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Definition

Law of large numbers

Law of large numbers is the concept that seemingly random events will follow predictable patterns if enough events are observed.


Law of large numbers is a concept that the greater the number of exposures, the more closely will actual results approach the probable results expected from an infinite number of exposures.


Law of large numbers are mathematical principle involved when insurers use the probability of a specific loss occurring, the likely cost of that loss, and the number of individuals covered to calculate the premiums charge to each insured individual.

 

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