When working out the actual withdrawal experience for a year, would we only look at number of pols in-force (IF) at start of year and then look at how many of those pols are still IF at the end of the year - then divide the latter by the former to get a persistency rate? For example: if there are 10 pols IF at start of the year and all of those 10 are still IF at the end of the year, will the persistency rate be 100% and so withdrawal rate be 0%? What about if there were 5 new pols during the year and and all of those 5 withdrew before the end of the year? I read the non-core reading but did not fully understand it. Could you please help me out here with a numerical example? Cheers May be I could check how it is actually done in the experience analysis team in office!!
Firstly it depends on how accurate a measure you want. What you can do is look at the number of days that your policies are exposed to in the relevant period. So if business came on say 01.04. you potentially have 9 months exposure of going off. Those in force at start and end have 365 days of exposure. The other little twist is deaths. They aren't in any closing in force figure so you need to be careful if you were going to use an average in force figure.
