The Research Of Analysis And Control Of Compensation Expense In Vehicle Insurance Of PICC

With the total resumption of insurance industry in the 80s of last century, a big progress has been made with 34% annual increase averagely. But in recent years, the competition in insurance industry becomes fierce which require to pace up the improvement in insurance products, market development and service. Currently the vehicle insurance is a major part, up to 60% of the total insurance industry. For some newly founded insurance companies, it is even up to 90% of its business. Therefore the vehicle insurance pillars the insurance industry. The business results of vehicle industry is directly related to the outcome of insurance industry. In this sense, vehicle insurance has become the indicator of total insurance industry.In recent years, vehicle insurance business in Chengdu has increased 40%, however, the vehicle insurance of the Chengdu Branch of PICC (CPICC called below) has got only 20% rise, with its market share dropping dramatically. In order to catch up, CPICC designs to improve its service, especially the compensation service. Based on its updated technology and talents, and wide service net, IPICC has made more investments in compensation service, intending to establish a responsive and high quality service system.However, the heavy investment does not result in a big change in its compensation service nor big increase in its business. So this thesis compares the vehicle industry in Chengdu including its development trends and compensation ratio as well as the running costs, expenses, profit trends and the difficulties and problems confronting vehicle industry. My focus will be given on the compensation structure, expenses in different sectors and how the expenses happen, and the expenses in labor, equipment in different compensation modes.Based on the analysis, I conclude that the investment in compensation service is inefficient and unreasonable, and propose ways and measures to solve the problem and control the expense so that a correspondent ratio will be established. As a result, expenses will be reduced and waste be cut. In the end, a low cost but high performance compensation system will be founded.