Persistency
ratio - ICICI Pru. Life and HDFC Life Insurance..!
The historical persistency ratio of the India's two leading life insurance companies ICICI
Prudential Life Insuranc and HDFC Life Insurance.
Persistency levels measure the percentage of customers who continue with
their policies after a given period of time.
In simple words, the persistency ratio tells you how many policies sold in
the past are still alive and funded by the policyholders today.
Simply put, persistency ratio = No. of Clients Paying the Premium / Net
Active Clients * 100.
Persistency of Life Insurance Policies, 2014-15.
This number is an important metric in insurance parlance, as life insurance
is a long-term contract. In the initial years, the premium collected goes
towards meeting costs. It is the subsequent premiums that start contributing to
the margins.
Given its importance, insurance companies constantly look for ways to
increase this ratio. A high persistency rate is indicative of satisfied
customer and effective sales practice.
Now, it's quite well known, India is the 10th largest life insurance market
globally and has a large unpenetrated insurance market. Thus, it is believed to
be one of the leading growth sectors in India.
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