Research On The Application Of Comprehensive Budget Management In Domestic Property Insurance Company

Since the establishment of the total budget management in General Electronic Corporation (GE), Dupont and General Motors Corporation (GM) in the 1920s, it has been the standard operating procedure for large industrial and commercial enterprises quite rapidly. Developing from the initial planning and coordination functions, the total budget management is now a management system that integrates such functions as control, stimulation and evaluation, and carries out business strategies in a total manner. It plays a central role in the internal control of an enterprise. There are so many monographs and theses available on total budget management research, yet they mainly aim at fields like manufacturing and business. Little research has been done on total budget management for insurance companies, especially for non-life insurance companies.According to the analysis of classical documents, this paper, firstly defines its research object, clarifies the meaning of total budget and total budget management, and discusses the theoretical basis of the total budget management, namely, the enterprise strategy management theory, the transaction cost theory and the principal-agent theory. Based on the exploration of the recent total budget management practice in domestic property insurance companies, this paper also discusses the background and significance for property insurance companies to carry out the total budget management urgently and introduces the present situation of the implementation of the total budget management. It points out property insurance companies' operating characteristics which, therefore, bring the unique characteristics of their total budget management. Meanwhile, it presents some main problems in practice. Finally, it proposes the overall framework for property insurance companies to bring the total budget management into effect on the base of practical analysis and approaches the subsequent controlling process.The theoretical basis of this paper is mainly the transaction cost theory and the principal-agent theory, and it applies the method of qualitative analysis combined with quantitative analysis, and that of induction combined with deduction. The innovation of the paper lies in the fact that it grasps the very weak point in domestic practice, establishes the total budget management framework suitable for property companies and studies its controlling process.