The Research Of EVA Balance Scorecard System Application On Performance Evaluation Of Property Insurance Companies

Along with the fast development of China Insurance and the accomplishment of, joint-stock system transformation of insurance companies, some disadvantages are found in domestic insurance companies, such as the irrational allocation of Capital, the weak solvency, "commission—agent" problem and so on. Property insurance, as a part of insurance industry, also has these problems mentioned above. Facing the hard market and the pressure of becoming one member of WTO, our property insurance companies have to complete the transformation from premium increasing type to management benefit increasing type. The performance evaluation is a very important part of company management. A good system of performance evaluation shall be a system process, a process of information management and a control process which can reflect company's performance and efficiency. Through feedback and controlling function of this system, companies can adjust their strategy of management. As the market of insurance is internationalized gradually, our insurance companies should follow the trend of market to establish and implement strategy of management. However, the effective way to implement that it is establish the new EVA and BSC indexes system to evaluate company's performance in a scientific way arid inspire proprietors.This paper analyzed amalgamation and complementarities of EVA and BSC system, compared cash flow financial indexes and conventional financial indexes, and then improved the EVA and BSC. It introduced the cash flow financial indexes to the finance aspect, to make up the disadvantages of the old one .Meanwhile, It discussed the EVA accounting adjustment items of property insurance, counted EVA of some property insurance company as an example based on it. Although it was rude, not precise, the train of thought is meaningful and enlightening .At last, this paper discussed the building of the new EVA and BSC in the performance assessment of property insurance corporation's angle .So this paper is composed by five parts as follows: The first part is an introduction:introduce the background of this thesis, the meaning and purpose of research, research methods of the thesis and so on.The second part is summary of performance evaluation and statement of the evaluation method of Chinese property insurance companies. This part is divided into three parts. They introduce performance and the meaning of performance evaluation, analyze its function, make a general introduction to evaluating methods, and analyze the existing problems and status quo of methods of insurance companies' performance evaluation.The third part has five sections. First, introduce EVA and BSC in details; analyze their keystone and advantage and disadvantages. Combining the introduction of BSC and EVA, explored the possibility of the combination and their complementary as well as EVA and BSC feature. Meanwhile, explored specific index of four aspects of cash flow financial indicators and the calculating method. To EVA and BSC system, made a brave improvement which integrate cash flow financial indicator into this system. And analyzed the new system's strategic cause and effect diagram. Analyzed the necessary and importance of the application of new EVA and BSC system in insurance company performance evaluation.The fourth part discussed the problem of EVA calculation in property insurance company in-depth, which is a key problem of this new system application on property insurance. Meanwhile, chose a property insurance company as an example to calculate the EVA, based on some assumptions. It showed the whole logic process and gave the EVA accounting adjustment items.The fifth part was divided into 3 sections:the steps and logic framework of the new EVA and BSC system indicators building, the four aspects logic relationship; It couldn't give a specific index system, because of inside details in a property insurance company unavailable .So this paper just gave a basic index reference system and described the meanings of these indicators and calculation methods .Then, it appointed some problems of the application on property insurance companies in ChinaThis paper probed into the following aspects:(1) to combine cash flow index with EVA and BSC system in order to compensate some shortcomings of the old assessment system, to discuss the applicability and necessity of its application on property insurance and how to building the index system (2) It probed the EVA calculation problem, how to understand the accounting adjustment items and to calculate the equity cost in property insurance company.There are some shortcomings in discussing EVA accounting adjusting items, due to limited study; It replaced the equity cost value with a rude value, because of the datum unavailable; it just gave a logic EVA calculation process of a property insurance company based of some hypothesizes, due to detailed financial datum unavailable; How to choose some appropriate cash flow financial indicators combined with the new EVA and BSC system is also a challenge.