Mutual companies differ from stock companies primarily in that they are owned by?

Mutual companies are unique in the insurance industry because they are owned by their policyholders. This ownership structure means that the policyholders have a direct stake in the company's operations and can benefit from its profits in the form of dividends or reduced premiums. Unlike stock companies, which are owned by shareholders who seek to maximize profit, mutual companies prioritize the interests of their policyholders. Because profits are typically reinvested into the company or distributed among the policyholders rather than being distributed to external investors, mutual companies foster a sense of community and aligned interests among their members. This model encourages stability and can lead to more favorable terms for the insured individuals.