Brief Discussion On Application Of Activity-based Costing In Insurance Company

Following the globalization of our country’s financial market, insurance enterprises ofour country population has grown from62in2002to113in2011. In the fierce marketcompetition environment, reduce cost ceaselessly is the enterprise survival anddevelopment of one of the necessary ways. Cost is determined by fixed cost variable costand variable cost, reduce cost control is the key. Cost reduction process are not onlyprocess of the profit maximization, but also the process of the managementstandardization and rationalization, which makes the existence of enterprise value, andmake it become one of the core competitiveness of enterprises. With the insurancemarket’s competition and customers of insurance products and services timely andprofessional requirements of growth, the insurance industry’s business costs are rising, theprofit space is narrowing gradually, so how to effectively control the cost of the insurancecompany’s survival and development is one of the important topics.In this thesis, the activity-based costing system is a kind of advanced cost calculationand management system, with the cost as the cost allocation based on cost allocation,which is more scientific and objective, for the products and services to provide a more real,accurate and valuable cost information; it is merely a kind of calculating the cost ofproducts and services in the method, it is one kind of effective, continuous process of costmanagement, it not only can be used for cost control, but also can be used for theoperation and management of the company, such as the financial budget, the Department’sperformance evaluation, company strategy management. Therefore, the activity-basedcosting system in the insurance industry will have great value in application. According tothe characteristics of insurance business insurance company operation cost system,facilitate rational will indirect costs belonging to the corresponding products and servicesgo to increase the cost of the value of information, for enterprises management goalsetting to provide more valuable information, effectively improve the cost control andmanagement of the insurance company management level.The article first proposed the problems, and provides the corresponding solutions inthe insurance company the introduction of activity-based cost accounting system; secondly, introduces the basic principle of activity-based costing system, and discusses the operatingcosts of the system in our country’s insurance business to carry out the feasibility andnecessity of the. Then through the elaboration of the insurance enterprises of our country ’scost structure characteristics and illustrates how the insurance enterprise’s cost accountingsystem construction and design, and through the example, has carried on detailedexplanation. This article through activity-based costing in A insurance application. On theoperating cost and the strategic cost is discussed. Finally this paper, the operating costmethod in the insurance application problems and difficulties are discussed and thecorresponding solution.