Insurance companies owned by the policyowners are classified as?

Insurance companies owned by the policyholders are classified as mutual companies. In mutual companies, policyholders have ownership rights and may also share in the profits of the company in the form of dividends or reductions in future premiums. This structure aligns the interests of the policyholders with the financial well-being of the insurer, as they are directly invested in its success and stability.

Moreover, mutual companies typically focus on serving their policyholders rather than external shareholders, which can translate into better overall value for those who hold policies with them. They are governed by a board of directors that is usually elected by the policyholders, further underscoring the cooperative nature of these organizations. This model contrasts with stock companies, which are owned by shareholders and may prioritize profit generation for investors.