Enterprise risk management implementation challenges in the Indian insurance market
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/.
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Author's Biography
Sonjai Kumar Dr Sonjai Kumar is a seasoned risk management professional with over 30 years’ experience in actuarial science and risk management in the insurance industry. He is a Consulting Partner at Tata Consultancy Services in the banking, financial services and insurance (BFSI) sector and has helped insurance companies develop risk management functions from scratch. His PhD research on enterprise risk management in the Indian insurance sector is the first of its kind. He has written over 100 research articles and papers as well as being a reviewer for international journals. Sonjai is a Certified Fellow Member of the Institute of Risk Management, UK.
Purnima Rao Dr Purnima Rao is a finance professor with 15 years’ teaching experience in risk management, credit risk, interest rate risk, corporate finance, advanced corporate finance, business valuation, stock market operations and project appraisal. She has supervised many PhD students and is currently the full-time PhD Chair at Fortune Institute of International Business, New Delhi. She is also Chair of PGDM Financial Management and co-chairs the Alumni Department. Purnima holds editorial positions at reputed journals and is a reviewer for many international journals.
Munim K Barai Dr Munim Kumar Barai is Professor of Finance at the Graduate School of Management (associated to Advance Collegiate Schools of Business [AACSB] and AMBA accredited), Ritsumeikan Asia Pacific University (APU), Japan. He also holds the position of Director at the Ritsumeikan Centre for Asia Pacific Studies (RCAPS) at APU. Munim obtained his Master’s, 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. Munim has published three edited books with Palgrave Macmillan, Singapore.
Citation
Kumar, Sonjai, Rao, Purnima and Barai, Munim K (2025, September 1). Enterprise risk management implementation challenges in the Indian insurance market. In the Journal of Risk Management in Financial Institutions, Volume 18, Issue 4. https://doi.org/10.69554/IQFI3994.
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