In mutual insurance, who has the ultimate control and ownership of the company?

In mutual insurance, the ultimate control and ownership of the company resides with the policyholders. This structure is distinct from stock insurance companies, where ownership is held by shareholders who have invested capital in the business. In a mutual insurance company, policyholders are both customers purchasing insurance and owners of the company, meaning they have voting rights and can participate in key decisions affecting the organization. This creates a unique alignment of interests, as the company operates to benefit its members, who are the insured.

Policyholders typically have the right to vote on important matters, such as the election of the board of directors and any significant changes in company policies. Additionally, any profits generated by a mutual insurance company can be distributed to policyholders in the form of dividends or lower premiums, reinforcing their ownership stake and influence in the company. This mutual ownership model emphasizes providing value to the policyholders rather than maximizing profits for external investors.