Indian life insurers’ customer loyalty metrics for FY25 reveal striking variations in long-term policyholder retention. This article analyses persistency ratios across key players to identify who fared best by policy count and premium amount at important stages, notably the 13th and 61st months, as per the Cafe Mutual report.
Persistency ratio is a significant metric used in life insurance, representing the proportion of policies or premiums renewed after specified intervals such as the 13th, 25th, 37th, 49th and 61st months. Higher ratios suggest better customer satisfaction and policyholder retention, two pillars that bolster the long-term financial health of life insurers.
During FY25, Tata AIA secured the highest 13th-month premium persistency ratio at 88.05%, showcasing remarkable retention soon after policy initiation. This was followed closely by HDFC Life with 86.9% and Aditya Birla Sun Life with 85.76%.
These top-performing insurers reflect strong back-end services, prompt renewals and customer satisfaction post policy sales.
Persistency at the 61st month becomes even more critical as it highlights long-term loyalty. Tata AIA retained its leadership with 67.38%, followed by ICICI Prudential Life at 63.9% and HDFC Life at 63.5%. Notably, LIC also figured in the top 5 with 63.12%.
These figures show that retaining long-term clients is challenging, and success in this area underlines operational efficiency and consistent value delivery.
The changing rate of renewals over time highlights how insurers maintain trust. Here’s a sample of the full progression:
Judging by the number of policies renewed, Axis Max Life Insurance posted the highest 13th-month policy persistency at 83%, followed closely by Tata AIA at 82.97%. Others in the top 5 were HDFC Life (81.2%), ICICI Pru Life (80%) and Kotak Life (79.08%).
These insurers’ ability to encourage policy continuation speaks to robust customer onboarding and follow-up practices.
At the 61st month, ICICI Prudential Life reported a strong 71.6% policy persistency rate—the highest in the industry. Other notable performers included Bandhan Life (58%) and Tata AIA (54.04%).
Interestingly, while Bandhan Life ranked low on premium persistency, it had a high rate of policy renewals, which may suggest more modest premium sizes with solid client renewals.
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A comparison across stages shows that all insurers saw a drop in persistency ratios over time. While strong performers like Tata AIA and ICICI Pru managed a gradual decline, laggards like Shriram Life and Future Generali saw sharper drops, implying issues in sustained service delivery, possibly linked to customer grievances or operational shortcomings.
In FY25, Tata AIA emerged as the life insurer with the most loyal customer base by premium metrics, leading both the short and long-term renewal rankings. Meanwhile, ICICI Prudential Life excelled in long-term policy persistency, underlining customer trust and product stickiness. Across the sector, while newer private players demonstrated strong annual retainers, long-term retention continues to be a challenge for several insurers.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jun 17, 2025, 11:51 AM IST
Team Angel One
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