Hi everyone,

I'm currently exploring the implementation of Activity-Based Costing (ABC) for handling indirect expenses such as staff salaries, office rentals, and other overheads. I am particularly interested in understanding how these practices are applied within the financial sector, with a specific focus on the general insurance industry. The cost drivers in allocating the indirect expenses will be crucial for determining the profitability of each portfolios/business lines/products etc.

If anyone has experience or insights on the following, your input would be greatly appreciated:

1. Financial Sector: Banking? Insurance? Etc.

2. Cost driver applied to allocate the Indirect Expenses into Depts/Business Units: By Office Floor Space? Headcount? Etc.

3. Cost driver applied to allocate the Indirect Expenses into respective portfolios/business lines/products: By Sales Count? Gross Premium Amount? Etc.

Currently my experience is as below.
1. Insurance.
2. Staff Costs (salaries, allowances etc)- by headcount; for Rental/Stationeries/Printing Costs: by floor space.
3. By Gross Premium by business line.

I'm looking forward to hearing about your experiences and any recommendations you might have. Thanks in advance for your help!

This post has been edited by cozof: Jul 1 2024, 10:21 AM