What is a Mutual Company?
A mutual insurance company is set up to benefit you, the policyholder, rather than stockholders. With a mutual company, each policyholder is considered a member, which means that the company operates with for your sole benefit. Building your trust and loyalty is our top priority, instead of simply focusing on stock gains.
Mutual companies usually sell a wide variety of insurance coverages, such as auto, home, farm and business. They can be small or large, covering a single county or boasting an international footprint. For Ohio Mutual, our current states of operation include Ohio, Indiana, Connecticut, Vermont, Maine, Rhode Island and New Hampshire.
Mutual companies usually sell a wide variety of insurance coverages, such as auto, home, farm and business. They can be small or large, covering a single county or boasting an international footprint. For Ohio Mutual, our current states of operation include Ohio, Indiana, Connecticut, Vermont, Maine, Rhode Island and New Hampshire.
Benefits of a Mutual Company
Simply put, it’s about you. A mutual company’s interests are the same as yours and those of the other policyholders. Decisions about costs, investments, policy terms and more are made not according to what will boost the share price for the benefit of stockholders. Instead, they’re aimed at strengthening the company’s long-term ability to meet its obligations to its policyholders.
- You share in success: Profits are reinvested to maintain financial security and improve products and services for members — not given to stockholders.
- You’re still protected from loss: Members have the same rights, protections and access to guaranty funds (subject to state regulation) as policyholders in stock companies.
- You have a say: Members in a mutual company can vote for directors and approve major corporate transactions.
The Mutual Difference
Business Goals
The primary mission of a mutual company is to protect members, by maintaining the capital needed to meet their needs and cover any insured losses — not to maximize profits for shareholders.
Investment Strategies
Investment strategies are less risky: Free from the pressure to generate quick returns for stockholders, mutual companies can focus on long-term gains and stability.
Longevity
Mutual companies are made to last. While only 1% of companies typically last for 100 years, more than 60% of mutual insurance companies have exceeded the century mark. Their median age in the U.S. is 120 years.