Which type of insurance company provides coverage that is owned by its members?

Mutual companies are insurance providers that are owned by their policyholders, known as members. In a mutual company, the members have a vested interest in the company's operations and its profits are typically returned to those members in the form of dividends or reduced premiums. This structure distinguishes mutual companies from stock companies, which are owned by shareholders who may or may not be policyholders.

Members of mutual companies share in the company’s success and have the right to vote on key issues, such as board elections. This member-centric approach often leads to a focus on long-term stability and the interests of policyholders, rather than just maximizing profits for external shareholders.

In contrast, stock companies prioritize shareholders and their primary goal is often to generate profit for them. Underwriting companies are not a type of insurance provider in the sense of ownership and governance but rather refer to those that evaluate and assume risk for insurance policies. Nonprofit companies also do not fit the traditional model of an insurance company as they do not operate for profit and typically focus on supporting a specific mission rather than providing ownership benefits to members.