Types of Insurance

Types of Insurance Companies

Insurance companies comes in two major varieties, according to their ownership: stock and mutual. A stock insurance company in very similar to other corporations. For example, its main goal is to maximize the value of its stock, and it is controlled by the stockholders, By contrast, a mutual insurance company is owned by its policyholders and is a non-profit organization. In practice, however, the management of a mutual Insurance company makes most of the decisions with little or no opposition from its policy holders/owners.

Mutual have certain advantages because the policyholders are also owners and conflict between policy holders and owners are reduced.

Management of mutual tends to be conservative. As a result, policies are more secure. The main disadvantages of a mutual is the difficult of monitoring management.

Insurance companies can be classifying according to types of policies they sell. The two major types of are life and non-life or property/liability (P/L) insurance companies.

• Life  insurance companies
• Health insurance companies
• Property and liability insurance company

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