What type of insurance company is owned by its policyholders?

A mutual insurance company is a type of insurance provider that is owned by its policyholders. This means that when individuals purchase policies from a mutual insurance company, they become members and have a say in the company's operations, including voting rights on key issues such as the election of the board of directors. The profits made by the mutual company are typically returned to policyholders in the form of dividends or reduced future premiums, aligning the company's success with the interests of its policyholders.

In contrast, stock insurance companies are owned by shareholders who may not be policyholders. Their primary goal is to maximize profits for those shareholders. Pooled insurance companies and joint stock companies do not specifically reflect the ownership structure by policyholders as mutual companies do. Therefore, the defining characteristic of ownership by policyholders is a key reason mutual insurance companies stand out in the insurance industry.