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Indian insurance governance: evolutionary trends and signs of convergence

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  • Barkha Goyal
  • Rachita Gulati

Abstract

The paper examines the evolution of corporate governance practices within the Indian insurance industry from 2014 to 2021, focusing on β-and σ-convergence. A corporate governance index and its three sub-indices focusing on board effectiveness, audit function, and risk management are constructed using the principal component analysis. Convergence phenomena are analysed using the dynamic panel two-step system generalised method of moments (GMM) approach. Results indicate significant progress in governance quality, driven primarily by board practices and audit norms, though there remains ample potential for further improvement. β-and σ-convergence findings suggest that inadequately governed insurers are catching up with the better-governed insurers, particularly in board and audit governance. Further, the study divulges that non-life insurers need to put more effort into improving their governance structure. We recommend prioritising debt governance along with equity governance to control policy scams and improve the overall health of the Indian insurance market.

Suggested Citation

  • Barkha Goyal & Rachita Gulati, 2025. "Indian insurance governance: evolutionary trends and signs of convergence," International Journal of Corporate Governance, Inderscience Enterprises Ltd, vol. 15(4), pages 355-390.
    • Handle: RePEc:ids:ijcgov:v:15:y:2025:i:4:p:355-390
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