As digital technologies and knowledge processes become increasingly central to organizational strategy, firms are required to translate these capabilities into effective governance and sustainability-oriented practices. In knowledge-intensive and highly regulated industries, understanding how such capabilities shape strategic outcomes remains a critical research challenge. This study aims to examine how artificial intelligence (AI) and knowledge management (KM) capabilities jointly enable insurance firms to develop governance strategies and environmental mechanisms that enhance financial resilience and drive green business transformation.
Grounded in dynamic capability theory (DCT), this study develops and empirically tests an integrated framework using data from 288 insurance firms based in the USA. The relationships among AI capabilities, KM capabilities, governance strategy, environmental strategy, financial resilience and green business transformation are examined using confirmatory factor analysis and Hayes’ PROCESS macro.
The findings demonstrate that AI and KM capabilities act as complementary dynamic capabilities that significantly strengthen governance and environmental strategies. These strategies in turn enhance financial resilience, which subsequently enables green business transformation. The results highlight how the integration of digital intelligence and knowledge processes supports the development of adaptive capabilities and strategic renewal.
This study offers practical guidance for insurance companies seeking to navigate complexity and pursue sustainable transformation in dynamic and highly regulated environments. By integrating governance and environmental strategies within a unified dynamic capabilities framework, this study provides new insights into how strategic intelligence can enable organizations to build resilience and drive green business transformation, particularly in process-intensive industries such as insurance. The findings further align with broader sustainability priorities, including SDG 9 and SDG 16, by emphasizing innovation-driven capabilities and transparent governance practices as key enablers of long-term organizational sustainability.
This study advances the KM literature by positioning AI and KM capabilities as complementary antecedents of governance and environmental strategies and by integrating these relationships with financial resilience and green business transformation within a unified DCT-based capability strategy resilience transformation framework.
