Who shares in the profits and losses of a mutual insurance company?

In a mutual insurance company, the policyholders share in the profits and losses of the organization. Unlike stock insurance companies, which have shareholders that own the company and receive dividends, mutual insurance companies are owned by their policyholders. This means that the individuals who purchase insurance from the mutual company hold a vested interest in its performance. When the company operates successfully and has profits, those profits can be returned to the policyholders in the form of dividends, premium reductions, or other benefits. Conversely, if the company faces losses, these may also impact the policyholders directly, as it could influence the premiums they pay or the dividends they receive. This structure emphasizes the shared risk and collective benefit among the members of the mutual insurance company, making it unique in the insurance industry.