What is the mutual insurance company?
Mutual insurance company is an insurance company owned by its policyholders, not shareholders. The company's decision is taken by policyholders, usually through the chosen council composed of policyholders. With their roots in England of the 17th century, they were created to help owners to protect against losses as a result of a fire by sharing financial risk. In this model, the policyholders of the mutual insurance company would pay premiums to the fund from which claims and expenses were paid. It is assumed that the first mutual insurance company in American colonies was founded in Charleston, South Carolina, but a few years later destroyed more than 300 houses after the fire was destroyed. Another early US mutual insurance company was founded by Benjamin Franklin in Philadelphia in 1752 and still acts as a mutual insurance company.
When the mutual fire rebellion of the ance began in England, they not only providedFinancial protection, but also created fire brigades to fight against fires on the property of members, which were identified by a unique "fire brand" placed on the land, often as a door frame. These fire signs were often pictures of the hands that gripped each other, symbolizing mutual support and cooperation. When Franklin solved the problem of loss due to a fire in Philadelphia, he did not combine firefighting and financial components that characterized mutual insurance companies in England. Instead, he first created a volunteer fire brigade, which protects the assets of all residents called Union Fire Company. Only after closing, a few years later, the fires and losses associated with them were inevitable to create a contribution in Philadelphia for home insurance from fire loss. Although the fire mark was unnecessary, the company accepted the symbol of four -closed hands and created "Jacob's momentary" as its logo.
More than 400 companies around the world works asmutual insurance companies. Their basic method of operation has been essentially unchanged since the concept introduced for the first time in England at the beginning of the 16th century, except that they no longer work fire brigades to protect the assets of members. Types of insurance offered a range far for simple insurance for fire and victims, but the premiums are still associated to reimbursement of claims and expenditures, with surplus funds regularly divided among policyholders. The management of the mutual insurance company is carried out by the policyholders elected to their positions by other policyholders.
Some mutual insurance companies, such as John Hancock and Metropolitan Life, as in the United States, Japanese company Yamato Life Insurance and the Provisional Friends of the United States, decided to "demutualize". Demutualization is a process of transferring ownership from mutual society to another form, such as the ownership of ownership holding shareholders. One of the main reasons for demutualization is the increased ability of society to acquireFunds beyond the premium paid by its policyholders, which gives them greater flexibility in carrying out new projects and respond to changing market conditions.