Mutual and reciprocal insurer

In 1922 twenty-five US Army officers decided to insure each other's cars, which insurers were reluctant to cover; their reciprocal became USAA. A mutual has no shareholders: its members are both policyholders and owners, and profit comes back to them as a rebate, a lower contribution or own funds, never as a dividend. The reciprocal, common in the United States, goes further. Subscribers insure one another and hand management to a paid attorney-in-fact, which carries no risk and may itself be listed, as Erie Indemnity is for the Erie Insurance Exchange. Against the joint-stock company, governance answers to policyholders, which sets the decision horizon on the duration of liabilities. Capital, on the other hand, cannot be raised on equity markets. Growth depends on retained earnings and subordinated debt, and in France the ESS law of 31 July 2014 created mutual certificates to open the door slightly. Lastly no takeover can punish mediocre management, which shifts onto the supervisor and internal bodies a discipline the market exerts elsewhere.