---
title: Factors Impacting Retention
description: "There are many factors that impact persistency: selling practices, policyholder's age, and service level are just a few. Check out our blog on the 12 factors that impact persistency."
image: https://blog.godonna.ai/hubfs/Blog%20Images/New%20Customer.jpg
---

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# [Factors Impacting Retention](https://blog.godonna.ai/blog/factors-impacting-persistency)

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# Factors Impacting Retention

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'[Retention](https://en.wikipedia.org/wiki/Customer_retention)' refers to the ability of a company to retain its customers over some specified period. High customer retention means customers of the product or business tend to return to, continue to buy or in some other way not defect to another product or business

‘[Persistency](http://www.policywala.com/irda-modifies-persistency-norms-for-life-insurance-agents/)’, during a period may be defined as the proportion of policies remaining in force at the end of the period out of the total policies in force at the beginning of the period. In other words, persistency is the percentage of business retained without lapsing or being surrendered. Low lapsation means high persistency and vice versa.

Persistency ratio measures the number of policies that continue in the books of the insurer by the end of the first year (13th month persistency), second year (25th month persistency), third year (37th month persistency), fourth year (49th month persistency) and fifth year (61st month persistency).

Below, we unearth some of the factors that impact [persistency](https://blog.godonna.ai/retention).

![Factors-impacting-Persistency](https://blog.godonna.ai/hs-fs/hubfs/Factors-impacting-Persistency.png?width=1000&name=Factors-impacting-Persistency.png)

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<https://blog.godonna.ai/blog/why-does-the-long-term-nature-of-life-insurance-products-make-customer-retention-difficult>

## [Why Does the Long-term Nature of Life Insurance Products Make Customer Retention Difficult?](https://blog.godonna.ai/blog/why-does-the-long-term-nature-of-life-insurance-products-make-customer-retention-difficult)

Most insurers offer similar products and services, which makes it challenging to attract new customers and retain them. As an industry, insurance is low-touch, and insurers seldom interact with their customers. A report shows that the top companies have an average customer retention rate of 93 - 95 percent, while insurance companies have an average of 84 percent.

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