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"Defining" Moments with Andrew: What Does "Cooperative" Mean?


Hands joined in a circle

The concept of cooperative insurance was originally brought to the United States by Benjamin Franklin in 1752 with the creation of the Philadelphia Contributorship. Prior to this if an unforeseen circumstance occurred, such as a fire, families were forced from their home and businesses had to close-up and they were out of luck. Rather than bearing the harsh burden of losing one’s home or livelihood alone, community groups began forming mutual insurance companies. The basic idea of insurance was for a group of people to pool their money together to cover the unexpected loss, which only a few members may experience that year.

The first types of insurance companies were cooperatives, also known as mutuals, and were (and still are) owned by the policyholders. What makes a cooperative special is that they take in only the money needed to operate and pay out losses. Some companies give any surplus money back to the policyholders at the end of the year in dividends, while others “give it back” by only collecting what they need in estimated premiums to cover losses and expenses of operation. Wayne Cooperative chooses the second category and aims to keep its premiums as low as possible while still covering its policyholders in their time of need. Apart from most big companies today that are searching for bigger profits, Wayne is striving to keep money in the hands of its policyholders while providing the best protection and care for those unfortunate losses. A cooperative means we are all in this together!

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