During the past few years, there have been increasing competitions in insurance firms around the world and most insurance firms try to find appropriate methods to reduce the cost of their products. In this paper, we perform an empirical investigation to find important factors influencing cost management in insurance industry. The proposed study of this paper detects five items including human productivity, economic inflation, competitions within industry, information technology and rate of damage paid to customers, which are effective on four important cost components. The implementation of analytical hierarchy process on ranking four cost components indicate that the amount of damage paid to customers is the most important factor followed by administration expenses, commission and advertisement