when a mutual insurance company switches from being member owned to being traded on the stock market it is called demutualization and the mutual insurance company becomes a stock insurance company this shift may result in policyholders gaining shares in the newly floated company most often this is done as a form of raising capital stock insurance companies can raise capital by distributing shares whereas mutual insurance companies can only raise capital by borrowing money or increasing rates 
history of mutual insurance companiesmutual insurance as a concept began in england in the late 17th century to cover losses due to fire it began in the united states in 1752 when benjamin franklin established the philadelphia contributionship for the insurance of houses from loss by fire 1 mutual insurance companies now exist nearly everywhere around the world in the past 20 years the insurance industry has gone through major changes particularly after 1990s era legislation removed some of the barriers between insurance companies and banks as such the rate of demutualization increased as many mutual companies wanted to diversify their operations beyond insurance and to access more capital some companies converted completely to stock ownership while others formed mutual holding companies that are owned by the policyholders of a converted mutual insurance firm 