3. Discuss the similarities and differences between the American Agency system and the Direct

Writers system in the Property & Liability field of insurance. Highlight the importance of

ownership of renewals to the agent.

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.

4. Identify the various costs common to all insurers and explain the extent to which these costs

may differ from one insurer and another, and from one type of insurer and another.

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.