Mutual vs. Stock Insurance Companies: What’s the Difference? [Video]

Insurance companies are classified as either stock or mutual depending on the ownership structure of the organization. There are also some exceptions, such as Blue Cross/Blue Shield and fraternal groups which have yet a different structure.

Still, stock and mutual companies are by far the most prevalent ways that insurance companies organize themselves.

Worldwide, there are more mutual insurance companies, but in the U.S., stock insurance companies outnumber mutual insurers.

When selecting an insurance company, you should consider several factors including:

Learn how stock and mutual insurance companies differ and which type to consider when purchasing a policy.

A stock insurance company is a corporation owned by its stockholders or shareholders, and its objective is to make a profit for them. It can be a privately-held company or a public company. Policyholders do not share directly in the profits or losses of the company. 

Corporate Requirements

To operate as a stock corporation, an insurer must have a certain …