What is a type of insurer that is owned by its policyholders called?

A mutual insurer is owned by its policyholders, which means that the individuals who purchase insurance policies from the company effectively have ownership stakes in that company. This structure allows policyholders to participate in the decision-making processes of the company, including the election of the board of directors.

Additionally, mutual insurers typically share profits with their policyholders in the form of dividends or reduced premiums, which is a distinctive feature of this type of insurer. The focus on serving the interests of policyholders, rather than external shareholders, aligns the company's objectives closely with those of its customers, fostering a sense of community and shared interest among policyholders. This model can make mutual insurers particularly appealing to those seeking a more customer-oriented approach to insurance services.

In contrast, stock insurers are owned by shareholders and focus on maximizing profits for those shareholders rather than for policyholders. Fraternal insurers are specialized organizations that provide insurance mainly for members of specific social or religious groups, while reciprocal insurers involve members who exchange insurance contracts with one another. Each of these other types of insurers operates under different ownership and governance structures, which differentiates them from mutual insurers.