The Financial Services Authority (OJK) has reported a significant surge in layoff-related claims filed with BPJS Ketenagakerjaan, Indonesia’s social security provider for employment. Ogi Prastomiyono, Chief Executive of the OJK’s Supervisory Authority for Insurance, Guarantee, and Pension Funds, highlighted this increase in March, while the Ministry of Manpower (Kemnaker) noted that a total of 15,425 workers were affected by layoffs from January to April.
Prastomiyono emphasized that the rising trend of layoffs directly impacts the disbursement of benefits from BPJS Ketenagakerjaan, particularly for the Old Age Security (JHT) and Job Loss Security (JKP) programs. These programs are crucial safety nets for workers facing unemployment, and their increased utilization reflects the current economic pressures.
Specifically, Prastomiyono detailed that JHT claims in March rose by Rp 1.85 trillion, marking a 14.1% year-on-year (yoy) increase. This significant jump was predominantly driven by a higher frequency of claims directly linked to job terminations. The financial strain on these social security programs underscores the ripple effects of widespread layoffs across the workforce.
Furthermore, the Job Loss Security (JKP) claims experienced an even more dramatic increase, soaring by 91% yoy in March. This sharp rise is partly attributed to a relaxation of claim requirements and an enhancement of benefits, as stipulated in Government Regulation (PP) Number 6 of 2025, which amends Government Regulation Number 37 of 2021 concerning the Implementation of the Job Loss Security Program. Such policy adjustments, while beneficial for affected workers, also contribute to the heightened claim volume.
To ensure the long-term viability of these critical benefit payments, the OJK is actively promoting prudent and adaptive management within insurance programs. This involves conducting regular evaluations of program designs and benefits to ensure they remain aligned with current economic conditions and the evolving risk profiles of participants. Ogi Prastomiyono stated, “Through such an approach, we hope to maintain a balance between adequate benefits for participants and the sustainability of social security funds in the long term.”
Prastomiyono also noted that the ongoing layoff phenomenon demands serious attention from the broader insurance industry. It has the potential to negatively impact asset quality and premium growth, particularly within the credit insurance and credit life insurance sectors. As individuals lose their jobs, their financial priorities shift, often leading to a risk of insurance policies lapsing as they prioritize basic necessities over premium payments.
Simultaneously, the risk for credit insurance escalates due to the increased potential for debtor defaults. If not adequately anticipated and managed, this dual pressure can severely strain companies’ claim ratios and overall solvency. Addressing these risks requires a proactive and comprehensive strategy from all industry players to mitigate potential financial instability.
Discussing the complexities, Prastomiyono elaborated, “In credit life insurance, although the primary risks covered are death or total permanent disability, deteriorating economic conditions resulting from layoffs can indirectly contribute to an increase in claims, for example, through health factors or psychosocial stress.” This highlights the indirect but significant ways economic hardship can manifest in insurance claims beyond the most obvious triggers.
To help maintain stable claim ratios, the OJK is urging insurance companies to strengthen their comprehensive risk management frameworks. Several strategic steps are recommended to achieve this. These include implementing stricter underwriting processes, particularly in sectors highly vulnerable to layoffs, and adjusting premiums to accurately reflect current risk profiles. Moreover, fostering robust risk-sharing schemes with banks is crucial to ensure that credit disbursement remains prudent and sustainable.
Additionally, enhancing claim verification processes and demanding more rigorous evidence of insurability are vital steps to mitigate potential moral hazard. These measures should be complemented by increased data integration with banking institutions. This integrated approach will allow for earlier and more accurate monitoring of debtor credit quality, enabling timely interventions and safeguarding the financial health of both the insurance and banking sectors.
Kemnaker’s data specifically on participants in the JKP program reveals that 15,425 workers were affected by layoffs from January to April 2026. The largest wave of layoffs occurred in February 2026, impacting 6,610 workers. The monthly breakdown is as follows:
- January: 5,424 individuals
- February: 6,610 individuals
- March: 2,863 individuals
- April: 528 individuals
Geographically, West Java recorded the highest number of layoffs, with 3,339 workers affected, accounting for approximately 21.6% of the national total. Conversely, Kemnaker also noted provinces with relatively small numbers of layoffs, including Aceh (9 individuals), North Maluku (6 individuals), West Papua (5 individuals), and Gorontalo (3 individuals).
It is important to note that these figures encompass only those workers classified as participants in the JKP program. The data does not include individuals not registered with JKP, nor does it account for those not covered under Government Regulation (PP) No. 6/2025 and Minister of Manpower Regulation (Permenaker) No. 2/2025. Furthermore, workers who resigned, retired, suffered total permanent disability, or passed away are excluded from these layoff statistics, ensuring a focused representation of job termination impacts.
Summary
Indonesia’s Financial Services Authority (OJK) has reported a significant surge in layoff-related claims filed with BPJS Ketenagakerjaan, affecting 15,425 workers from January to April. This increase has directly impacted Old Age Security (JHT) claims, which rose by 14.1% year-on-year in March, and Job Loss Security (JKP) claims, soaring by 91% in the same period, partly due to relaxed requirements. The heightened utilization of these social security programs underscores the current economic pressures faced by the workforce.
The OJK is promoting prudent management of social security funds to ensure their long-term viability. This layoff trend also threatens the broader insurance industry’s asset quality and premium growth, particularly in credit and credit life insurance, due to increased default risks. To address these challenges, the OJK urges insurance companies to strengthen risk management frameworks, including stricter underwriting, adjusted premiums, risk-sharing with banks, and enhanced claim verification processes.
