Final answer:
A stock insurance company is designed to profit shareholders, earning income from premiums and investments. They offer returns to investors through dividends or capital gains. Shareholders influence company decisions via a board of directors they elect.
Step-by-step explanation:
The insurer that is organized to return a profit to the stockholders is known as a stock insurance company. These companies raise capital by selling shares of stock to investors, who become stockholders. The main goal of these insurers is to earn profits for their shareholders. They receive income through insurance premiums and from the investment income earned by investing the premiums collected. These investments are usually into safe, liquid assets to ensure funds are available when needed, especially during major disasters.
When a company issues stock, it must provide a return to its investors, which can come in the form of dividends or capital gains. The return an investor receives is the incentive they have for investing their money into the company. Decisions in a company with many shareholders are typically made by a board of directors elected by the shareholders.