What is a Stock Insurer?

A stock insurer is defined as a corporation that is owned by stockholders. This structure means that the stockholders- those who purchase shares of the company- have a financial interest in the insurer's profitability and operations. They benefit from any profits in the form of dividends and have the ability to influence major decisions through their voting rights during shareholder meetings.

This type of ownership distinguishes stock insurers from mutual insurers, which are owned by policyholders and do not have stockholders. The profit motive is a key aspect of stock insurers, as they aim to provide returns on investment to their stockholders while also fulfilling their obligations to policyholders. Understanding this structure is important for recognizing how different types of insurance companies operate in the marketplace and how their goals may differ.