Which type of insurance company is owned by its policyholders?

Mutual insurance companies are owned by their policyholders, meaning that the people who purchase insurance from the company also hold ownership stakes in it. This structure allows policyholders to have a say in how the company is run and to benefit from any profits made, often in the form of dividends or reduced premiums. Because mutual companies prioritize the interests of their members, they can operate with a focus on providing value to their policyholders rather than maximizing profits for shareholders, as stock companies do.

The other types of companies listed do not follow this ownership structure. Stock companies are owned by shareholders who may or may not hold policies with the company, which means profits are primarily distributed to shareholders. Fraternal benefit societies are organizations that provide insurance to members of a particular social group and typically operate on a not-for-profit basis rather than being owned by policyholders in the same manner as mutual companies. Risk retention groups are a type of liability insurance company that is owned by its members but operates differently and is not specifically structured as mutual insurance. Therefore, mutual insurance companies uniquely represent the idea of ownership by policyholders.