Renewal Persistency

Pak Qatar Family Takaful Ltd

What is meant by Renewal
Persistency ?
We distribute our Plans mostly on regular
contribution basis. After the first year contribution
for any plan completing 12 month period
contribution is called Renewal.
Persistency means that contribution collected during
one calendar year would also be collected in next
year . Persistency is measured for contribution and
Plans.
For example if first year contribution for one
calendar year is 10,00,000/- against 20 plans and
renewal collected next year is 980,000/- and plans in
force are 19 then Persistency ratio for contribution is
98% and plan persistency ratio is 95%
Why High Persistency ratio is
Neccessary ?

Your Promotion to next level & Stipend both
depend on high persistency ratio, miss the
standard by fraction and you will miss both.
Factors affecting Persistency
Ratio
Pre Sale Factors
Field underwriting plays a very important role to play in persistency.
Generally speaking a badly sold plan will not persist.

a badly sold plan

It can be a plan where the benefits and responsibility of the customer is
not understood by the customer. The consultant was unable to
communicate properly.
Else the consultant was more inclined to procure a plan above the usual
means of the customer. His ability to pay was much less than what the
contribution is.
So Financially when assessing a customer for Takaful Cover, one should
have equal attention to the financial worth as well as his ability to pay for
the cover.
Scientifically there are certain pre sale factor which affects persistency.

Factors affecting Persistency
Ratio
Age/ Stage of Family
Young people, who are unmarried are less likely to produce persisting business
than people who are married and are having family. Plans on Female Lives are less
likely to persist, especially of professional women than a similar plans for male
lives.
The mode, Scientific evidence from Singapore, Pakistan and some other countries
suggest that a customer will persist more in an annual plan and the persistency will
reduce with frequency of payment increasing. The monthly plans will have the
lowest persistency other factors being kept constant.
Type of Plan, Plans procured with a specific objective are more likely to persist
than general purpose plans. For example if a person saves for one of his childs
education, the plan will persist more than a plan devised to meet varying needs 10
years down the road. People tend to stick to measurable goals.

The Income, It requires simple common sense those plans will be renewed where
the customer earns from a steady source of income. The contribution should also
be such that the customer could easily pay it.

Factors affecting Persistency
Ratio
Post Sale Factors

Service, The quality of service means meeting the
expectation of a customer at each touch point.

Meeting with Consultant , at Branch Reception, at Head
office, Telephone call to HO etc are touch points for
services. It is evident that a person having good experience
is most likely to persist. This experience can be enhanced
by paying regular visit to customer, by improving our
turnaround time for issuing final receipt, by introducing
more convenient and efficient ways of paying contribution
and getting information about the plan. Web Portal services
are one such example. Issuance of FR by Branch can be one
other such step.

Factors affecting Persistency
Ratio
How to Improve Persistency,

By discouraging modal plans, the persistency can be improved a lot.
By tying the plan with a measurable goal, we can ensure that the plan will
persist.
As a field underwriter, you have a responsibility to recommend a balanced
plan where the customer is covered appropriately and he is able to pay
regular contribution.
By training the individual consultant to think empathically and propose
such a plan which will fulfill customer needs and is in his interest. Your
sincerity for the customer tend to develop a lifelong relationship, this life
long relationship helps achieve better persistency.
By keeping a complete record of all plans, we provide you a renewal listing
almost 90 days in advance. If you plan a visit of concerned Consultant for
such plan much in advance, and if not paid, follow up be made from the
managers office through telephone.

JAZAKALLAH