Which type of insurance company is owned by its policyholders?

A mutual insurance company is owned by its policyholders, which distinguishes it from other types of insurance companies. In a mutual insurance company, the people who buy insurance policies are also members of the company and hold voting rights. This structure allows policyholders to benefit from the financial success of the company, as they may receive dividends or reduced premiums when the company performs well.

This model is designed to align the interests of the policyholders with the management of the company, as the primary focus is on providing value to the members rather than generating profits for external shareholders, which is typical in stock insurance companies. In contrast, stock insurance companies are owned by shareholders who hold stock and are primarily concerned with profitability and stock price. Fraternal insurance companies are non-profit and often serve specific groups with mutual aid, while non-admitted insurance companies operate outside of state regulations and do not have a broad base of policyholders like mutual companies.