Analysis Based Costing In Business Management In China's Insurance

With China's entry into WTO, China's insurance market is open to the world step by step. China's insurance market, which can be called the biggest, youngest and most potential market in the world, has great attraction for the foreign insurance companies. So China's insurance industry faces further fierce competition. What should China's insurance companies do to face the challenge and grasp the chance in the drastic competition becomes the primary question to be considered by the managers and scholars. The management of cost which is the important factor that affect the development and profits of the company, become the solution of the problem.However, the cost management of our country's insurance business enterprises has many questions. On the one hand, the diversification of insurance product and service need the cost assigns the each cost target according to the true occurrence level, but the traditional cost accounting method usually adopts the single allotment standard while assign overhead cost, it is easy to result in cost distort; On the other hand, China's insurance companies always are characterized as insurance fee focusing and quantity-adding focusing, ignoring internal management and quality-improvement. In the consequence, ignoring a appropriate ratio of cost-benefit, ignoring cost controlling in the operation, lacking of cost data and necessary cost managing skills always existed in the whole insurance industry. ABC (Activity-Based Costing) is a kind of advanced method of cost calculation and management. It can provide the objective, true and accurate cost information for the product and service. A lot of large-scale banks and financial institutions have used ABC to obtain great achievements and abundant experiences. So, it is significant to use ABC for insurance companies of our country, according to present situation.This paper is based on insurance, economics, accounting, and the...