Facts About Mutual Insurance Groups

2007-03-08 10:33:40

( Insurance )



Most of the insurance companies today started out as mutual insurance organizations. A mutual insurance is a non-profit insurance association whose owners are the same parties insured by the company. Centenarian mutual insurance groups that still exist today are Liberty Mutual Insurance Group and Mass Mutual Insurance. However, some of the old mutual companies have already become public entities and have already undergone demutualization. Mutual insurance provides protection to groups in several industries such as oil, nuclear, health and education.

Objectives of Mutual Insurance Groups

The goal of mutual insurance companies, such as Boston Mutual Life Insurance and Mutual of Omaha Health Insurance, is to provide insurance cover that is tailor fit to the needs of the policyholder at the lowest possible fee. In fact, mutual insurance groups are aspiring to seek contributions from mutual members at cost. In order to achieve this objective, mutual insurance companies are investing in superior claims handling, excellent risk management and comprehensive loss prevention and safety measures.

The Mutual Insurance Advantage

Since mutual companies are not concerned on making profit, they can focus on providing top quality but inexpensive insurance coverage. Unlike commercial insurance companies, mutual insurance organizations do not have to think of shareholder’s value. All efforts of the directors and management of the organization are centered in meeting the needs and protecting the interests of its members.

Mutual insurance groups usually set high standards for membership. This is to ensure that they get quality members. Commercial insurance companies, because they are driven by profit, are sometimes less discriminating in getting customers.

Continuity is one of the key advantages of mutual insurance groups. Such organizations are oftentimes unaffected by problems concerning supply and demand. You are assured that a mutual insurance company could provide you long-term coverage.

Lastly, mutual insurance companies pride themselves of being able to deliver timely payment of claims. They make sure that they have a positive cash flow in order to ensure the prompt disbursement of claims.


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