Types of Insurance Companies

Most insurance companies in the United States and Canada are stock insurance companies or mutual insurance companies. A stock insurance company is owned by stockholders, who share in profits earned by the company. A mutual insurance company is owned by the policyholders. Profits earned by a mutual company are returned to the policyholders as dividends or used to reduce future premiums.

Other types of insurance organizations include cooperative insurance companies and unincorporated proprietary insurers. Cooperative insurance companies, also called mutual benefit associations, are fraternal, industrial, or union groups owned by and operated for the members of the group. Unincorporated proprietary insurers are associations of individuals who join to insure a particular risk.