Mutual Insurance

Mutual Insurance


  • The mutual insurance industry dates to 17th century England with the establishment of the first mutual fire insurer in 1696.

  • In the United States, Benjamin Franklin helped establish the first successful mutual, founding the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire in 1752, a NAMIC member company that remains in business today. For more than 250 years, mutual insurance companies have been – and still are – about people coming together to protect themselves in a common need.

  • While only 1 percent of businesses have lasted for 100 years, the median age of a mutual insurance company in the U.S. is 120 years. More than 60 percent of mutual companies are more than 100 years old.

  • Mutual companies range in size from local companies operating in a single county to large carriers doing business nationally and/or internationally.

  • Most mutuals sell a wide variety of insurance coverages, including policies for auto, home, farm, and business. Others focus on niche markets, such as churches, pharmacies, jewelers, or lumberyards; or offer single coverages, such as workers' compensation, professional liability, or automobile insurance.

  • Capital to pay claims or provide surplus for mutual companies is built up over decades of profitable operation and investments. Profits in a mutual are often retained, in whole or in part, to finance future growth, provide a cushion against future liabilities, adjust rates or premiums, and bolster industry ratings. Mutuals sometimes return profits to their members/policyholders in the form of dividends.


  • Mutual insurance companies are part of Main Street, not Wall Street. Mutual insurers do not sell stock and do not list on stock exchanges. Yet some of the largest insurance companies in the U.S are mutual insurers.

  • Mutuals have one goal – to serve policyholders. There are no shareholders with competing interests. Mutuals do not focus on quarterly earnings reports because, unlike stock companies, there are no short-term financial performance pressures to earn a return on stockholder investment that apply to publicly traded companies.

  • Mutuals’ focus on policyholders allows them to make financial decisions and commitments based on long-term goals of financial strength and stability that support policyholder satisfaction and retention.

  • Mutual companies, boasting a median age of more than 100 years, have a proven track record of prudent fiscal management, enabling them to remain a stable force in the market and a reliable source of insurance for policyholders.

  • Mutual policyholders – sometimes referred to as members – have the same rights and protections as non-mutual policyholders under state regulation and access to guaranty funds in the event of insolvency.

  • Mutual members enjoy enhanced policyholder rights including the ability to vote for directors, approve major corporate transactions, receive policyholder dividends if declared, and ability to share in surplus (subject to state law).