The concept of mutual insurance can be traced back in history to the eighteenth century when shipowners' dissatisfaction with the terms available from the underwriters at Lloyd's led them to form mutual insurance associations to meet their needs at lower cost. ‘Mutual'appea rs in the names of those associations, now known as ‘protecting and indemnity clubs'. Since the start, mutual insurance has steadily been developed in all countries, whether industrial or agricultural, and in all social and economic strata, whether urban or rural. Mutual insurance is organized either by large companies and international organizations or by small firms. Its policyholders can be from one or several countries or from a single region or town. There are also mutual insurance companies that cater solely for members of a single profession. Mutual insurance occupies a strong position and even dominates the market of some countries, often grouped at a national level into a specific professional organization.

Insurance is by its nature a mutual activity. It serves to compensate a group of persons, organized in accordance with statistical laws, from a hazard, so it is in no way surprising to find that people who incur the same risks create mutual insurance companies in order to be able to control the organization and functioning of their group. Members of such a company compose the social body and determine its powers. They constitute the General Meeting of the company, appointing from amongst themselves the directors. A mutual insurance company is a company that belongs to its insured members and is owned by its policyholders or their representatives - professionals or trade associations. An example of such a group at a national level is the UK's national association (Mutual Insurance Companies Association). This comprises a group of mutual insurance companies, together some nine company members and eight company associate members.

At an international level, another example is the International Association of Mutual Insurance Companies, AISAM (Association Internationale des Societes d'Assurance Mutuelle), which covers over 220 companies from 26 countries from its principal office in Amsterdam. The corporate purposes of the AISAM are defined in its by-laws:

1 to establish relations and links of confraternity between its members and to watch over the general interests of private insurance organizations based on the mutual principle of non-profit making;

2 to facilitate the exchange of information and experience between members, in matters of legal, fiscal, economic, political or other problems affecting mutual insurance in the different countries;

3 to draw its members'attention to problems of a general nature which arise in one or more countries and which seem to warrant study in the general interest of mutual insurance companies;

4 to study the origins of mutuality and investigate future possibilities of disseminating its principles;

5 to obtain recognition as a representative of insurance institutions based on the mutual principle in all international organizations;

6 to maintain regular contact with the national federations of mutual insurance companies.