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A mutual insurance company is an insurance company owned entirely by its policyholders. Any profits earned by a mutual insurance company are either retained within the company or rebated to policyholders in the form of dividend distributions or reduced future premiums. In contrast, a stock insurance company is owned by investors who have purchased company stock; any profits generated by a stock insurance company are distributed to the investors without necessarily benefiting the policyholders.
The concept of mutual insurance originated in England in the late 17th century to cover losses due to fire. The mutual/casualty insurance industry began in the United States in 1752 when Benjamin Franklin established the Philadelphia Contributionship for the Insurance of Houses From Loss by Fire. Mutual property/casualty insurance companies exist now in nearly every country around the globe.
The "mutual holding company" structure was first introduced in Iowa in 1995, and has spread since then. There have been concerns that the mutual holding company conversion is disadvantageous for the owners of the company, the policyholders.
The major disadvantage of mutual insurance companies is the difficulty of raising capital.
^ abWright, Janet; Virginia Wadsley; Janice Artandi (1994). The History of the National Association of Mutual Insurance Companies, A Century of Commitment, 1895-1995. Indianapolis, IN: National Association of Mutual Insurance Companies. pp. 1-5.
^Wright, Janet; Virginia Wadsley; Janice Artandi (1994). The History of the National Association of Mutual Insurance Companies, A Century of Commitment, 1895-1995. Indianapolis, IN: National Association of Mutual Insurance Companies. p. 21.
Emery, Herbert, and George Emery. A Young Man's Benefit: The Independent Order of Odd Fellows And Sickness Insurance in the United States and Canada, 1860-1929 (McGill-Queen's University Press, 1999).
Van Leeuwen, Marco H.D. Mutual Insurance, 1550-2015: From Guild Welfare and Friendly Societies to Contemporary Micro-Insurers (Palgrave Macmillan, 2016) 321 pp. online review, A standard scholarly history
NAMIC - National Association of Mutual Insurance Companies
ICMIF - International Cooperative and Mutual Insurance Federation