Design And Implementation Of The Operational Early Warning System In Anhua Agricultural Insurance Company

Operational Early Warning System is an important part of IT system in Anhua Agricultural Insurance Company. It covers agriculture business and detailed financial data, scientifically reflects operational performance of branch companies and offices, collects good and bad operational data from branches, and accordingly generates operational management efficiency, so as to provide supervision function. It alerts the headquarters of dangerous index progress, so as to prevent operational risks from both business and financial point of view.There are three principles of index evaluation. First, profit orientation, referring to standard supervision index published by China Insurance Regulatory Committee for property insurance business, guided by differentiation and standardized management, set up index of both insurance products and branches. Second, figure up index and profits according to the standards of public companies, focus on operant function, weigh index in an actual manner. Third, reflect different operational results, elaborate responsibilities, clarify reward and punishment.Our management system is composed of different layers. The operational early warning system supervises and warns not only single index of second layer branches and third layer branches but also index of different insurance products, from motor business, non-motor business and short term casualty business. The system collects Key Performance Indicator (KPI) such as combined loss ratio, commission rate, combined expense rate, premium growth rate and loss estimation deviation. The system adopts state classification and divides each index into excellent, healthy, abnormal and dangerous state, marked noticeably with different colors and different scores, generating the final results and rankings of branches.This paper focuses on developing the way in which Early Warning System operates, including component models, relative indicator collections, branch rankings and webpage designs. How to determine dangerous indicator and how to confirm branch rankings are difficult parts. A scientific selection of indicators, different score settings according to different status of same indicator and weigh allocations to different indicators are crucial to branch rankings, which is also a good presentation of risks in operations.The weighing of indicators needs to be improved in this system. To much emphasis on indicators may drive branches loss main operation direction. However, for small and medium size companies, the system is able to match up with their basic systems and engage modern management process into practice. It also produces good results on branch managing operations. This paper could be treated as an important step towards centralization management for insurance companies.