Enterprise risk management in the insurance industry: Trends and future directions
Abstract
The research aims to describe the state of enterprise risk management (ERM) in the insurance sector. It highlights emerging trends in the application of risk management in the insurance sector and thereby reports the prominent research gaps and new avenues for research in ERM. The research adopts a systematic literature review (SLR) approach, using 187 research papers spanning 44 years (1977–2021). The paper identifies the fact that most ERM and insurance sector research is performed in North America and Europe, while developing economies in Asia and Africa lag. The paper establishes a three-way relationship between ERM, risk management (RM) and risk-based capital (RBC) where RM is a subset of ERM and RBC is a driver of ERM. The research shows that very few studies are conducted on risk culture, three lines of defence and the role of chief risk officers. The determinants of ERM identified are board, firm size, audit and risk management committee and corporate governance. The determinants identified for firm value are return on assets, return on equity, profit, Tobin's Q, among others. This research provides a way for academicians, practitioners and policy makers to design effective strategies for implementing ERM in organisations.
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Author's Biography
Sonjai Kumar is a risk management professional with over 25 years of experience in the insurance industry, actuarial science and risk management. He is a Consulting Partner in Tata Consultancy Service in Chief Risk Officers' initiatives. He is pursuing a PhD in enterprise risk management in the insurance sector in India at the Fortune Institute of International Business, New Delhi, India. He has published many research papers and articles in international forums and is also a reviewer for the International Risk Management journals.
Purnima Rao is a finance faculty member and is presently chairing the Post Graduate Diploma in Management–Financial Management and Fellow Program in Management programmes at the Fortune Institute of International Business, New Delhi, India. Dr Purnima has completed her doctorate in the area of small and medium enterprise financing. She has conducted and delivered many faculty development programmes and webinars for the growing and evolving academic fraternity. She holds editorial positions at journals of repute and is a reviewer for many international journals. Recently, she was awarded the title of the most influential professor by the World Education Congress.
Munim Barai holds the position of Professor of Finance at the Graduate School of Management (AACSB and AMBA accredited), Ritsumeikan Asia Pacific University (APU), Japan. He also holds the position of Director at the Ritsumeikan Center for Asia Pacific Studies (RCAPS) at APU. Dr Barai obtained his masters, MPhil and PhD from the Delhi School of Economics, University of Delhi, India. He was awarded a Fulbright Scholarship and conducted post-doctoral research at the University of Pennsylvania, USA. Professor Barai has published three edited books with Palgrave Macmillan, Singapore.
Citation
Kumar, Sonjai, Rao, Purnima and Barai, Munim (2024, March 1). Enterprise risk management in the insurance industry: Trends and future directions. In the Journal of Risk Management in Financial Institutions, Volume 17, Issue 2. https://doi.org/10.69554/UFMP5220.
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