital requirements, according to Fitch Ratings.
The OJK plans to raise the minimum equity requirement for non-life insurers to $15 million (IDR 250 billion) by the end of 2026, a significant increase from the current $6.1 million (IDR 100 billion).
Fitch warned that Eka Lloyd may need to raise additional capital to comply with the new requirements, as the company’s current shareholders’ equity of $98 million (IDR 162 billion) falls short of the upcoming threshold. This presents a challenge for the insurer in balancing regulatory capital compliance with its growth ambitions.
The company’s risk-based capital (RBC) ratio dropped to 195% by the end of 2024, down from 202% at the end of 2023. This decline was attributed to increased reserves, which were required due to the insurer’s ongoing business expansion in its core segment of multipurpose credit insurance.
Eka Lloyd saw a 33% rise in gross premiums written (GPW) in 2024, continuing its trend of double-digit growth for the fourth consecutive year. This performance contrasts with the broader non-life insurance sector, which grew by just 4%. The bulk of Eka Lloyd’s business is centered around multipurpose credit insurance, which accounted for over 90% of its GPW in 2024. This product is designed to cover policyholders’ loan payments in the event of default, primarily linked to loans from rural banks.
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