Stock Insurance Company

What Does Stock Insurance Company Mean?

A stock insurance company is an insurance company owned by shareholders rather than policyholders. These shareholders profit through dividends or from an increase in the stock price over time, but they may also incur losses if the stock value declines.

Insuranceopedia Explains Stock Insurance Company

Stock insurance companies serve as an alternative to mutual insurance companies. In mutual insurance companies, policyholders, rather than shareholders, own the business. However, in a stock insurance company, the interests of policyholders are prioritized; shareholders only receive dividends if policyholders’ needs are fully met and surplus funds remain. Many people choose to invest in stock insurance companies by purchasing shares. The split matters most in life insurance, where mutual carriers tend to sell dividend-paying whole life policies, also called participating life insurance policies, while stock carriers usually sell non-participating ones. Both kinds of carriers compete for the same customers, so shoppers will see stock and mutual brands when comparing the best life insurance companies.