Syariah Spin-off Readiness Survey: Responses & Inferences

In Indonesia, in order to comply with Insurance Law 40 enacted in 2014, conventional insurance companies with a Syariah business unit are required to separate, or “spin off,” the entities no later than October 2024. In 2016, the Indonesian financial regulator clarified that instead of spinning off, insurers could transfer their in-force portfolio to an existing standalone Syariah insurer. To gauge the extent of insurers’ preparedness for spin-off, Milliman carried out a survey in Q4 2021 with the aim of identifying the key issues and challenges facing insurers. Results of this survey are summarised in this report, which reflects responses from 11 units, also referred to as “Syariah windows.” The survey captures the views of small to large-sized Syariah portfolios. All respondents were direct writers of life insurance business.