Economic Value Added In The Use Of An Insurance Company

The article creatively introduced the concepts of Economic Value Added (EVA) Evaluation System and Venture Capital to solve out the malpractice in the current evaluation system after analyzing the defect of the gross-profit-based evaluation system of a certain insurance company. The Economic Value Added Evaluation System can lead the branch offices to put more emphasis on the Cost of Capital and operation risk so as to make the core value of the corporation and create more EVA.First of all, the article expatiates the background of EVA theory and the transformation of current evaluation system. Then it introduces the calculation method of EVA. By referring to the success examples of other companies, the article further puts forward the detail assumption and implementary procedures of EVA system for branch offices and product lines. It describes the "Five Year Plan" of EVA system so as to effectively combine the evaluation guideline with the operation objectives, set EVA as an important management instrument and realize the systematic change of management concept.