Meaning
The Persistency Ratio is a key metric primarily utilized in the insurance industry to gauge policy retention and customer loyalty over time.Definition
This ratio measures the percentage of insurance policies that remain active and have not lapsed, surrendered, or been terminated after a specific duration, typically one year or more.How It’s Calculated
It is calculated by dividing the number of active policies by the total number of policies issued within a defined period.Significance
A higher persistency ratio indicates strong customer satisfaction, effective policy services, and a stable, profitable business model for an insurance provider.Author
