What type of insurers are funded by premiums?

Private insurers are types of insurance companies that operate for profit and are funded primarily by the premiums paid by policyholders. These premiums are collected in exchange for providing various types of coverage, and they allow private insurers to pool risks and manage claims. The financial model relies on the collection of these premiums, which not only cover expected losses but also support administrative costs and corporate profits.

On the other hand, government insurers often rely on taxation rather than premiums as their funding source. Mutual companies, while funded by premiums, operate differently in that they are owned by the policyholders rather than shareholders, and profits are often redistributed back to members. Similarly, fraternal benefit societies are typically nonprofit organizations that provide insurance-like benefits to their members and may use membership fees rather than traditional premiums to fund their operations. Thus, the characteristic of being funded specifically by premiums aligns squarely with the framework of private insurers.