Why Should I Choose a Mutual Insurance Company?
Check Out The
Hidden Benefits of Choosing A Mutual Insurance Company and How It Affects Your
Bottom Line
You may be asking yourself what a “mutual
insurance company” is and what are the benefits of doing business with one.
Most insurance companies perform the same basic function of selling insurance
policies to their customers, however, differences may lie in what business model those companies
use, which can make an impact on a customer’s bottom line. A mutual insurance
company is one that is owned entirely by its policyholders. Mutual insurance
companies tend to make reliable and conservative choices when it comes to
investments or long-term decision making. They also tend to be very
customer-centric as their premiums aren’t driven by stock market pressures, as opposed to what a stock
company’s prices would be. Continue reading to learn more about the benefits of
choosing a mutual insurance company!
Premiums and
Earnings
Under a mutual insurance company, income is not reliant or driven by the stock market. This means that prices
may be near or at cost. While all insurance companies earn income by collecting premiums from their policyholders, there is a
difference in how those earnings are spent. Rather than using the earned income
to pay dividends to its stockholders, a mutual insurance company pays off debt or reinvests its earned income back into the
company itself. Mutual insurance companies also use surplus profit to support discounted rates
on future premiums. This means that they are able keep customers happy by
providing more consistent pricing overall and avoiding large rate increases.
How Investments
are Handled
It’s important to know that mutual insurance companies are not traded on stock exchanges, therefore their
investment strategy avoids the pressure of having to reach short-term profit
targets. Mutual insurers are often more long-term focused and take a much more
conservative approach towards assets when it comes to investing. In contrast,
other companies may be under pressure from their investors to maximize profits,
and are often more concerned with short-term results which can mean they invest
in riskier assets. This can mean that mutual insurance companies are less
likely to hit bumps in the road with the ups and downs of the stock market,
making it a more reliable choice for consumers overall.
The Bottom Line
As always when making a financial
decision, you will want to assess as many factors as possible in determining
what is best for you. While stock companies place ownership into the hands of
anyone who owns a share of the company, one key difference when considering
which is right for you may lie in a personal touch. Mutual companies, such as
NYCM Insurance, are known to prioritize service to their policyholders. For
more information about an insurance policy with NYCM,
check out the link below to talk to one of our trusted agents!
