Analysis of the Impact of Spin-Off Policies on the Financial and Operational Performance of Sharia Life Insurance Companies in Indonesia

Abstract

The sharia life insurance industry in Indonesia has undergone a significant transformation since the enactment of the spin-off policy through Law Number 40 of 2014 concerning Insurance and POJK Number 11 of 2023 which requires Sharia Business Units (UUS) to separate from conventional parent companies. This study aims to analyze the impact of spin-off policies on the financial and operational performance of Islamic life insurance companies in Indonesia. The research method uses a quantitative approach with panel regression analysis and multiple linear regression on financial statement data for the 2017-2024 period from 29 sharia life insurance companies. Financial performance variables are measured through Return on Assets (ROA), Return on Equity (ROE), and asset growth, while operational performance is measured through gross contribution, operating expense, and revenue. The results of the study show that spin-off policies have a non-uniform impact on company performance. In the short term, spin-offs cause increased operational costs and pressure on efficiency due to the need to fulfill new capital, infrastructure, and human resources. However, in the medium to long term, companies that have good structural and managerial readiness are able to take advantage of the spin-off momentum to increase profitability and asset growth. Case studies on Allianz Life Syariah and Prudential Sharia Life Assurance confirm that internal company factors such as management strategy and resource readiness are more decisive for post-spin-off success than external factors. This research provides theoretical contributions in enriching the sharia economics literature related to the effectiveness of spin-off policies, as well as practical implications for regulators in refining supporting policies and for companies in designing adaptive strategies to face industry competition.