Property Insurance Company's Financial Management

Financing management is the core of business administration and the success or failure of financing management exerts direct influence on the very survival and development of an enterprise. Over the last decade has witnessed the rapid development within the domain of the insurance industry in China. The operation scale has been expanded drastically and the industry structure has been transformed from the exclusive business dealing under the simplex planned economy system into the trisection market economic systematic pattern featuring state-owned share-control, overseas investment and civilian business dealing. Simultaneously, The insurance industry in our country is still a rising industry at present, resulting in a relatively wide gap between the overall industry operation scale together with its payoff ability and overseas advanced insurance industry.Proceeding with the financing management of the property insurance company, this article plans to elucidate the gap from a profile so as to explore a developmental way to boost the national insurance industry.The author deems that the three deficiencies exist in the aspect of the financing management regarding our property insurance industry. First, the index for evaluating company's operation status is under-reasonable and secondly, some effective measures have not been taken to reorganize and manage the inner resource of the company. Thirdly, the valid prompting system has not been established as yet.For this, on the basis of analyzing the financing status of the property insurance industry, this article defines that the dealing aim of the property insurance company lies in realization of the maximum in terms of its value and that "EVA" , namely Economy Value-Added, is the index which is able to exactly reflect and measure the company's value. Owing to the fact that the appraisal analyzing method bears the distinct predominance over the other appraisal methods for outstanding performances, this article further puts forward that "EVA" (Economy Value-Added), a relatively new appraisal analyzing method for the insurance company, should be introduced into the financing management of the property insurance company so as to introduce a concept of capital cost.On the basis of establishing the property insurance company"EVA" calculation formula, researching the economic capital of the insurance company and adopting cases to concretely work out "EVA" index, aimed at the existing problems in business dealing of the property insurance company, through setting up the "EVA" outstanding performance evaluation system of the property insurance company, adopting the different checking modes, this article requires to make use of "EVA" analyzing method to weigh the actual outstanding performance of the management level of the property insurance company and each operation unit, to weigh the salary prompting plan based upon the "EVA" of establishing each function departments and the insurance company, and to truly inject the funds of an enterprise into the agencies and operation unit which create "producing value" for the purpose of controlling investing scale and improving the capital configuration efficiency, meanwhile stressing the coalescence between scale expansion and improvement of benefit. On the other hand, integrating supporting the excellent operation with eliminating bad operation, this article claims to fetch the insurance kinds which have benefits substantially. At the same time, the insurance company will make use of the operation personnel, particularly, the agents at management level and grassroots level as the first working spot concerning the actual status which Stuate envisioned to combine the dividend bank and the insurance company.The author further think that for those domestic insurance companies, to further elevate the economic benefit of the company, the financing management level should be improved and that in terms of advancing the overall financing managerial level, it, however, is insufficient by far to proceed with high level strategic management alone. The economic benefit of the insurance company is based upon dealing performance of each branch agency and the payoff ability of the grassroots insurance companies determine the dealing benefit of the head office. Also, the financing management level of the grassroots companies will have an enormous impact on the payoff ability of the grassroots companies. Nevertheless, the domestic insurance companies have universal inadequacies on the issue of the financing management of the grassroots dealing agencies.Therefore, this article, based on the general analysis and common usage, embarks upon analyzing the existing inadequacies in the dealing management of the Chinese People Insurance Company Guiyang Branch and puts "EVA" , which is the analyzing method never adopted by the company, into use of practicality of the Chinese People Property Insurance Company Guiyang Branch, calculating the "EVA" index of Guiyang Branch, analyzing the existing problems, establishing the inner performance checking system of the EVA, exploring and improving the grassroots financing management level of the Chinese Asset Property Insurance Company so as to boost the dealing management level of the grassroots company and increase approach to dealing benefit.Like any methods, there are inadequacies and limitations in"EVA" . It unduly regards the past financing indexes such as marginprofit, asset transformation, capital cost and the capital level of an investing enterprise as its appraisal gist, failing to fully consider the exertion of non-financing indexes. Meanwhile, "EVA" , too, meets with quite a few difficulties when putting into practical use, such as the adjustment items of "EVA" reaching as many as one hundred and sixty-four items.The number of the most common adjustment items has also reached as many as seven items. Such problems include: whether adjustment can correct the contorted financial-accounting information or not; whether the adjusted result can lead to another distortion of the enterprise value; that the capital cost WACC is confirmed exactly is relatively difficult; "EVA" evaluates performances from the angle of shareholders, without fully pondering over the other persons referring to benefit, for example, such issue as a creditor's benefit and so on. All of these remain to be groped further and perfected in the process of research and practice in days to come.