What is the term for insurance companies that allow for profit sharing with their members?

The correct term for insurance companies that allow for profit sharing with their members is mutual companies. These organizations are owned by their policyholders, meaning that any profits earned by the company can be distributed back to the members in the form of dividends. This structure aligns the interests of the policyholders and the company, as both benefit from the company’s profitability.

In a mutual company, policyholders typically have voting rights, and they participate in the governance of the company, which is not the case with stock companies. Stock companies, which are owned by shareholders, distribute profits through stock dividends rather than directly to policyholders. Non-profit insurers do not operate to generate profit for members, and fraternal organizations often have a similar structure but focus on providing social and insurance benefits to a specific group or community rather than broad profit sharing.