Definition

A group of individuals or businesses that share similar risks. Pooling risks together helps lower costs and improve coverage for everyone involved.

What to consider

  • Understand how dividends are calculated.
  • Review the impact on your overall premium.
  • Consider the timing and frequency of dividend payments.

Real world scenarios

  • An insurer returned a portion of profits as a policyholder dividend to its customers.
  • A mutual insurance company issued a dividend check to policyholders at the end of the year.
  • After a profitable year, an insurer credited policyholder dividends to reduce premium costs.

Related terms

Insurance & Financial Protection