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Persistency Ratio

by MoneyPuzzle Admin   ·  April 17, 2019  

Persistency Ratio

by MoneyPuzzle Admin   ·  April 17, 2019  

This shows the extent to which policy holders stay with their insurer and the insurance policy. It can be measured by looking at policy renewals each year. It thus, measures the amount of business in terms of number of policies and the premium an insurance company is able to retain in a given year. It is measured by looking at how many policies remain in force or are renewed at the end of a year as compared to the number of policies started at the beginning of the year. This is a relevant metric for life insurance policies which have surrender charges involved and where there is an investment component for which it becomes important to remain with the policy for longer periods rather than switching providers.