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This chapter explores the influence of the banking and insurance sectors on the economic growth of Czechia, a nation with unique financial dynamics ideal for this study. Our aim is to ascertain the contribution of these financial institutions to economic growth, addressing the divergence in empirical findings that have marked this research area for decades. We scrutinise the impact of various factors, including sectoral development and the efficiency and stability of these institutions, all within the Czech context. Utilising the Granger causality test, we assess the role of several indicators related to the development of the banking and insurance sectors. Our findings reveal that in Czechia, the evolution and operational efficiency of these financial institutions significantly drive economic growth. This study provides an in-depth understanding of the role these sectors play in the Czech economic landscape, affirming their crucial contribution to the nation's economic prosperity.

The purpose of this paper is to assess the current legal framework on money laundering control in the insurance sector. Essentially, this examination is premised on the interrogation of whether it is still appropriate for Mauritius to apply such stringent, opaque and unyielding Anti-Money Laundering/Combating Financing of Terrorism norms and rules on general insurance when developed nations such as the UK and Singapore have done away with them for a more effective combat against money laundering. It would also be assessed why the financial services commission (FSC) is not able to draw inspiration from its British and Singaporean counterparts in fighting money laundering more effectively.

This paper uses the doctrinal legal research methodology which is colloquially described as “black-letter law” approach. It is backed up by a contextual legal analysis that is based on an analysis of relevant legal provisions. It relies ground experience from the insurance industry through the experience of the authors. A comparative approach is used with Singapore and the UK as case studies given that there are significant commonalities to the Mauritian jurisdiction as well as useful differences.

It is observed that a move towards a de-regulation of the legal framework on money laundering in the insurance sector with a more relaxed approach is more effective for the Mauritian insurance sector. Evidence is drawn from the Singaporean and British models. A re-structuring of the FSC of Mauritius is also warranted for such an approach to be adopted.

This paper is among the first academic contribution that proposes a de-regulation and the adoption of a relaxed approach of and by the Mauritian Insurance Industry for a more effective combat against money laundering. It serves as a legal foundational basis for further research in this direction.

The objective of writing this case study is to allow management students to engage with the complexities of mergers and acquisitions (M&As) in the insurance sector in an emerging economy like India. Upon completion of this case study, the students will be able to critically evaluate the business environment of the insurance sector of a developing economy like India, analyse the impact of M&As on the insurance industry of India, appraise the post-merger consequences and strategies to deal with these consequences, assess the applicability of market power and growth theories in the context of M&As and develop a strategic action plan for handling post-merger challenges.

On 3 September 2021, the Insurance Regulatory and Development Authority of India (IRDAI) approved the “Scheme” related to the merger of the non-life insurance division of Bharti AXA General Insurance Company Limited (“Bharti AXA”) with ICICI Lombard General Insurance Company Limited (“ICICI Lombard”). Earlier, on 21 August 2020, the boards of the companies had approved entering into definitive agreements through a scheme of arrangement. The merger received approvals from different regulatory bodies as mandated (Gandhi et al., 2023). Bhargav Dasgupta, managing director and Chief Executive Officer of ICICI Lombard, stated, “This is a landmark step in the journey of ICICI Lombard, and we are confident that this transaction would be value accretive for our shareholders” (FE Bureau, 2020). However, the merger posed a dilemma for Dasgupta and the management regarding crop insurance owing to its impact on profitability. Crop insurance historically had high claim ratios nearing 135% for ICICI Lombard for financial year 2018. The company ceased to underwrite this product from 2019 onwards (TNN, 2019). However, ICICI Lombard had to fulfil the three-year commitment made by Bharti AXA to the state governments of Maharashtra and Karnataka towards crop insurance. It was a scheme initiated by the Government of India, covering farmers against losses due to cyclonic rains, rainfall deficits and other unforeseen calamities. Dasgupta faced a challenge in managing the interests of the farmers and the company’s shareholders while balancing profitability, which had already been impacted by the COVID-19 pandemic. This case study delves into post-merger complexities in the financial sector non-life insurance industry in emerging countries like India.

This case study is suitable for undergraduate and post-graduate management students and executives from the insurance industry.

Teaching notes are available for educators only.

CSS 11: Strategy.

Purpose: This chapter is based on risk management of the insurance sector with reinsurance as its linchpin. Such is the importance of the insurance sector that its risk management must be considered.

Need for the study: Risk management of various sectors is gaining much attention. The insurance sector, known to manage the risk of multiple sectors, also requires its own chance to be controlled with the same or even more intensity. Considering the importance of reinsurance coupled with the dependency of primary insurers on reinsurers and the absence of research on reinsurers, the need to conduct a comprehensive study on the topic is felt.

Methodology: It will be a conceptual chapter based on the rigorous literature on the topic integrated with the researcher’s insights to bring forth the framework of reinsurers for the readers.

Findings: It is found that insurers can themselves become the victims of the financial crisis in case they insure risks that surpass their economic boundaries. Not only this, the failure of insurance companies can have a ripple effect on the country’s economy. Therefore, insurers must possess financial resilience; to remain so, they need to have prudent management of the risk they are undertaking.

Practical implications: The study covers a relatively less researched area of reinsurance and hence has a vast scope of research in the future. The study would be helpful to stakeholders like regulators and primary insurers. It will unveil the paradigm of reinsurance and enlighten the stakeholders on how to use it effectively.

In the era of Industrial Revolution (IR) 4.0, the integration of digital technologies, automation and data-driven insights has generated a broad wave of transformation across all industries, including the insurance sector. The study focuses on determining how the adoption of these technologies (InsurTech) is changing the life insurance industry, ultimately enhancing the level of customer satisfaction.

The data analysis has been performed with 304 useable responses from the policyholders of life insurance in the north-west region of India. The methodology adopted for this study is partial least squares (PLS) structural equation modeling (SEM). To investigate the predictive relevance of customer satisfaction, the PLS predict technique has been used. Also, importance performance map analysis (IPMA) has been applied to assess the important and performing dimensions of customer satisfaction.

The outcomes show that the adoption of InsurTech has a positive impact on customer satisfaction. Customer service management and policy management are among the strongest predictors of customer satisfaction, and the predictive relevance is reported to be moderate. IPMA results have suggested that improvements in online distribution of insurance services and customer service management lead to higher customer satisfaction.

The conceptual model can be tested with the moderating effect of different demographic factors (age, gender etc.), and future research can be done to analyze the mediating role of customer satisfaction between InsurTech adoption and customer loyalty.

The study offers valuable contributions to the marketing literature, shedding light on the influence of InsurTech adoption on customer satisfaction within the Indian life insurance sector. The research offers a practical approach that could help marketing professionals and policymakers comprehend the utilization of online insurance services, and this understanding can help industry experts to develop customer-oriented products and services.

This research is the first of its kind to test the association between InsurTech adoption and customer satisfaction in the life insurance sector in the Indian context. Research also provides novel insights for policymakers to enhance the satisfaction of customers towards using online insurance services in the near future in developing countries like India.

The purpose of this study is to measure the technical efficiency of 20 Algerian insurance companies from 2016 to 2020, by using slacks-based measure (slacks-based measure [SBM] data envelopment analysis [DEA]) model. This research aims to provide a comprehensive assessment of this companies' efficiency, taking into account both the desirable and undesirable outputs.

The study uses a nonoriented, SBM model with the assumption of constant returns to scale to estimate the technical efficiency of commercial insurance companies over a five-year period. The inputs used are labor expense, agent expense and investments, while the outputs included are gross premiums and investment income as desirable outputs and gross claims as undesirable output.

Among 20 insurance companies evaluated, only 5 companies consistently achieved technical efficiency during the study period (Caisse Nationale de Mutualité Agricole [CNMA], MACIR, CARDIF, MUTUALISTE and AGLIC); so they represent the best practices in the Algerian insurance sector, with overall average of the technical efficiency is 81%. However, the reference sets analysis showed that CNMA and AGLIC had high robustness. Also, the results demonstrate the impact of ignoring the undesirable outputs on the accuracy of the assessment.

The sample of the study consists of the active insurance companies in Algeria, based on the Annual Insurance Reports of Algeria; there are 20 companies as shown in the table. The data are taken from the annual reports of insurance companies during the 2020 period, issued by the Algerian Ministry of Finance.

The challenge for insurance company is how to find a balance between reducing claims paid and simultaneously improving the quality of insurance services. In fact, it is observed that studies evaluating their efficiency ignore claims in the analysis process. Therefore, the study highlights the importance of considering undesirable outputs within the DEA framework; this allows for a more accurate assessment of the company's performance and helps in improvement. Furthermore, although the insurance sector plays a crucial role, it has not received enough research attention compared to other financial sectors, especially in Arab and developing countries.

The literature on efficiency assessment in the insurance companies shows a lack of addressing undesirable outputs (such as claims) within the DEA framework; so this study aims at bridging this research gap. Also, the study provides an overview of the efficiency of Algerian insurance companies.

Following the United Kingdom's (UK) withdrawal from the European Union (EU), there is uncertainty in the financial services industry on equivalence of regulatory regimes. This also affects the insurance industry. As of now, it is not clear if the UK’s supervisory regime (“Solvency UK”) will be classified as equivalent to the European Solvency II supervisory regime. After no equivalence decision was taken during the Brexit transition period and there are efforts by the UK in the form of the UK Solvency II Review and the Financial Services and Markets Bill to adapt Solvency II more to the characteristics of the national insurance market, the uncertainties are intensified. Although Solvency II non-equivalence would have a significant impact on insurance groups operating in both the UK and the EU, there has been no detailed analysis of whether these initiatives could have an impact on a future Solvency II equivalence decision. The purpose of this paper is to address and close this research gap with a literature review and a subsequent equivalence mapping and discussion.

Based on the literature review methodology, this paper draws on academic sources as well as publications from governments and regulators, articles from consultancies and subject matter experts and uses this literature to provide an overview of the current state of research on equivalence in the wider financial services industry, but specifically on Solvency II equivalence, the UK Solvency II Review and the Financial Services and Markets Bill. Based on this literature review, the paper also forms the basis for an innovative and forward-looking Solvency II equivalence mapping and discussion.

Several articles state that differences between Solvency II and Solvency UK could harm a future Solvency II equivalence decision. The UK Solvency II Review and the Financial Services and Markets Bill are two initiatives that support the objective of aligning the Solvency II supervisory regime more closely with the circumstances of the UK insurance market. Although both initiatives contribute to the fact that Solvency UK differs in parts from Solvency II, based on the literature review and the subsequent equivalence mapping and discussion, there are currently no reforms that should harm future Solvency II equivalence decisions.

This paper provides a previously non-existent overview of equivalence in the wider financial services industry, but specifically on Solvency II equivalence, the UK Solvency II Review and the Financial Services and Markets Bill, and brings them together in an innovative equivalence discussion. It thus presents the current state of knowledge on Solvency II after Brexit and develops it further around a mapping against the equivalence criteria. As non-equivalence could have significant implications for insurance groups operating in both the UK and the EU, this paper is a useful and practical study that provides a previously non-existent equivalence mapping and discussion based on current initiatives and publications. It thus closes the research gap identified and reduces uncertainties in the insurance industry and can be used as a blueprint for detailed and forward-looking equivalence mappings and discussions for the wider financial services industry.

Conventional insurance creates a gap in the financial system across the world that manifests from the global financial and economic crisis. There is an increasing demand for insurance schemes that will bridge the gap of financial and economic crisis globally. More recently, there is an advocacy in Saudi Arabia for achieving Vision 2030 by various facets of human endeavours such as strengthening financial markets and boasting economic development. The purpose of this paper is to deeply explore policy and reinforcement of the legal framework of Islamic insurance as essential bedrocks in Islamic finance that are Shari’ah compliant to achieve Saudi Vision 2030 for overall sustainability of all spheres of human endeavours in the country.

Content analysis and systematic literature review are used as methodological approaches in this paper. There are various sources of accessing secondary data used in this study such as online peer review, journals and library-based sources. Through the exploration of various secondary data, five major themes were identified in this study, namely, policy, legal framework, Islamic insurance, Islamic finance and Saudi Vision 2030. Analysis of various themes were done systematically in this paper. The methodology provides theoretical and practical foundations for reinforcing policy and legal framework for Islamic insurance, specifically in Islamic finance to achieve Vision 2030 in Saudi Arabia. It is the policy and legal framework that can provide necessary dynamics for strengthening Islamic insurance in particular and Islamic finance in general towards attaining sustainable Vision 2030 in the country.

The paper demonstrated that policy period is explicitly associated with Islamic insurance, whereby Takaful insurance is regarded as policyholder rather than shareholder-oriented. Similarly, it is established that there is need to specifically mention the policy period and the nature of contract in Islamic insurance should not be limited to only mutual cooperation among the participants in connection with the losses but it should capture element of sharing income generated from investment between insurer and policyholders using predetermined ratio for such as provided with theoretical legal framework (Shari’ah) in connection with Islamic insurance model as an integral part of Islamic finance.

It will depart completely from conventional insurance where borrowing of funds and investment are put at fixed interest (Riba), uncertainty (Gharar) and speculative ideas (Maisir). Avoidance of different elements ascribed with conventional insurance would enable Saudi Arabia to strengthen financial system and boast economic development with an emphasis on an effective policy and efficient legal framework towards attaining Vision 2030 in the country.

The methodology provides theoretical and practical foundations for reinforcing policy and legal framework for Islamic insurance, specifically in Islamic finance to achieve Vision 2030 in Saudi Arabia.

Conventional insurance creates a gap in financial system across the world that manifests from the global financial and economic crisis. There is an increasing demand for insurance scheme that will bridge the gap of financial and economic crisis globally. More recently, there is an advocacy in Saudi Arabia for achieving Vision 2030 by various facets of human endeavours such as strengthening financial market and boasting economic development.

With this emphasis, it will depart completely from conventional insurance where borrowing of funds and investment are put at fixed interest (Riba), uncertainty (Gharar) and speculative ideas (Maisir). Avoidance of different elements ascribed with conventional insurance would enable Saudi Arabia to strengthen financial system and boast economic development with an emphasis on an effective policy and efficient legal framework towards attaining Vision 2030 in the country.

This study tests whether corporate social responsibility (CSR) performance is a predictor of the financial sector's financial stability (FS), with the moderation of a sustainability committee.

The sample covers financial sector firms included in the Thomson Reuters Eikon database. The analyses are based on 8,840 firm-year observations for the years between 2002 and 2019 and the country-firm-year fixed-effects (FE) regression analysis is executed.

The results reveal that CSR initiatives contribute to the financial sector's FS as a whole and the sector's three individual sub-sectors. This proven significant association holds for all sub-sectors, namely insurance, banking, and investment banking. Moreover, the moderation analysis reveals the prominent role of a sustainability committee in bridging CSR performance (CSRP) with FS.

The findings highlight that meeting societies' expectations pays back in the form of greater FS in the financial sector.

The findings suggest that CSR engagement helps the financial sector firms manage their risks and alleviates exposure to insolvency. This is because CSR performance promotes firms' accountability and transparency toward stakeholders. The results help motivate managers to pursue CSR goals more seriously to ensure FS. The moderation analysis implies that sustainability committees develop policies and practices to integrate the non-financial and financial goals of the firm.

Although prior studies have examined the link between CSR and financial performance (FP) in the financial sector, those studies have largely ignored FS in terms of risk-adjusted performance. Besides, prior studies have exclusively focused on the banking sector, but the authors concentrate on the banking, insurance, and investment banking sectors.

This study aims to explore the nexus between insurance penetration and economic development in Vietnam, one of the fastest-growing economies over the past two decades.

This study uses an updated data set of the insurance sector in Vietnam from 1996 to 2020. The autoregressive lagging distribution and cointegrating non-linear autoregressive lagging distribution (NARDL) models are used to explore the nexus between the insurance market development and economic growth.

This study confirms the unidirectional causality and positive impacts of insurance market development on economic growth both in the short and long term, supporting the “supply-leading” hypothesis. Nonlife insurance has more significant but slower impacts on contributing to economic development in the long run. From the NARDL approach, this study also discloses the asymmetric relationship between the insurance industry and economic growth. Aggregate and life insurance display short- and long-term asymmetric impacts, whereas nonlife insurance shows long-term asymmetry.

To the best of the authors’ knowledge, this is the first study to examine the hidden asymmetries of the insurance-growth nexus in Vietnam from non-linear models. Notwithstanding the theoretical contributions to the prior literature, several practical implications are proposed for insurance businesses, policymakers and investors.