An insurance company owned by its policyholders is known as what type of company?

A company that is owned by its policyholders is referred to as a mutual company. In a mutual insurance company, policyholders can have a direct say in the company's operations, and profits are typically returned to them in the form of dividends or reduced premiums, reflecting the cooperative nature of ownership. This contrasts with a stock company, which is owned by shareholders and primarily focused on generating profits for its stockholders.

In this context, mutual companies operate based on the principle of shared risk among members, aligning the interests of the company with those of its policyholders. Such structures foster a strong sense of community and accountability between the company and its insured individuals.

The other types mentioned, such as stock companies or fraternal companies, have ownership structures that do not include the same direct participation of policyholders as owners, which is a defining characteristic of a mutual company.