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PRE risk definition

KhoaDNguyen

Keen member
I recently come across term "PRE risk" a question in myTest and I cannot recall seeing coming across this term. Can anyone kindly explain to me what does it mean?
 
PRE stands for policyholder reasonable expectations. So it's the risk that these aren't met causing anything from dissatisfaction, possible persistency issues and in the extreme reputation all risk. Used to be used a lot when looking at what customers believed bonus rates on with profits might be. Used less often now when we talk more about Treating Customers fairly... Again what they deem fair against reality doesn't always match!
 
bystander is completely on point. Treating customers fairly would mean matching the product with their needs and keeping the customers well informed pre, at and post sale. Now, their expectations would build up according to the information provided to them. The main factors building up PRE would be 1) the statements given out by the provider during marketing, PRs etc. 2) the past practices of the provider ( again as bystander said the customer would be correct in assuming the same returns as the previous experience but that might not happen in reality) 3) the practices of the other providers ( what other competitors are offering in the market, the customer can reasonably expect similar returns ) .

You can think of PRE's treatment by the provider as similar to a company's treatment of dividends ( there should be consistency throughout otherwise it's the company's reputation on line)
 
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