Enterprise risk management implementation challenges in the Indian insurance market

Sonjai Kumar, Purnima Rao and Munim K Barai
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Sonjai Kumar: Fortune Institute of International Business (FIIB), India
Purnima Rao: Fortune Institute of International Business, India
Munim K Barai: Ritsumeikan Center for Asia Pacific Studies, Japan

Journal of Risk Management in Financial Institutions, 2025, vol. 18, issue 4, 345-365

Abstract: This paper investigates the challenges in implementing enterprise risk management (ERM) in the Indian insurance sector. This is the first such study within the Indian insurance market, which is essential for risk management professionals, policy makers and regulators to understand these gaps and work towards addressing them. The Government of India has recently opened the Indian insurance sector for 100 per cent foreign direct investment, and this paper will be helpful for new investors in the Indian market. The research adopts a semi-structured interview-based approach to address the research problem under investigation. The respondents are primarily senior risk professionals in the Indian insurance industry. The paper identifies an inadequate understanding of the roles and responsibilities of the first and second line of defence. There are challenges in the quantification of non-financial risk as well as the availability of data for this purpose. There is inadequate risk training and a lack of standard risk language among the insurance companies. The authors recommend (based on the results of this paper) that the regulator and the Board of Insurance Companies should work together to address these gaps and make the Indian insurance sector more robust and resilient to manage future emerging risks. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.

Keywords: risk management; enterprise risk management; Indian insurance industry; Chief Risk Officer; risk culture; risk champion; risk identification; risk training; risk education (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2025
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