1. The American Agency System represents many companies, and the agent is said to own the expirations. The Direct Writing system operates through exclusive agents such as State Farm, for example as well as captive agents like Allstate. Highlight the importance of ownership of renewals to the agent in the American Agency System and the Direct Writing System.

2. Costs common to all insurers include losses and loss adjustment expense, acquisition expenses, or marketing and sales expenses, administrative expenses (company overhead), taxes, and profits/contingencies. Explain the extent to which these costs may differ from one insurer to another.