After discussing the main tenets of stakeholder and agency theory, the paper provides anudexploratory empirical study of the relative performance of mutual and proprietary lifeudinsurance companies in the UK during the period 1995-96. The mutual companiesudincluded in the sample performed well relative to the proprietary companies in terms ofudtheir overall financial strength, annual surpluses and investment earnings. While theudmutuals had slightly higher expense ratios than the proprietary companies, they wereudrelatively more cost efficient and operated with potential economies of scale. There isudalso evidence that fund managers in mutuals perform at least as well on average as thoseudin proprietary companies.
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