Question

Why is persistency considered an important metric in insurance?

a.

It reflects the insurer's investment strategy

b.

It indicates whether customers renew their policies or quit them midway

c.

It determines the frequency of agent commissions

d.

It reflects the insurer's profitability

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).It indicates whether customers renew their policies or quit them midway Explanation:Persistency in insurance indicates whether customers renew their policies or quit them midway, reflecting the quality of sales practices and the long-term sustainability of insurance products.

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