What type of insurance companies are referred to as 'participating' insurers?

Participating insurers are typically associated with mutual insurance companies. These companies are owned by the policyholders rather than shareholders. Because of this structure, policyholders in mutual companies can participate in the company's profits through dividends, which are shared among them based on the premiums they have paid. This participation is a defining feature of mutual insurance companies, allowing policyholders not only to have a say in management but also to benefit financially from the company's success.

In contrast, stock insurance companies are owned by shareholders, and any profits are distributed in the form of stock dividends rather than directly to policyholders. Re-insurers, which provide insurance to other insurance companies, do not fit the criteria for participating insurers, as they primarily operate in a different sphere of the insurance industry. Reciprocal insurers are groups of individuals or organizations exchanging insurance risks and may not necessarily provide dividends to their members the way mutual insurers do. This distinction clarifies why mutual insurance companies are known as participating insurers.