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This chapter discusses the essential components fundamental to the financial sustainability of the Indian insurance business, particularly in the context of strong risk management systems and sound accounting standards. Using the analytical tool Partial Least Squares Structural Equation Modelling (PLS-SEM), results from a large sample of 596 insurance professionals were analyzed to represent a sizeable proportion of the overall population of the industry (650). The paper carefully evaluates the interrelationships between the primary constructs: Enterprise Risk Management (ERM), which explores the range and effectiveness of risk transformation mechanisms; Financial Reporting Quality (FRQ), which considers the validation and transparency of financial statement preparation; Capital Adequacy (CA), which identifies the firm’s capacity or leeway in case of losses; and Operational efficiency (OE), which assesses the ability to minimize costs and increase profit. The present study utilizes a quantitative assessment of such interactions to provide actionable strategies for stakeholders in the Indian insurance sector, which may aid them in improving their long-term financial viability and responsiveness to varied market scenarios. They help the researchers gain a more precise insight into the success enablers in the Indian insurance sector.

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Determinants of Financial Sustainability in the Insurance Industry: A PLS-SEM Study on Risk Management and Accounting Practices

  • 章节

  • 发表日期：

    2026年

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  • Mohammad Talha,
  • Syed Mohammad Faisal,
  • Ahmad Khalid Khan

摘要

This chapter discusses the essential components fundamental to the financial sustainability of the Indian insurance business, particularly in the context of strong risk management systems and sound accounting standards. Using the analytical tool Partial Least Squares Structural Equation Modelling (PLS-SEM), results from a large sample of 596 insurance professionals were analyzed to represent a sizeable proportion of the overall population of the industry (650). The paper carefully evaluates the interrelationships between the primary constructs: Enterprise Risk Management (ERM), which explores the range and effectiveness of risk transformation mechanisms; Financial Reporting Quality (FRQ), which considers the validation and transparency of financial statement preparation; Capital Adequacy (CA), which identifies the firm’s capacity or leeway in case of losses; and Operational efficiency (OE), which assesses the ability to minimize costs and increase profit. The present study utilizes a quantitative assessment of such interactions to provide actionable strategies for stakeholders in the Indian insurance sector, which may aid them in improving their long-term financial viability and responsiveness to varied market scenarios. They help the researchers gain a more precise insight into the success enablers in the Indian insurance sector.