Indonesia Financial Group Cuts 12 Entities in State-Owned Enterprise Overhaul

Indonesia Financial Group (IFG) has significantly streamlined its structure, cutting 12 entities as part of a broader government program to simplify state-owned enterprises (BUMN). This move, as of July 2026, is part of IFG's transformation strategy, which prioritizes not only structural simplification but also a substantial improvement in the quality of investment management.

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The success of transformation is not only measured by the simplification of the company structure, but also by the improvement of investment management quality.

Danantara Dony Oskaria, Head of the BP BUMN (State-Owned Enterprises' Audit Board), emphasized that the success of this transformation is measured by both structural efficiency and enhanced investment governance. During a meeting with IFG's management, Oskaria highlighted that many past problems in the insurance industry stemmed from an imbalance between company liabilities and investment placements, leading to increased risk exposure.

"We are learning and mapping the problems that have occurred previously. One of the most frequent issues is misinvestment," Oskaria stated. He pointed to a significant imbalance where investment performance, especially in the property portfolio, has not kept pace with rising liabilities. This gap, he warned, could widen if not addressed promptly.

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We are learning and mapping the problems that have occurred previously. One of the most frequent issues is misinvestment.

IFG's transformation aims to establish a more disciplined investment management system, bolster risk management, and ensure that new insurance products are developed based on sound risk analysis. This strategic overhaul is intended to enhance the sustainability of the state-owned insurance industry and prevent the recurrence of past investment errors. President Prabowo Subianto previously noted that the overall BUMN streamlining program had already reduced approximately 250 entities, achieving cost efficiencies of around Rp50 trillion.

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I am worried the gap will widen because liabilities continue to increase, while there is a portfolio in property that has not generated sufficient margin to cover these obligations. This must be resolved quickly.