Private Health Insurance: Mutual vs. Stock Companies
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Private Health Insurance: Mutual vs. Stock Companies


There are two kinds of private health insurance companies operating in Germany: mutual and stock companies. So what does this mean for customers and brokers?

There are many factors to consider when making the switch from public to private health insurance in Germany. But if you’ve already weighed the pros and cons and decided to make the leap to private, then you’re in for a whole new set of questions. With so many providers and plans available, how can you know what’s best for you?

Most customers are guided by “the basics”—monthly premium costs, deductibles, and coverage reach. But if you’re on the fence, there may be a factor you’re not considering: whether the provider is a stock company (Aktiengesellschaft, AG) or a mutual insurance company (Versicherungsverein auf Gegenseitigkeit, VVaG). 

What’s the difference?

All 42 companies in Germany’s private health insurance network provide comprehensive coverage to their members. But there are some important differences between stock companies and mutual insurance companies.

Stock companies are owned solely by their shareholders, which means that any dividends are distributed to shareholders. Policyholders do not directly have a share of the company’s profits. 

Mutual insurance companies, meanwhile, are owned entirely by their members. This means that dividends are redistributed among the members—so if your company saves money over the year, you may get some cash back or be reimbursed with credits to your account. The purpose of these companies is to serve the interest of the policyholders. 

Which is better?

Feather works with both stock companies and mutual insurance companies, and each type has its own advantages. Mutual insurance companies are often considered to be the more customer-friendly option as they are perceived to operate purely in the interest of policyholders. 

But stock companies also have certain benefits. These companies are generally larger and have the power of investors behind them. With more financing, they are able to take on risks and absorb shocks than their mutual insurer counterparts. This can result in lower monthly premiums for customers. 

What does this mean for brokers?  

Ultimately, whether a customer chooses a mutual insurance company or a stock insurance company does not make much difference for brokers, since they get a commission either way. But it can be an important distinction to make for customers and one that perhaps more brokers should emphasize when advising on policy choice. 

After all, people are meant to stick with their private insurers for life—so it’s important to give customers as much information before they make this important decision. A simple, straightforward explanation of both types of companies can help to ensure that customers understand their options and choose a private insurer that fits their values and needs.

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