What is a key characteristic of mutual companies?

Mutual companies are characterized by being owned by their policyholders. This ownership structure means that the individuals who purchase insurance from the company also have a stake in it, sharing in its governance and potentially benefiting from any profits in the form of dividends or reduced premiums. Policyholders have the ability to participate in decision-making processes, often through voting rights, which contrasts with stock companies where shareholders are the primary owners and may not necessarily be customers.

The other options reflect different characteristics of other types of insurance companies. Shareholders typically own stock companies, which are profit-oriented and aim to maximize returns for their investors rather than for policyholders. Being operated for profit is inherent to stock companies as well, which prioritize shareholder profit. The characteristic of being limited to a specific industry does not apply broadly to mutual companies, as they can operate across a variety of sectors, in contrast to being tied to specific industries.