Stock Insurer

What Does Stock Insurer Mean?

A stock insurer is an insurance company that operates using the funds from shares held by its stockholders. Its financial goal is to generate profits for these stockholders, typically through the distribution of dividends.

Insuranceopedia Explains Stock Insurer

The capital of a stock insurer consists of funds in the form of shares owned by stockholders. In other words, the stockholders are the owners of the stock insurer. A stock company returns profits to its stockholders through the distribution of dividends.

Many of the largest names in the U.S. insurance market are stock insurers, including publicly traded carriers like Allstate and Progressive, which is why they show up on lists comparing the best car insurance companies alongside mutual carriers.

In addition to the shares of stock, a stock insurer must also maintain surplus or reserve funds. These funds are primarily used to pay claims and cover any other expenses that may arise at the end of a fiscal year. For consumers, whether an insurer is structured as a stock company or a mutual company rarely changes the policy itself, so it’s usually more useful to compare the best life insurance companies based on financial strength ratings and rates than on ownership structure.