Title: Indian insurance governance: evolutionary trends and signs of convergence

Authors: Barkha Goyal; Rachita Gulati

Addresses: Faculty of Finance and Economics, Delhi School of Business, New Delhi-110034, Delhi, India ' Asian Development Bank Institute, Kasumigaseki, Chiyoda, Tokyo-100-6008, Japan; Department of Humanities and Social Sciences, Indian Institute of Technology Roorkee, Roorkee-247667, Uttarakhand, India

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.

Keywords: audit function; board effectiveness; β- and σ-convergence; corporate governance index; Indian insurers; risk management; system GMM.

DOI: 10.1504/IJCG.2025.149636

International Journal of Corporate Governance, 2025 Vol.15 No.4, pp.355 - 390

Received: 02 Dec 2024
Accepted: 26 Aug 2025
Published online: 07 Nov 2025 *

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