Persistency

Definition

Persistency is the proportion of policies still in force after a given period, most often measured at 13 and 25 months from inception for long-term business with recurring premiums (life, funeral, credit life, income protection) and year on year for renewable short-term policies. It can be calculated by policy count or by premium. Insurers track it per intermediary because a book that lapses in the first months never recovers its acquisition cost or the upfront commission paid. In South Africa, Namibia, Botswana, Kenya and Nigeria, persistency therefore drives commission terms, clawback exposure and sometimes whether a broker code stays open with an insurer.

What you need to know

Persistency is a relationship metric more than a pricing one, and almost every lever sits with the brokerage. The first month matters most: a welcome message, the policy documents, confirmation of the first debit-order date and a check-in at thirty days cut early cancellations. After that, a reminder before each premium, a fast reaction to unpaid debit orders and contact at each life event (house move, new child, new car) keep the policy relevant. Listening for weak signals in conversations (complaints about price, mention of a competitor, unusual silence) lets the handler act before the client decides.

Measuring persistency by representative is also a supervision tool: a representative whose business lapses early may be selling on price or to clients who cannot afford the premium, which raises suitability questions under FAIS and the Treating Customers Fairly outcomes.

A WhatsApp CRM makes these levers measurable. ORIS derives a risk score and an engagement score from each client's exchanges, lists at-risk clients in Opportunities & Risks and lets the firm target retention campaigns at segments that are drifting. The retention hub and the policy lapse entry go further; the lapse-risk guide gives a month-by-month sequence for South African brokers.

Concrete example

A Polokwane brokerage finds that a third of its funeral policies lapse before month thirteen. It introduces a WhatsApp sequence: welcome and documents on day one, first debit-order reminder on day 25, satisfaction check at day 90, and a reminder before every monthly premium. A year later its 13-month persistency has risen enough for the insurer to restore full upfront commission on new business.