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The Role of Managing General Agents

Managing General Agents (MGAs) are leaders of the wholesale insurance market place and function as an intermediary managing the relationships among policy holders, retail producers and the insurance carriers. These agents provide underwriting and administrative services and have the authority to accept and appoint placement from retail agents on behalf of the insurers they represent. Generally, MGAs market more unusual coverage, such as professional liability, for which a particular expertise is required. Insurers benefit from MGAs where such expertise is not available within the company and would be costly to develop.

The purpose of MGAs hired by insurance companies is to supervise their business in a particular territory and they are often referred to as wholesalers, but in no way do they compete with brokers and do not deal with customers directly. MGAs have a unique relationship with their carriers. Depending on the relationship, a MGA may perform tasks normally performed by an insurer; which include, handling claims, issuing policies, sub-contracting with independent agents, collecting premiums and negotiating commissions to name a few. As agents of the insurer, they perform the basic insurance functions for the carrier of underwriting and policy issuance.

According to the American Association of Managing General Agents, an MGA can be used in any line of insurance and includes insurers who are “admitted or not, direct or otherwise, broker or agent system, contract/appoint or open-broker sub-production, or any combination of these.” Typically, MGAs are utilized most in the excess and surplus lines insurance market, but are also found in the commercial and personal insurance market.

When thinking about how MGAs work, it’s best to consider traditional insurance market access where it flows from the insurance company to the retail agent and finally to the insurance buyer. Now consider how the surplus lines market access flows. It works in much the same fashion with one major difference. The MGA acts as the intermediate between the insurer and the agent. In this way, market access flows from the insurance company, to the intermediary, the retail/out of state agent and finally to the buyer.

MGAs are generally entitled to a contingency commission on all business written within their territory. They take a percentage of the commission that would usually go to the producing insurance agent. Being an MGA means personal accountability as well as responsibility for producers. MGAs take on the significant costs involved in being a wholesaler and the investment needed to succeed.

Understanding Logistics

According to Ghiani (2004), logistics can be defined as the planning and controlling of products and information in an organization. It aims at delivering materials to a given destination for another trying to optimize a particular measure and ensuring satisfaction of a particular set of constraints. These definitions can be simplified to mean the managing of the flow of goods as well as services from the point of manufacture to the point of consumption ensuring that the requirements of the consumer are observed. Activities under logistics include information integration, warehousing, packaging, inventory, security, transportation, as well as handling of materials. Logistics compliments supply chain by add value to place, as well as time utility.

Logistics are identified in different fields due to performance value. These fields include procurement, after sales, production, disposal, as well as distribution fields. This paper will identify the areas where organizations involve logistics as well as the essence of an effective logistics to an organization.

These fields of logistics determine specific activities. Procurement logistics involve make/buy decisions, supplier and other management, as well as market research. Production logistics’ key principle is to connect procurement to distribution logistics. This field of logistics determines the capacities of production under available resources in response to distribution logistics. Distribution logistics deal with delivering of finished goods to the consumer or rather customers. Its components include processing, warehousing, as well as transportation. This logistics is most essential since the time, place as well as quantity of production vary from the time, place, and quantity of consumption.

Today, logistics have been simplified through technological advancements. Complexities which hinder effective logistics management can now be visualized, modeled, optimized and analyzed through particular simulation software. These complexities have necessitated the use of this software. Successful businesses are using this software to case the work of logistics analysis and hence providing effective strategies of managing supply and demand. Problems in logistics majorly occur in organizations that engage in product delivery but they can also occur in firms producing services (Ghiani, 2004). Examples of this include garbage collection, after sales services, as well as mail delivery, among others. Maintenance and operational cost of logistics is another hindrance of its use. Research conducted in the United Stated in 1997 proved that organizations used 862 billion dollars as the total logistics expenditure. It is hence essential for organizations to understand how to minimize logistics cost (Rushton, 2000).

Reliability and sustainability are other factors which affect the efficiency of logistics. Reliable systems as well as equipment’s should be able to perform intended purpose for the identified period under stated conditions through effective logistics. Inefficient logistics will lead to a wrong probability on performance capabilities of systems hence causing massive losses. Reliability will thus project the probability of systems and equipment in an organization (Landford, 2006).

In conclusion, the main issue under logistics is deciding how and when raw goods and finished products will be shipped, transported, and stored. This unlike other operations management is most evident in modern societies. A logistics system comprised of facilities that have been corresponded to the transportation services. Facilities include locations where goods are processed, and they include manufacturing centers, distribution centers, transportation terminals, as well as dumpsites, just to mention a few. The transportation services move goods between the facilities.

What Services Do Property Management Companies Offer?

Owning real estate is a wonderful feeling, especially for those who have really toiled for many years to become a property owner. Though it might sound a little materialistic, but a property is actually a mark of someone’s hard work. Thus, when a family has to relocate to some other place far from their land or property, due to job commitment or any other reason, it is a natural concern to be worried about the property. Managing the property effectively, without keeping an eye on it regularly, is almost impossible for the landlord. This is exactly when a property owner should start looking for a professional property management company. However, it is good to know what services these property management companies offer before you go ahead and fix a meeting with any agency. This would actually give you a clear idea of what you should expect and ask for while interviewing the property manager.

Basically, these companies deal with flats, villas, independent houses, rental apartments and commercial properties. Once you sign a legal agreement with any of these companies, it actually becomes their responsibility to rent out your property by searching suitable tenants. To look for right tenants, they advertise your property through the local media. The replies that come to the property advertisement are promptly attended by the company. Their expert staff then shows the whole rental property to the prospective tenants. In fact a clear and detailed report is provided to the landlord on all those potential tenants who had come to check out the property. This is to ensure that the landlord makes a right decision. Once the tenants are finalized, then the company would execute a rental agreement.

The responsibility of the company does not end here. They collect monthly rent on the landlord’s behalf and deposit it into his bank account. Apart from the timely rent collection, the professionals would also visit the property regularly, in order to make sure that it is efficiently maintained and not harmed by the tenants. Professional photographers are hired to take the photographs of various parts of a property to be sent to the landlord. Though these visits by the property managers are periodical, they are always keen to help tenants if they find anything objectionable.

Also, in case there is a repair work to be done, the company takes care of it by appointing an external contractor to fix the problem areas. Another very important service offered by a property management agency is conducting an inventory audit. It is conducted when a property is rented out to a tenant and when he/she vacates it. The reason for conducting this audit is to make sure that all physical assets of the property are in a good condition. To summarize, the services proffered by a property management company play a pivotal role in reducing the burden of a landlord, owning multiple properties. Therefore when you actually enter into a contract with such a company and you can indeed be totally assured of getting quality services.

The Importance of a Balance Sheet

An individual has two primary tools for managing personal finances. The Personal Balance Sheet is ignored and the Budget is the darling of Financial Consultants and the media. The key to understanding personal finances is that you have to understand your Budget and Balance Sheet individually and also how they work in combination to give you a complete snapshot of your personal finances.

Your balance sheet is extremely important because it shows you where the gold is. It is your personal Fort Knox. It is also extremely important because you need to have a stash of gold in your personal financial picture. The gold in your Balance Sheet is not the Assets. They are the positive side of your Balance Sheet but the real picture of how much gold you have in your Fort Knox is your Net Worth. So just as important to your Balance sheet is your Liabilities. The total of your Liabilities is subtracted from the total of your Assets to give you your Net Worth.

You fill out your Balance Sheet and total up your Assets and Liabilities. You subtract the total of your Liabilities from your Assets. That number, your Net Worth will come out to either a negative amount, an amount of or near to zero, or it will be substantially positive. These are the only 3 scenarios possible.

• If your net worth is a minus number, you are not managing your financial resources properly. Your Balance sheet is your report card and you are failing. It is that simple. If you are managing your money to deal with life’s challenges and planning your personal finances with your retirement in mind, your Net Worth should be positive and growing. If your Net Worth is positive, you can ride out financial storms like the current situation. At the time of your retirement, your Net Worth must be substantially positive so that you will be able to keep costs down and have investment income to replace your working income. During your working years, your Net Worth should be growing steadily because a retirement nest egg does not grow without years of nurturing.

• There are circumstances where it is acceptable to have a Net Worth of Zero or near Zero. The first is when you are just starting out. It just makes sense that it would be zero. You may have student loans but that is offset by some form of education that will allow you to make more money in the course of your lifetime. The key is that this is the best time to start building your net worth. It allows the principal of compounding value to work its magic on your assets for decades. That saves you a lot of work later in life. However, most of us are not that wise and we find ourselves in our 30s and 40s with little or no Net Worth. This means you have less time for compounding to work. So you have to work harder and especially manage your money smarter to prepare for the financial challenges you face going forward. The nice thing is that you have probably made some mistakes that have made you much wiser. You should be able to recover much faster than you would have in your undisciplined youth.

• If you have a positive net worth that means that you are building assets. Just as important is that you are controlling your debt. This is the key that has probably gotten you to this situation. The key to a positive Balance Sheet is that debt offsets the value of your assets when you look at your personal finances as a complete picture so your debt/equity ratio should be less than one and get smaller and smaller. Debt servicing saps cash flow on your budget that could be used to build assets that can be used to produce income in your retirement years. Clear title ownership of assets such as your home reduce cash draw and this is incredibly important as you approach retirement.

The financial crisis we are in now is described as a Balance Sheet crisis. We are in this crisis because nobody was paying attention to their Balance Sheets, not even at the towering heights of our financial infrastructure. The symptoms were everywhere. While researching I found that the top sites on the internet for Balance Sheet are those who want to sell you something so that they can gain access to any assets on your balance sheet that might be left after this disaster. Before the disaster, the only thing that had any importance was whether a potential buyer of anything could afford to make the payments on whatever he was buying assuming he made 120% of his stated income. The most outrageous symptom was that people would take appreciating home equity and borrow against it to buy depreciating assets and consumer goods. They overbooked their budgets and now they have gutted their balance sheet.

The resulting loss of home values is the disaster we have now where people have either a zero or minus Net Worth. The other aspect is that we are now wiser. For the good of our society and our financial infrastructure we had better be. Going forward we must pay attention to our Balance Sheets and recognize that is where the gold is. You must save and protect your gold. Net Worth is where financial power is and that is the Importance of a Balance Sheet.

Limitations Of Management Information Systems

A Management Information System (MIS) is a precious technology that organizations use to measure the efficiency of their business operations as well as performance of their employees. The MIS endows with thorough insight of a company and supports management for making decisive business decisions. Though the MIS provides big number of advantages, but yet it also comes with a few limitations. In this article, we will be focusing on that part of management information system.

Security

This is the very significant area of management information system and it should be well secured. All the important as well as the secret data are there stored in an MIS and which is not supposed to seen by anyone outside the company or anyone who is not authorized to do so. However, it happens sometimes and the important data gets seep out of the organization. It affects the company a lot in business and hence the companies should focus more on this security part. Let’s discuss a few ways how the security of an MIS can be broken.

Hackers: At present, a number of people who have excellent IT knowledge hack this kind of system, maybe for money or for some other purposes.

Ex- employees: In some cases, it has been seen that the account of employees are active in MIS site even after they got out from there. Sometimes, these accounts can be used for some negative purposes.

Virus: While the employees of any organization use this system, they should make sure that their operating device or computer is virus free. If the device has dangerous viruses then these can be a concern for the security of the MIS.

Server

All the data are stored in a particular server, which is also known as the hosting server. The upload time of any server cannot be 100%. It may be 90% or 99%. But, never can be the fullest. So, the site can be down for anytime. Hence, this is another limitation for management information system.

Internet

Same as server, Internet is also a part where MIS has to be dependent. If someone cannot access the net services or the weather is cloudy or maybe the user is in remote or rural area where no network is, then he or she won’t be able to get access of management information system.

So, these are a few limitations that a management information system has to over come in future. However, with having those limitations, yet it helps a lot to the organization, the down line employees and top level managers to take proper decisions for the well of the company.

What To Expect From a Financial Course

Thanks to the influx of technology and the Internet what once was only available to a privileged few is now available to a wide array of people from all walks of life. Thanks to online financial courses, students who once would have been unable to attend prestigious schools of finance or tertiary education colleges are now able to pursue the degrees in finance they desire.

Simply put, finance education and financial courses are available with the click of a mouse.

A finance course consists of studies relevant to global finances. Courses vary from one-time seminars, to certificate and diploma programs, to undergraduate and post-graduate degrees.

While “Finance” may seem to be a simple topic, it is actually a complex and diverse course of study. The basic area of study covers everything from finance theory to the application of statistical and mathematical principles. From the basics, students of finance would pursue specialized education in areas of banking, accounting, business management, and law.

The quantities of available finance courses are bountiful. These courses focus on areas like corporate finance, investments, banking, fixed income and financial management, financial engineering, derivatives, interest rates, risk management, personal finance, computer applications of financial management, international finances, financial institutions and banking, as well as insurance and risk management. Specialized financial courses are available to help analysts and advisors build additional skills in the areas of education finance and budgeting, health care finance, global finance and managerial finance.

College finance courses take the simple finance courses outlined above and provide more details, address more issues and give undergraduate and graduate students the advantage. These college finance courses cover aspects like in-depth corporate finance, monetary economics and its position in the global economy, business economics at microeconomic level, investment management, corporate valuation, international corporate finance, analysis and financing of real estate investment, international financial markets, international banking, urban fiscal policy, fixed income securities, behavioral finance, finance of buyouts and acquisitions, among many others.

Once an advanced degree of finance study is being pursued, a student will encounter the progressive courses of econometrics, principles of micro and macro economics, statistical practice, accounting, and international trade.

It’s best to understand financial courses as much as possible so you can make an informed decision and take the best steps possible to reach your objective. Our time is our so precious and despite cell phones and other conveniences we seem to never have enough of it. See below for more information on Finance Course.

Managerial Economics – Application of Economic Theory in Solving Business Problems!

Managerial economics is concerned with various micro and macro economic tools and the analysis of which can be used in managerial decision making to solve business problems. Micro economic tools that are used in this subject include demand analysis, production and cost analysis, break-even analysis, pricing theory and practice, technical progress, location decisions and capital budgeting. The macro economic concepts that are directly or indirectly relevant to managerial decision-making comprise national income analysis, business cycles, monetary policy, fiscal policy, central banking, government finance, economic growth, international trade, balance of payments, free trade protectionism, exchange rates and international monetary system.

The scope of this managerial science is wide and it has close connections with economic theory, decision sciences and accountancy. Traditional economics talks about the theory and methodology while managerial economics applies economic theory and methodology to solve business problems. It uses the tools and techniques of analysis to provide with optimal solutions to business problems.

  • Relationship with economics:

Managerial economics borrows concepts from economics just as engineering does from physics and medicine from biology. The analysis of both micro and macro economic concepts add valuable inputs to the organization. Say, national income forecasting is an important aid to business condition analysis which in turn could be a priceless input for forecasting the demand for specific product groups. The theories of market structure can be analyzed for the purpose of market segmentation.

  • Relationship with decision sciences:

Decision models are created to format the solutions for problem situations and the process utilizes techniques like, optimization, differential calculus and mathematical programming. This also helps to analyze the impact of alternate course of action and evaluate the results obtained form the model.

  • Relationship with accounting:

Accounting data and statements constitute the language of business. The accounting profession considerably influences cost and revenue information and their classification. A manager should therefore be familiar with the generation, interpretation and use of accounting data. Accounting moreover is viewed as a management decision tool and not anymore as a mere practice of bookkeeping. The concepts and practices of accounting can be very well applied to improve the economic scope of a project.

Economics is an interesting subject as it deals with the day-to-day problems of a common man and at the same time is concerned with the economic prosperity of a country as a whole. Its primary focus is on scarce resource allocations among competing ends. Individuals, enterprises and nations face problems of resource allocation. Managerial economics may be viewed as economics applied to problem solving at the level of the firm.

The 5R’s in Waste Management

The 5 R’s – The key factors that are to be remembered in respect of waste management are – Reduce, Reuse, Recycle, Recover and Replace.

1. Reduce – wherever possible reduce waste production. One can always reduce waste production by following these simple guidelines:

a. Use or buy only what is needed – when there is no waste generated, then there is no waste to be treated. Make a shopping list before going for shopping. This will ensure that you don’t buy things which are not needed. Don’t give in to temptation by buying random items.

b. Buy items that can be re-used like rechargeable batteries. This will create very less waste as they can be reused more than once.

c. Unsubscribe from paper mails and instead opt for emails.

d. Buy products with minimum packing. Flashy and fun packaging does not necessarily mean better product quality.

e. Say NO to plastic bags. Carry your own reusable shopping bags.

f. Spread the word on waste reduction at source – more people adopting waste reduction means less waste generated.

2. Reuse – if waste is produced, explore the feasibility of reusing the waste. Don’t throw away items that are reusable. Reduce waste by making full use of any item. Here are some useful ideas on how to reuse those everyday bits and pieces.

a. Re-use old clothes by stitching items like cloth bags, cushion covers, table / sofa covers etc. Those that cannot be reused as such can be used as waste cloth for cleaning.

b. Re-use old tires in the garden as swings or as pots for growing small plants.

c. Re-use glass bottles and jars as storage containers after cleaning and drying.

d. Re-use envelopes by sticking labels over the address.

e. Re-use plastic bags as waste bin bags.

3. Recycle – if reusing is not feasible, explore the next option of recycling the waste. As there are economic and environmental costs associated with waste collection and recycling, it should be considered only where reduction and reuse of waste is not practicable / feasible. Most of the household and work place items can be effectively recycled with a little effort. Here are some tips on adopting recycling:

a. Keep recyclable trash containers at strategic locations at home / work place. This will foster better participation in the recycling process from every one.

b. Don’t throw something out just because it is old or broken. Repair and repurpose it for use again.

c. Recycle food waste by composting using compost bins.

4. Recover – it may be possible to recover materials or energy from waste which cannot be reduced, reused or recycled. For instance, Sweden has been successfully generating biogas and fuel oil from waste and trash.

5. Replace – adopt eco-friendly goods or lifestyles, such as using handkerchiefs instead of tissues, travel by public transport instead of private cars, walk or cycle for short commuting distances, adopt car-pooling for long distance commuting instead of self-driving etc.

Habit is a powerful tool in our daily life. Most of the things we do in our daily life are a matter of habit. Buying unwanted items, using tissues instead of handkerchief / cloth napkins are all habits which have been ingrained into us. The trick lies in changing these habits into environmental friendly habits, a challenging task for anyone, but still necessary for a better world. In other words, the 5 Rs should be practised as a norm rather than as an exception.

Know When Your Business Needs IT Consulting Services

Businesses must ensure that only the latest technologies and software are deployed at the workplace, in order to provide quality solutions to their clients, and to be ahead of the competition. With the ever-changing technological trends in the industry, businesses find it cumbersome to adopt these technologies. Instead they can hand the entire function over to a sound IT consulting services company – who in turn will tap into their global pool of highly skilled IT professionals, who have the advantage of working in various IT environments, and have extensive experience across sectors. By providing assistance to business, IT consulting services providers free up existing resources; ensure IT transitions are smooth and problem-free; optimise key business processes; identify areas that benefit with further cost saving; build competitive advantage through IT; reduce IT complexities; provide IT strategy consultancy services, IT project management services and provide specialised programme management solutions – all of which, help the organisation achieve significant business efficiencies and cost benefits.

Choosing to work with an IT firm definitely boosts a company’s overall efficiency, which in turn decreases costs. Firms tend to look for a flexible and bespoke solution to address the client’s IT needs, thereby delivering solutions that are in tandem with the client’s goals.

The advantages listed above necessitate hiring an IT company. But how will a business know that it needs IT consultancy services?

A business may function with its existing IT architecture without knowing the benefits of such services. In order to discern the need for IT consulting services, businesses must first understand the details of their services. According to Wikipedia, ‘IT consulting is a field that focuses on advising businesses on how best to use IT to meet their business objectives. In addition to providing advice, IT consultancies often estimate, manage, implement, deploy, and administer IT systems on businesses’ behalf, known as Outsourcing’. IT consulting services firms thereby help businesses strategise and evaluate their IT functions as a whole and take the necessary steps to implement and/or deploy and then administer effective and robust IT systems in place. Businesses can seek the services of an IT firm when:

  1. IT investments regularly overshoot the set budget. Fast-paced technologies and trends warrant proper planning. When making strategic use of the allocated budget seems difficult, seeking the advice of IT consultancy services providers is imperative.
  2. A business decides to relocate or reduce staff.
  3. Projects regularly miss deadlines. Lack of specialists, complex projects and shoestring budgets lead to inefficient project management. A sound IT consulting services company designs bespoke, safe and cost-effective solutions, either full time or part time.
  4. Challenges of globalization, technical and regulatory changes arise. Business and technology management when integrated help the business survive, and therefore IT strategy consultancy is important.
  5. Programmes and projects eat into the budget. A business needs specialised programme management solutions to achieve significant cost savings. A robust IT services company provides either the co-sourcing or the outsourcing model to help businesses remain ahead of the competition, by providing tailored solutions.
  6. There is a need to change networks or when the need to shift to a new IT architecture arises.
  7. The company is in need of a robust disaster recovery plan.
  8. There are no data storage systems in place.

Availing the services of the right IT consulting services company may be a challenge. A business must choose a provider before the problems stated above get worse – and must choose a provider who is able to set in place a sound IT system in place. Therefore, a business must choose a provider who provides flexible solutions. Businesses must also remember that though they think they are able to fix small issues, the reality is that these issues must be treated at the root, and they can be properly tackled only with strategic IT solutions – only provided by an effective IT consulting services company.

Management Styles – The Unorthodox

You can’t always define right and wrong when it comes to management styles. You have to find your own style that’s right for business. Sometimes this means trial and error – and heresy. There are times when heresy and an unorthodox management style can pay off – as shown by a Brazilian engineering company called Semco.

If you have your own business then it is your prerogative to run it any way you see fit. Your management style might be considered eccentric but no one can prevent you putting it into practice.

The unorthodox management of Ricardo Semler of Semco certainly paid off. As he reveals in his book Maverick! his off-the-wall management ideas have worked for Semco, with unusual business practices such as subordinates giving their managers twice-yearly appraisals. If a boss scores low, he can even lose his job!

The manager is referred to as ‘the subject’ in a multiple choice questionnaire. The first among the 36 questions is: ‘If an employee makes a small mistake, the subject:

1) Is irritated and unwilling to talk about the error

2) Is irritated but willing to discuss the error

3) Identifies the mistake and discusses it in a constructive manner

4) Ignores the error and pays attention only to more important matters.

It’s not rocket science to spot the correct answer and you can tell Semler has a good understanding of management behavior. He expects his managers to be fair and relaxed, secure and friendly, innovative and competent, trustworthy and participant.

So do unorthodox management styles help with the above?

In all businesses and all processes, there is room for improvement and you have to listen when someone comes up with an idea that has the potential to realise that improvement. You have to look at the benefits before dismissing the idea. You should be prepared to embark on challenges and change in order to create an organisation where people are happy with the management style – and that goes for the people managing and those being managed.

Semler has found success with an unorthodox management style and built a company that has the power to create effective new ideas, and continues to do so.