programs Mutual

In the insurance industry, not all carriers are structured and organized the same way. In fact, over the years, a wide variety of insurance companies have evolved and taken different forms. Two of the most common structures of insurance carriers today are stock insurance companies and mutual insurance companies.

While few in the industry call much attention to this difference (other than sometimes having the word “mutual” in their name), it’s an important distinction. As a mutual insurance company, Nationwide believes this structure best aligns with our corporate philosophy and what’s most beneficial to our members.

To understand why being a mutual plays such an important role in who we are, let’s start by exploring the differences between mutual and stock insurers.

What are mutual and stock insurers?

For the most part, stock insurance companies function the same way as any other company or corporation:

  • They can be privately held or publicly owned by selling shares on the stock market.
  • They can be bought and sold just like any other business.
  • Their corporate structure is similar to other industries.
  • Their board of directors, which is elected by shareholders, hires a CEO, who hires executives, who hire managers and workers—just like other corporations.

Mutual insurance companies, on the other hand, are organized differently. Their unique characteristics include the following:

  • They cannot be owned by a single person or another business. 
  • They cannot sell shares on the stock market.
  • They only can be owned in one unique way, which is collectively by their policyholders
  • Their board of directors is elected by policyholders, not shareholders.

In other words, policyholders play a double role in a mutual insurance company. They are simultaneously its policyholders and its owners. However, it’s important to note this ownership can only be applied collectively through voting as a group. An individual’s share of a mutual company can never be sold or transferred in any way. 

It might help to think of a mutual policyholder’s role as resembling that of a corporate shareholder. Namely, both policyholders and shareholders own a piece of the company, both elect the company’s board of directors, and both have a voice in voting on management personnel and policy decisions. The most important difference is shareholders need not necessarily buy insurance from the stock company they own shares in.1

These different underlying structures create varying incentives for both groups. For example, shareholders tend to be interested in return on investment, while policyholders tend to be interested in the value of the service they are receiving. Another way to put it is that shareholders focus on earning as much short-term profit as possible, while policyholders focus on the company's long-term health.

This means stock companies—with their focus on maximizing quarterly earnings—usually operate with tighter debt-to-asset ratios. They also have a bigger appetite for risky financial investments. Overall, mutual companies have always been known for sound investment strategies.2 In fact, a primary reason for inventing mutual companies hundreds of years ago was to protect policyholders from the boom-and-bust cycles of volatile capital markets.2

How Nationwide’s mutual structure influences what we do

Free from the short-term financial pressures of a publicly traded company, Nationwide consistently makes decisions that support the long-term goals of our company and our policyholders. As we approach our 100-year anniversary, our longevity testifies to this fact. Like many mutual companies, a conservative approach to managing capital has seen us through multiple economic downturns over the decades.

Because policyholders have a voice in how the company is run, Nationwide puts members’ best interests at the forefront of all decision-making. When financial pressures may be at odds with policyholder needs, the company will almost always side with policyholders. As we’ve shown, this incentive is built into the structure of mutual insurance companies.

How Nationwide’s mutual structure benefits members

We can offer our members a wider range of coverage lines than many stock insurance companies. This is because we can support more products designed to exist over a longer period of time. With these kinds of products, it’s important to trust that owners and managers will maintain enough capital to pay claims in the long term. Mutual insurance companies are less likely to risk capital reserves at the expense of future policyholders and claimants.

Another advantage we offer our members is listening and responding to their needs. With less pressure from shareholders for every product to turn a profit right out of the gate, we take a more flexible approach to innovation. In other words, we’re willing to take chances on new ideas—and have the resources and time to vet and pursue them properly. Many of our best new product ideas originate from members’ and distribution partners’ direct needs and suggestions.

The mutual advantage for agents and brokers

Again, our advantage here involves committing to long-term planning and re-investing surplus funds. We’ve spent billions of dollars transforming our core platform and digitizing the experience of our distribution partners. This has increased speed and efficiency and made it easier to do business with us. That, in turn, helps us provide a better product and quicker service to our members. Many publicly traded companies that focus on short-term earnings goals can’t afford to make those commitments. 

Another advantage we offer agents and brokers is a high level of member satisfaction. Mutual insurance companies consistently outperform stock insurance companies in customer satisfaction surveys.3 Our partners tell us this all the time: They don’t have to sell the Nationwide brand. It sells itself.


At Nationwide, we refer to our insureds as members, never as customers. As we’ve seen, this is not a marketing ploy. It’s simply an accurate description of the ownership role policyholders play in shaping our future. The mutual relationship gives everything we do a natural membership focus and a commitment to long-term growth—qualities built into the fundamental structure or our company.