In which type of insurance model does the policyholder have a vested interest in company profits?

In a mutual insurance model, the policyholders are also the owners of the company. This unique structure allows policyholders to have a vested interest in the company's profits because any profits generated by the mutual insurer are typically distributed back to them in the form of dividends or reduced premiums. This model emphasizes the idea that the policyholders collectively benefit from the financial success of the company, aligning their interests with the performance of the insurer.

In contrast, a stock insurance model is owned by shareholders who may not be policyholders, meaning profits are primarily distributed to stockholders rather than to the individuals holding policies. The fraternal model, while it does involve a community aspect among members, does not generally provide the same level of profit-sharing as mutual insurance. Lastly, a non-profit model serves a specific purpose and does not distribute profits in the same way as a mutual structure. Thus, it is the mutual model that distinctly allows policyholders to share in the profits, setting it apart in how it aligns their interests with those of the company.