Benefits of Mutual Insurance
The Providence Mutual Fire Insurance Company is, in the strict sense of the word, a mutual insurance company, a corporate organization in which there are no stockholders. In fact, Benjamin Franklin, a founding father of America’s second oldest insurance company, the Philadelphia Contributionship established in 1752, described the basic incorporating principle of a mutual as an organization "whereby every man might help another without any disservice to himself." Policyholders are participating members of the company who reciprocally engage, by payment of premiums into a common fund, to indemnify one another against loss. Profits, losses, and expenses are shared by policyholders. Mutual insurance companies pay dividends, nontaxable return of premium by the company to the policyholders based on lower-than-expected claim and administrative expenses, and/or higher than anticipated investment yields.
Today, more than two hundred years after the signing
of the Charter by The Providence’s founding fathers, the spirit of 1800 endures.
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