Persistency

What Does Persistency Mean?

Persistency is a metric expressed as a percentage that indicates the number of clients an insurance company has retained for a specific insurance product over a given period. A high persistency rate signifies that the product is performing well and retaining customer loyalty.

Insuranceopedia Explains Persistency

Many people purchase insurance, but not all continue paying the premiums or maintain their policies over time. Those who consistently pay premiums are essential for keeping an insurance company financially stable. High-persistency insurance products are particularly important as they generate the steady revenue needed to fund underwriting activities and cover the company’s operational costs. Persistency rates are usually higher for products that match the buyer’s budget and long-term goals, which is why people who take time to choose the right life insurance policy upfront are more likely to keep it. Policy type plays into this too, since term and permanent life insurance have very different lapse patterns.