The Insurance Industry

Insurance companies play a vital role in the economy of many nations. They contribute to a country's economic stability by compensating individuals and businesses for financial losses that might otherwise ruin them. 
Insurance companies invest huge sums of money in stocks, bonds, mortgages, government securities, and other income-producing enterprises. Insurance companies also help guarantee repayment of loans and the completion of commercial projects and public works. People can reduce the risks of starting a new business or acquiring property by buying insurance. Thus, the insurance industry helps increase the production of goods and services. Finally, insurance companies pay large sums in taxes and employ many workers. In Britain, insurance is a major export. About three-quarters of the business of the British insurance industry comes from overseas. The City of London has long been a major center for insurance. 

Types of insurance companies. Most insurance companies are stock insurance companies or mutual insurance companies. 
A stock insurance company is owned by stockholders, who share in profits earned by the company. 
A mutual insurance company is owned by the policyholders. Profits earned by a mutual company are returned to the policyholders as dividends or used to cut future premiums. 

Other types of insurance organizations include cooperative insurance companies and unincorporated proprietary insurers. Cooperative insurance companies, also called mutual benefit associations, are fraternal, industrial, or union groups owned by and operated for the members of the group. Unincorporated proprietary insurers are associations of individuals who join to insure a particular risk.