What is Mutual Insurance System?
Mutual Insurance System
A mutual insurance company is an insurance company owned entirely by its policyholders. Any profits earned by a mutual insurance company are either retained within the company or rebated to policyholders in the form of dividend distributions or reduced future premiums.
In contrast, a stock insurance company is owned by investors who have purchased company stock; any profits generated by a stock insurance company are distributed to the investors without necessarily benefiting the policyholders.
Trivia :
Do mutual insurance companies pay dividends?
Most insurance companies pay dividends to policyholders just before their renewal dates comes up.
Are mutual insurance companies publicly traded?
Stock Insurance Companies. A stock insurance company is a publicly traded corporation owned by its stockholders, and its objective is to make a profit for them. Policyholders do not directly share in the profits or losses of the company.
What is the difference between Stock and Mutual Insurance companies? :
The main difference between a stock insurer and a mutual insurer is the form of ownership. A stock insurance company is owned by its shareholders. It may be privately held or publicly traded. A stock insurer distributes profits to shareholders in the form of dividends.
