Research On Interior Control Management System Of A Property Insurance Company

After China entering WTO, as the entry of foreign funded property insurance companies and the increase of domestic funded operation subjects, the step of insurance business operation of China is becoming faster and faster and the competition is also becoming fiercer and fiercer. For expanding their business, the insurance companies spare no effort, so that the blind competition is obvious. More companies pay more attention to scale and less attention to benefit, which further shrinks the profit margin of insurance companies. The change of situation makes insurance companies face an increasing risk and forces them to pay unprecedented attention to interior control. Insurance companies need to make practical research on methods and approaches of risk prevention, actively prevent and settle risks from all aspects.The paper puts its focus on the auto insurance business of A Property Insurance Company. Through combining practical and current common interior control theory of insurance industry, the paper analyses every aspect, section and system of the auto insurance business of A Property Insurance Company, redesigns interior control management system of A Property Insurance Company, which strengthens the risk prevention of insurance companies and improves the core competition of insurance companies.Chapter 1 of the paper first gives a simple review and sum-up of insurance industry of China, which affirms the achievements of insurance industry and the contribution of insurance industry to the society and people's livelihood of China. The paper points out that as the enhancement of Chinese national strength and development of Chinese economy and society, the influence and acting force of insurance companies have increased greatly and the effect of insurance is more and more outstanding, therefore, the future development space of insurance industry is huge. The paper also points out the dialectic relation between interior control and development and the importance of paying attention to risk control and prevention in the process of rapid development. Through considering the problems happen in insurance market operation at home and abroad, the paper points out that interior control is the only way for the development of insurance companies. Through examples, the paper points out that"rapid expansion, problem of mandatory administration, fraud, insufficient reserve fund, overdependency of reinsurance, problem of expanding new market, and ill integration management"are the bad results of deficient or ill interior control. The paper points out that interior control and development are in causal relation, rather than relation of opposition. Interior control will not prevent the development of insurance companies; on the opposite, it accelerates the healthy and rational development of insurance companies.Through reviewing development theory of interior control, the paper gives an intensive explanation and description of interior control concepts. The paper also gives an intensive description of the four evolution phases of interior control theory and concept. Starting from simplicity to complexity and from superficialness to theory construction, interior control construction gradually forms a whole set of complete and routinized interior control system. Currently, domestic banking business has approved and reached consensus on interior control, People's Bank of China and Insurance Regulatory Commission have unveiled guidance and detail regulations on interior control in succession, which lead the development orientation of interior control of insurance industry.Chapter 2 of the paper analyses the status quo of interior control management of insurance companies by taking A Property Insurance Company as an example. The paper points out the existing problems of A Property Insurance Company through focusing on the practical situation of the company. The problems are"Worse policy implementation, failure to comply with regulations, unprofessional operation; weak power of interior control department, ill exertion of internal audit effect; neglect of the importance of development and management; and singleness of formalistic check mode; especially the lack of interior evaluation and the singleness of evaluation index". The said problems are root causes for zero exertion effect of interior control. The chapter theoretically demonstrates the necessity of applying interior control management of A Property Insurance Company, and points out that interior control is the most effective method for enterprise management. Through the bankruptcy of Giant Group, Zhengzhou Yaxiya, the bankruptcy of Qiongminyuan and Yinguangsha which are listed companies, and bankruptcy of Enron and Baring Bank which are foreign companies, the paper points out that it is the failure of interior control that causes the enterprises fall into the crisis which results in bankruptcy. The cases remind us that it is necessary to integrate interior control to enterprise management and make it control enterprise operation. The paper amplifies the function of interior control and distinctiveness of insurance companies and points out the"can"and"cannot"of interior control. The paper points out that interior control cannot solve everything, but it is an indispensable part of interior management for an enterprise, which is determined by the distinctiveness of insurance companies.Through the discussion of the said two chapters, the writer points out that the interior control system of A Property Insurance Company must be redesigned. The paper theoretically defines the objective and principle of interior control management of A Property Insurance Company by referring to current popular international interior control theories. The paper points out that the objective of interior control shall be in conformity with the general objective of the company and the objective of interior control system shall contribute to the realization of the general objective of the organization, which mean that the objective of interior control shall be designed around the development of company. Interior control principles include four aspects: comprehensiveness, prudence, efficiency, and independence, which are also the common international principles. The ultimate goal of them is to promote the compliant operation and orderly development of insurance companies.The paper shows the type of interior control of A Property Insurance Company in direct form of table and draws a complete framework of interior control, which is clear at a glance for readers. Through flow chart, the paper points out risk points, control methods and responsible persons, explains and elaborates how to do interior control in every section. Through table and flow chart, the paper directly describes and designs detail operation business of the company. A Property Insurance Company interior control design project involves every phases and aspects of auto insurance. Through the proof of example, the company penetrates interior control into every aspect of auto insurance. By taking both manual control and information technology methods, the company solidifies interior control program into every strip line and aspect of business operation, reduces manual intervene and avoids artificial regulation. Effect of interior control exists in every phase of a business, including start, development and complete conclusion, so that the interior control is implemented. Especially the risk warning and forecast system, which is set up and shows forward-looking and offers guidance to business operation. The company builds compliant enterprise culture atmosphere with great efforts, consolidates the understanding of interior control inwardly and emphasizes"People Foremost". The company maintains the implementation of interior control through necessary supervision mechanism and necessary system of rewards and penalties.The key of establishment and implementation of a system lies in its vitality and implementation efficiency, which need scientific argumentation. For this purpose, Chapter 4 of the paper puts its emphasis on the establishment of evaluation system for interior control. The paper theoretically elaborates the connotation, concept and principle of interior control, and elaborates the necessity of establishing evaluation system for interior control. The paper points out that the evaluation system is not a candle to the sun, but an embodiment of Scientific Outlook on Development According to common international evaluation methods, the paper suggests the evaluation shall be applied in the following three aspects: soundness, rationality and efficiency. The main content of interior control evaluation includes five aspects, which are environment control, risk identification and evaluation, control action, information & communication and supervision. What is more important, the establishment of index system for interior control makes evaluation has regulations to abide by and have evidences to check. Evaluation index covers every aspect of interior control construction, materializes itself and determines whether or not interior control is rational or needs improvements through scores. Evaluation gives vitality to interior control construction and extends its life force. Through the comparison of current and old evaluation system for interior control, the paper proves the scientificity and expansibility of current interior control system.In conclusion, though the paper takes the interior control construction of A Property Insurance Company as an example, the construction of interior control system can be used as a reference in the whole insurance industry, especially the establishment of interior control evaluation system, which accelerates and further perfects the regeneration and continuation of interior control construction. Currently, mortgage crisis in the U.S. triggers global financial storm, which greatly changes international and domestic macro environment; therefore, insurance companies must strengthen inside construction and pay more attention to the construction of interior control system. Only by doing so can the insurance companies survive in the economic tide, better serve the society and make contributions to the creation of harmonious society.