Mutual insurance
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Insurance
The idea of mutually helping each other against misfortunes is as old as history itself. Tradesmen, merchants and ship owners created mutual societies thousands of years ago.
It was only with the Enlightenment in the 17th and 18th centuries that this idea was to be challenged by a more business oriented form of insurance, the joint-stock company. For many, the mutual principle remained appealing. Mutual companies became more professional in their asset management and some, especially life insurers, came to rank among the largest insurance companies worldwide.
The stock market boom and the mergers & acquisitions wave of the 1980s and 1990s put mutuals at a disadvantage because they could not free up their capital to acquire other companies. Many demutualized and joined the takeover wave.
It was only with the Enlightenment in the 17th and 18th centuries that this idea was to be challenged by a more business oriented form of insurance, the joint-stock company. For many, the mutual principle remained appealing. Mutual companies became more professional in their asset management and some, especially life insurers, came to rank among the largest insurance companies worldwide.
The stock market boom and the mergers & acquisitions wave of the 1980s and 1990s put mutuals at a disadvantage because they could not free up their capital to acquire other companies. Many demutualized and joined the takeover wave.
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