Which form of insurer has shareholders?

A reciprocal company operates on the principle of mutual insurance where policyholders exchange insurance contracts among themselves. In this model, there are no shareholders; instead, the policyholders are both the insurers and the insured, which fundamentally differentiates this structure from stock companies.

Mutual companies are owned by their policyholders, who share in the profits and losses of the company. Since there are no external shareholders, the policyholders have voting rights and can influence company decisions, which contrasts with the stock company structure where outside investors own shares.

Fraternal societies are nonprofit organizations that provide insurance only to their members, who share a common bond, such as a religion or ethnicity. They operate similarly to mutual companies in that they do not have shareholders; instead, members control the organization and its profits are typically used for member benefits rather than distributed as dividends.