Alexis N. Muench explores two main ideas. First, financially weaker mutual insurers are more likely to become mutual holding companies (MHCs); second, converting improves their performance afterward. Results show that mutuals with lower surplus, slower premium growth, and higher costs convert more frequently. After converting, insurers become more efficient and increase underwriting income, though surplus, premium growth, and combined ratios remain unchanged. Dividends paid to the parent holding company rise after four years, suggesting some capital may shift away from policyholders. Overall, the MHC structure offers mutual insurers financial flexibility, but long-term effects on policyholder ownership are uncertain.
Evolution of Mutual Insurance Companies: Balancing Tradition with Modern Changes
