If you insert a jpg through the Insert menu or drag it from the file manager into Writer it should be inserted as a jpg into the file. The file size should increase by the size of the jpg plus a few bytes for the XML.
It might be an additional image was dragged in because an image was not visible for some reason, possibly hidden behind another image. Check using Navigator that you have the correct number of images.
Note that copying and pasting an image from elsewhere will insert it as a PNG file with a commensurate increase in size.