What is a key characteristic of a direct writer system?

In a direct writer system, the key characteristic is that employees are directly compensated by the insurance company. This means that the agents work as employees of the insurer rather than as independent contractors. They are typically salaried and may also earn commissions based on the sales they make. This structure allows for a more consistent approach to selling insurance products, as employees can be more closely aligned with the company's goals and training processes.

The direct writing model contrasts with other systems, where agents may operate as independent contractors or represent multiple companies. In those cases, agents may have more autonomy but often have less influence over the policies and practices of the insurance companies they represent. By employing agents directly, insurers can maintain a tighter control over their brand, messaging, and customer interactions, which can enhance service consistency and effectiveness in selling their products.