Document Type : Original Research Paper

Authors

• Davar Mohammadi ¹
• Sasan Mehrani ²
• Gholamreza Soleymani Amiri ³
• Asma Hamzeh ⁴

¹ Faculty Member, Department of Accounting, Payame Noor University, Tehran, Iran

² Department of Accounting, College of Management, University of Tehran, Tehran, Iran

³ Accounting dpt, Alzahra University, Tehran, iran

⁴ Faculty Member, Department of Emerging Insurance Technologies, Insurance Research Center (IRC), Tehran, Iran

Abstract

BACKGROUND AND OBJECTIVES: Disclosure and transparency are fundamental pillars of corporate governance in the insurance industry, playing a critical role in reducing information asymmetry and building public trust (Bushman & Smith, 2003). In Iran, despite Regulation No. 88 (2014), a significant gap persists between formal disclosure mandates and effective, trust-building transparency. Previous studies have narrowly focused on quantitative financial disclosure, neglecting institutional, behavioral, and technological dimensions. The absence of an indigenous, multi-dimensional measurement model for Iran's insurance industry constitutes a key research gap. This study pursues two objectives: (1) designing and validating an indigenous, multi-dimensional model for measuring disclosure and transparency in the Iranian insurance industry, and (2) explaining the structural relationships among its dimensions using a sequential exploratory mixed-method design.
METHODS: A sequential exploratory mixed-method approach (Creswell & Plano Clark, 2018) was employed. In the qualitative phase, purposive and snowball sampling selected 12 insurance experts (average 17 years' experience). Semi-structured interviews, designed around seven axes of the initial conceptual model, continued until theoretical saturation (Saunders et al., 2018). Thematic analysis (Braun & Clarke, 2006) using MAXQDA 2020 proceeded through open, axial, and selective coding, yielding 114 open codes, 23 axial categories, and five main themes. Coding reliability was confirmed via Cohen's Kappa (κ = 0.84). In the quantitative phase, a researcher-made 51-item questionnaire, grounded in qualitative findings and measured on a five-point Likert scale, was developed and validated by five experts. The questionnaire was distributed electronically across 25 insurance companies. After iterative purification—removing items with factor loadings below 0.70 and high cross-loadings—the final model comprised nine constructs and 36 items from 108 valid responses. Data were analyzed using PLS-SEM with SmartPLS 4 (Hair et al., 2019), assessing composite reliability (CR), convergent validity (AVE), and discriminant validity (Fornell-Larcker criterion). Hypothesis testing used bootstrapping (5,000 subsamples) at the individual level (n=108); company rankings included 16 companies with at least three respondents (ranging 4–11 responses per company).
FINDINGS: Qualitative findings revealed five main themes: (1) Weak regulatory and executive infrastructures—implementation gaps, inadequate information quality, and lack of integrated systems; (2) Corporate governance and accountability gap—divergence between formal structures and actual performance, lack of committee independence, and ownership opacity; (3) Content and substantive disclosure limitations—quantification bias, ESG reporting neglect, and short-termism; (4) Lack of social capital and incentive mechanisms—low professional ethics (20–30%), weak stakeholder demand, and inadequate motivational systems; and (5) Digital void and resistance to innovation—cultural resistance, fragmented information systems, and shortage of specialized human resources. Quantitative results confirmed nine constructs: Corporate Governance (9 items), Voluntary Non-Financial Disclosure (3 items), Digital Maturity (6 items), Technological Disclosure (2 items), Financial Disclosure (2 items), Insurance Information Disclosure (3 items), Digital Customer Experience (2 items), Trust (5 items), and Policyholder Legitimacy/Satisfaction (4 items). All constructs showed satisfactory CR (0.795–0.944) and AVE (0.604–0.849). Discriminant validity was confirmed via the Fornell-Larcker criterion. The model explained 47% of variance in Digital Customer Experience, 30% in Trust, and 63% in Legitimacy/Satisfaction. Of eight hypotheses, four were supported: Corporate Governance (β = 0.281, p < 0.05) and Voluntary Non-Financial Disclosure (β = 0.257, p < 0.05) positively impact Digital Customer Experience; Digital Customer Experience positively impacts Trust (β = 0.545, p < 0.01); and Trust positively impacts Policyholder Legitimacy/Satisfaction (β = 0.793, p < 0.01). Four hypotheses—Digital Maturity, Insurance Information Disclosure, Technological Disclosure, and Financial Disclosure—showed no significant impact. Company rankings placed Khawarmianeh (M = 0.797) and Parsian (M = 0.751) highest, and Moallem (M = −0.692) and Mellat (M = −0.515) lowest. Trust–Legitimacy correlation was strongest (r = 0.922).
CONCLUSION: This study presents the first indigenous, multi-dimensional measurement model for disclosure and transparency in Iran's insurance industry, integrating institutional, governance, behavioral, and technological dimensions. Digital Customer Experience emerges as a novel mediating mechanism linking governance and voluntary disclosure to trust and legitimacy. The gap between formal and effective transparency provides a framework for understanding transparency challenges in developing economies. Practically, findings equip the Central Insurance of Iran with evidence-based tools for revising regulations (e.g., Regulation No. 88), designing a national transparency dashboard, and shifting toward effectiveness-oriented supervision. For managers, priorities include strengthening substantive governance, developing voluntary ESG disclosure strategies, and investing in digital customer experience as the primary pathway to trust and legitimacy. Limitations—internal stakeholder focus, cross-sectional design, and context-specificity—suggest future research replicating the model with policyholders, conducting longitudinal studies, and undertaking comparative analyses with other emerging markets.

Keywords

• Corporate Governance
• Digital Customer Experience
• Disclosure and Transparency
• Indigenous Model
• Iran's Insurance Industry
• Trust

Main Subjects

• Corporate Governance in Insurance Companies