AIA Financial plans to spin off its Islamic insurance division into a new standalone entity for its AIA Shariah business, named PT AIA Syariah Insurance.

This aligns with an Indonesian regulatory mandate requiring all conventional insurers to separate their sharia units by the end of 2026, as reported by Finansial Bisnis.

The new entity began operations as a legal entity on 15 April 2026. It is currently seeking a shariah life insurance business licence from the regulator.

Once the separation becomes effective, the regulator must grant the necessary approvals. PT AIA Syariah Insurance will then assume responsibility for AIA Financial’s entire sharia portfolio.

AIA Financial secured shareholder approval and regulatory clearance from the OJK in September 2024 to proceed with the separation plan.

The company stated that the new structure will allow the business to operate independently. It will also help the business focus on meeting the rising demand for Islamic financial products in Indonesia.

The transition will not alter the rights or obligations of existing policyholders. Coverage terms and consumer protections remain unchanged under the new entity.

Under Indonesian corporate law, creditors have a 14-day window from the date of the announcement to submit written objections to the portfolio transfer.

If no objections are filed, the separation plan will proceed automatically.

Featured image credit: Edited by Fintech News Indonesia, based on image by freepik via Magnific