Which type of company is owned by policyholders?

Mutual companies are specifically designed to be owned by their policyholders, meaning that the individuals who purchase insurance policies also hold ownership stakes in the company itself. This structure enables policyholders to have a say in the company's governance and allows any profits generated by the company to be returned to them in the form of dividends or reduced premiums.

In contrast, stock companies are owned by shareholders who may or may not be policyholders. The focus in these entities is primarily on generating profits for shareholders rather than directly benefiting policyholders. Publicly traded companies are a subtype of stock companies but traded on exchanges, leading the ownership to be more dispersed and focused on stock performance. Corporations, in general, can vary widely in their structure and ownership, but the definition does not specifically tie ownership to policyholders as it does with mutual companies. This unique ownership model of mutual companies emphasizes their commitment to serving the interests of policyholders over external shareholders.