BUSINESS ETHICAL BEHAVIOR AS A CRITICAL FACTOR IN HR CHANGE TRANSFORMATIONAL MODELS IN THE INSURANCE INDUSTRY – THE CASE OF THE REPUBLIC OF NORTH MACEDONIA

Abstract

The insurance industry is in the continuous process of facing fundamental change, predominantly due to applying new technologies at diversified insurance portfolio, while still remaining heavily dependent on the potential of the human factor for advancing the business. Insurance managers are constantly attempting to implement changes at internal insurance processes, which derive from increased industry competitive pressure, regulation and evolving and modified customers’ needs, as well as from the tendency for increasing the importance of the human resources management (HRM). Organizational changes at insurance companies are struggling to impose more transparent and sustainable models of ethical behavior and particularly to increase the importance of insurance intermediaries, especially as their influence in overall insurance industry constantly rises. Moreover, the contemporary InsurTech models are extending the improved application of classical insurance business concepts and techniques and, therefore, revolutionizing and transforming the future of current insurance business models, according to the current internal and external challenges. In that regard, HRM needs to be systematically and carefully developed and oriented to specific consumers’ needs and expectations for achieving sustained competitive level, particularly while solving numerous insurance ethical constraints and challenges, in order to increase the transformative capacity of the insurance industry, as a whole. The insurance industry in the Republic of North Macedonia is achieving sustainable and relatively high growth. However, additional stimulus can be created by imposing and practicing advanced ethical business models, predominantly understood as a model for increased competitiveness and profitability, rather than as a formal regulative pre‐requisite. HR developmental models in the industry are weak and limited, whereas the interactions with distribution channels are quite poor. The absence of effective, executive and interactive ethical models at insurance companies, aimed at obtaining higher value from the insurance human capital management (HCM), is one of the critical factors for stimulating the industry’s sustainable growth and creation of higher insurance culture. This paper profoundly analyzes the contemporary HCM challenges and, in particular, emphasizes the transformative function of business ethical behavioral models in the modern insurance industry, in close inter‐dependence with the change management practices at insurance industry.

Keywords

• business ethics in transformational change
• hrmp (human resource management practices) and hcm (human capital management)
• insurance industry