Are mutual insurance companies reliable?

Mutual insurance is a group of people who have the same requirements and face the same risks. They organize themselves voluntarily, define the rules of risk compensation, and pay the risk compensation and share the funds in advance to protect the risk loss of each participant. It is a guarantee relationship between the insured who participate in mutual insurance.

Advantages of mutual insurance:

First, mutual insurance can effectively prevent moral hazard through the independent management and mutual supervision of the insured members.

Second, the cost of mutual insurance exhibition industry may be lower, and the accuracy of nuclear disaster loss judgment is higher, which can greatly reduce operating costs and provide insurance protection at a lower price.

Third, because there is no profit pressure, mutual insurance can develop insurance that is beneficial to the long-term interests of the insured without pursuing short-term commercial profits, better protect the interests of the insured, and especially help to explore insurance for low-income people and high-risk areas.

Regarding the reliability of mutual insurance, take Zhonghui Property Mutual Insurance Co., Ltd. as an example. The company has been running smoothly for five years, with more than 7 million individual members. Since its opening, the comprehensive risk rating (classified supervision) in each quarter has been Grade A. At the end of the fourth quarter of 2020, the comprehensive (core) solvency adequacy ratio reached 326.85%, and the overall operation was stable and the solvency was sufficient. For details, please take a look at Baidu.