What is a mutual society?
The company is an organization, usually an insurance provider that is owned by its members. This is different from public society and cooperatives. In many cases, the insertion of the organization provides its members a more stable organization, which often shares its profits with its members, but can often have problems with cash flows and suffer from stagnation.
Mutual society exists for a different purpose than most other business models. The primary objective of this company is to bring income only from its members to finance operating costs and to provide these members of the service. This is, unlike a public company that is traded in the stock market or even many private companies that have an explicit goal to achieve as much profit as possible. It also differs from the cooperative, because it does not share its profits with individual holders of shares and only in rare cases sends dividends to its members.
The model of mutual society is commonly associated with trade in life insurance.An example would be an insurance provider that charges a member of the annual coverage rate. The company will have thousands of other members who also apply annual coverage rates and other services. From this money fund, the company will pay to its employees, repay the life insurance of members who die and pay for all operating costs. All the money they will find goes directly back to society and no money from external sources is brought.
Mutual society provides its members with several benefits that larger, public or cooperative organizations cannot deliver. Stability is by far the biggest advantage, and due to their self -sufficiency, these organizations do not increase the premiums for members so often or try to increase income. Another attractive aspect of this model is that you will have a sense of ownership, because most companies are constantly reporting about all events. In many cases they accept proposals and even allow members to vote on orgAnisation decisions.
Society also has disadvantages compared to other business models. One such disadvantage is stagnation. This means that mutual companies are not as smooth as larger, public companies and cannot open branches and offer services as many areas as their competitors. Another problem that many mutual companies have is the lack of funding, because there may be times when members of members are not enough to cover all costs of society.