Which entity owns a mutual insurance company?

In a mutual insurance company, the entity that owns the company is the policyholders. This ownership structure differentiates mutual insurance companies from stock insurance companies, where ownership is held by stockholders. In mutual companies, policyholders not only purchase insurance coverage but also participate in the financial success of the company.

As members, policyholders collectively share in the company's profits, which can be distributed through dividends or reduced future premiums. This ownership model encourages alignment of incentives, as policyholders have a vested interest in the company's performance, ensuring that the focus remains on providing value rather than maximizing earnings for external shareholders.

This structure creates a unique relationship where the policyholders have voting rights in significant company decisions, such as electing the board of directors. Therefore, this model fosters a sense of community and collective responsibility among the policyholders, as they are essentially co-owners of the insurance entity.