Persistency Ratio Calculator

Number of Policies Renewed

Number of Policies Issued (in prior period)

In the insurance industry, one of the most important indicators of customer loyalty and long-term profitability is the Persistency Ratio. It shows how many policyholders continue paying their premiums after a certain number of months, typically the 13th, 25th, 37th, and 61st month.

A Persistency Ratio Calculator simplifies this process by allowing insurance companies and agents to quickly compute the ratio. This ensures they can track policy renewals, improve customer retention, and identify areas for service improvement.

If you’re an insurance advisor, manager, or even a policyholder wanting to understand how persistency affects your insurer’s performance, this calculator is a valuable tool.

What Is Persistency Ratio?

Persistency Ratio is the percentage of insurance policies that remain active (i.e., premiums are paid) after a specific period of time.

For example, if an insurer issued 1,000 policies and 800 are still active at the 13th month, the persistency ratio is 80%.

It is one of the most critical measures of:

Customer trust and loyalty
Agent performance
Insurer’s financial health

Formula for Persistency Ratio

The formula is:Persistency Ratio=Number of Active Policies at Period EndNumber of Policies Issued at Start×100\text{Persistency Ratio} = \frac{\text{Number of Active Policies at Period End}}{\text{Number of Policies Issued at Start}} \times 100Persistency Ratio=Number of Policies Issued at StartNumber of Active Policies at Period End×100

For instance:

Policies Issued: 1,000
Policies Active at 13th Month: 850

Persistency Ratio=8501000×100=85%\text{Persistency Ratio} = \frac{850}{1000} \times 100 = 85\%Persistency Ratio=1000850×100=85%

Step-by-Step Instructions

Step 1: Enter Initial Policies

Provide the total number of policies issued in the beginning period.

Step 2: Enter Active Policies

Enter the number of policies still active at the review point (e.g., 13th or 25th month).

Step 3: Click Calculate

The calculator will instantly show the Persistency Ratio in percentage.

Step 4: Interpret Results

Higher ratio (80–90%+) → Strong customer loyalty.
Lower ratio (<70%) → Need for better customer engagement and product design.

Practical Examples

Example 1 – 13th Month Persistency

Issued Policies: 2,000
Active at 13th month: 1,600

Persistency Ratio=16002000×100=80%\text{Persistency Ratio} = \frac{1600}{2000} \times 100 = 80\%Persistency Ratio=20001600×100=80%

✅ This means 80% of customers paid premiums for at least one year.

Example 2 – 25th Month Persistency

Issued Policies: 1,000
Active at 25th month: 700

Persistency Ratio=7001000×100=70%\text{Persistency Ratio} = \frac{700}{1000} \times 100 = 70\%Persistency Ratio=1000700×100=70%

✅ This shows that 30% of customers dropped off within two years.

Example 3 – Long-Term Persistency

Issued Policies: 500
Active at 61st month: 300

Persistency Ratio=300500×100=60%\text{Persistency Ratio} = \frac{300}{500} \times 100 = 60\%Persistency Ratio=500300×100=60%

✅ After five years, 60% of policies remain active, which is healthy but may need improvement.

Benefits of Using the Persistency Ratio Calculator

Instant calculations – no manual errors.
Helps measure customer loyalty.
Improves agent performance tracking.
Assists insurers in premium forecasting.
Supports regulatory reporting in markets where persistency benchmarks exist.

Features of the Calculator

Easy input fields for policies issued and active policies.
Works for 13th, 25th, 37th, and 61st month persistency.
Generates results in percentage form.
Mobile-friendly and accessible online.

Common Use Cases

Insurance Companies – Monitor persistency ratios for product portfolios.
Agents & Advisors – Track client engagement and renewals.
Regulators – Ensure insurers maintain fair customer retention levels.
Policyholders – Assess the reliability of insurers before buying policies.

Tips for Improving Persistency

Educate customers about long-term benefits of their policies.
Offer easy premium payment options (auto-debit, online payments).
Provide reminders and follow-ups for premium due dates.
Maintain strong after-sales service and customer support.
Design flexible products to meet evolving customer needs.

Frequently Asked Questions (FAQ)

1. What is Persistency Ratio?

It’s the percentage of policies still active after a given period, such as 13 or 25 months.

2. Why is it important?

It measures customer loyalty, agent effectiveness, and insurer stability.

3. How is it calculated?

Persistency Ratio = Active Policies ÷ Issued Policies × 100.

4. What is a good persistency ratio?

Typically, 80%+ at 13 months and 65%+ at 61 months is considered strong.

5. What is 13th month persistency?

It measures how many policyholders continue paying premiums after one year.

6. What is 25th month persistency?

It shows the percentage of policies active after two years.

7. Who uses the calculator?

Insurers, actuaries, advisors, and regulators.

8. Can policyholders check persistency?

Yes, they can use the calculator if they know issued and active policy numbers.

9. Is high persistency always good?

Yes—it indicates trust and stable revenues.

10. What if persistency is low?

It suggests poor customer engagement, product mismatch, or high surrender rates.

11. Does persistency affect profitability?

Yes, higher persistency improves profitability by ensuring consistent premium flow.

12. How does it impact agents?

High persistency often means higher commissions and rewards.

13. Is persistency regulated?

Yes, in some markets regulators set benchmarks for minimum persistency levels.

14. Can insurers improve persistency?

Yes, through customer education, service quality, and digital payment tools.

15. Is persistency ratio different for life and health insurance?

Yes—life insurance usually tracks 13th, 25th, 37th, and 61st month ratios, while health may use annual renewal ratios.

16. Does persistency depend on product type?

Yes—term plans, ULIPs, and endowment policies often have different persistency patterns.

17. What role does technology play?

Digital payment reminders and mobile apps significantly boost persistency.

18. How does persistency affect solvency?

Higher persistency strengthens cash flows, improving solvency.

19. Is the calculator free?

Yes, it’s completely free to use online.

20. Can it be used for group policies?

Yes, as long as issued and active numbers are provided.

Conclusion

The Persistency Ratio Calculator is an invaluable tool for measuring insurance policy retention and customer loyalty. By tracking how many policyholders continue paying premiums over time, insurers and agents can assess financial health, customer satisfaction, and long-term sustainability.