Research On Financial Risk Internal Control Of Z Insurance Company

In the past three decades,China's insurance industry has made great progress thanks to China's huge and healthy market,but the ability of Chinese insurance companies to resist risks is still very fragile,and the level of financial risk management needs improving continually.The difference for an insurance company from a general enterprise lies in that what it operates and its product is risk.Sharing risk for the others also makes its own risk management more complex.Therefore,it is urgent to set up the reasonable risk range to ensure its own safety.Business operation is the most important part of the insurance company,which must be accompanied by the flow of funds.During the flow,the funds will possibly be lost more due to human reasons such as improper management in any process of the business operation.If so,it will certainly bring more financial risks to the company.Internal control is an important means for an enterprise in its risk management.Therefore,it is of practical significance to make up a better internal control based on lowering the probability of financial risk of insurance company taking it into a steering consideration.Taking Z Company as an example,this paper firstly analyzes its financial risk,the status quo of financial risk management and finds the key risk points including the presenting ways and some influencing factors of financial risk.Secondly,it finds the shortcomings in its internal control system after assessing the status quo of financial risk management from the point views of the five key elements of COSO internal control: internal environment,risk assessment,control activities,information exchange and supervision,which are as follows: structural establishment with its right and responsibility in control environment is not made so properly,together with the problem of high staff turnover;there are also some problems in its control activities such as payment of claims,save from damage and management service with one certificate not being carried out exactly,as well as weak management ability in expense and high payment as the agent for banks and post offices;the system of assessing financial risk not being so perfect;information linking in communication of financial risk not being so smooth;along with the supervision not being so strong.Finally,this dissertation puts forward some suggestions specially for improving the internal control system for Z Company:(1)To develop operational financial risk awareness;(2)To establish the effective implementation of financial controlling activities;(3)To complete the measuring system of financial risk;(4)To smooth the information link in communication;(5)To better the supervision mechanism.In conclusion,this dissertation is creative in some degree in that firstly it deals with the problems specially in insurance companies,while few researches have been found on insurance businesses themselves,especially their internal control systems though the research for financial risk and internal control at home and abroad are mature separately.Secondly,it finds that there are a lot of overlapping parts of the functions between the internal control and risk management and it is helpful to reduce the waste of business resources considering both of them together.Last but not the least,it is of some significance for insurance companies to improve its internal control capacity steered by solving the problems exposed in the departments doing with the financial risk.