What type of insurance company is owned by stockholders who invest in the company?

The correct answer is stock companies. Stock companies are insurance organizations that are owned by stockholders who invest in the company. These stockholders typically receive dividends based on the company’s profitability and have the ability to sell their shares. The primary goal of stock companies is to generate profits for their shareholders, which influences how they conduct their business and develop insurance products.

In contrast, mutual companies are owned by policyholders rather than stockholders, meaning that profits are typically returned to policyholders in the form of dividends or lower premiums rather than being distributed to stockholders. Nonprofit organizations do not operate with the main goal of making a profit for investors, and they often provide services to meet specific needs without shareholders to satisfy. Underwriting pools are collaborative agreements between insurers to share risks among a group of companies, but they are not companies in the traditional sense and do not have stockholders. This distinction clarifies why stock companies are the right answer in this context.