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The Process Approach in the Financial Management of Insurance Firms Cover

The Process Approach in the Financial Management of Insurance Firms

Foundations of Management
Volume 12 (2020): Issue 1 (January 2020)
By:   
Open Access
|Feb 2020
Figures & tables

Figures & Tables

Table 1

The stages of implementing process management (Source: Bitkowska, 2019)

AuthorStages of process management
(Talwar, 1993)

  • - defining the organization’s strategy,

  • - acquiring and developing such organizational competences and skills necessary for the effective implementation of strategy,

  • - designing basic processes that support the development and use of organizational competences,

  • - implementation of the process structure.

(Houy, Fettke and Loos, 2010)

  • - development of process management strategies,

  • - process definition and modelling,

  • - implementation of processes in the organization,

  • - realization of the implemented processes,

  • - monitoring and controlling the implementation of processes,

  • - process optimization and improvement.

(Rummler and Brache, 2010)

  • - strategy formulation,

  • - description and analysis of the current organization,

  • - description and analysis of currently running processes,

  • - preparing a map of processes and their measures,

  • - designing the organizational structure,

  • - preparing a description of each function in the structure,

  • - preparation of job descriptions,

  • - designing an employee effectiveness system for each position,

  • - introducing management processes.

Figure 1

The process architecture of insurance activity (Source: Gąsiorkiewicz, 2019)

Figure 2

Model of the process of the financial management of insurance companies (Source: Authors’ own research)

Figure 3

Model of the operational level of the financial management process (Source: Authors’ own research)

Figure 4

The relationship between the financial management process and other processes implemented in insurance companies (Source: Authors’ own research)

Table 2

Measures for assessing the financial management process of insurance companies (Source: Gąsiorkiewicz, 2018)

Measure nameMeasure formula
Measure of covering the capital solvency requirement with own fundsOwn resourcesSolvency capital requirement*100%
Measure of covering the minimum capital requirement with own fundsOwn resourcesMinimum capital requirement*100%
Deductible payment capability measureTechnical provisions − net of reinsurance + other creditorsLiquid assets*100%
Measure of securing the payment of damagesTechnical provisions − net of reinsurance + capital and reservesWritten premiums − net of reinsurance*100%
Technical activity profitability measureTechnical resultWritten premiums − net of reinsurance*100%
Return on sales measureNet financial resultGross written premiums*100%
Return on equity measureNet financial resultEquity*100%
Return on assets measureNet financial resultAssets*100%
Premium monetary efficiency measureGross written premiums − refunds of gross written premiumGross written premiums *100%
Gross claims ratioGross claims paid + gross change in provision for claims oustandingGross earned premiums*100%
Damage deductible measureClaims paid − net of reinsurance + change of the state of technical provisions − net of reinsuranceEarned premiums − net of reinsurance*100%
Acquisition cost measureAcquisition costsGross written premiums*100%
Administrative expenses measureAdministrative expensesGross written premiums*100%
Insurance activity cost measureNet − operating expensesGross written premiums*100%
Cost ratio for the financial management process in administrative costsCosts of the financial management processAdministrative expenses*100%
Ratio of the financial management cost dynamicCosts of the financial management process at the end of the periodCosts of the financial management process at the beginning of the period*100%
DOI: https://doi.org/10.2478/fman-2020-0001 | Journal eISSN: 2300-5661 | Journal ISSN: 2080-7279
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Language: English
Page range: 7 - 18
Published on: Feb 20, 2020
Published by: Warsaw University of Technology
In partnership with: Paradigm Publishing Services
Keywords:
process management,
process identification,
financial management process,
financial management process model,
process relationships,
process evaluation measures
JEL:
G22
Related subjects:
Computer sciences,
Business computing,
Business and economics,
Business management,
Management accounting, financial controlling, cost calculation, investment

© 2020 Lech Gąsiorkiewicz, published by Warsaw University of Technology
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Volume 12 (2020): Issue 1 (January 2020)
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