A law about the probability of loss, which states that a larger number of exposures will come closer to the probable amount of loss.
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A natural law of probability which states that the larger the number of exposures to risk of independent, homogeneous units the closer will be the actual number of causalities to the probable number in an infinite series.
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An underlying principle of insurance the larger the number of participants in a given arrangement, the more accurate the rate is to the exposure. For example in a group of ten male drivers between ages 21 and 30, the driving history of one driver does not adequately predict future losses for the other nine drivers. In a group of 5,000 such drivers, 500 losses among those drivers makes predictions of losses among the next 5,000 drivers more accurate.
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UK: The larger the number of exposure units considered, the more closely will the losses occurring match the underlying probability of loss. Insurance uses the law to predict future losses with an acceptable degree of accuracy to facilitate the spreading of risk among homogeneous groups.
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Theory of probability that is the basis of Insurance. The greater the number of exposures, the more nearly will the actual results obtained approach the probable result expected with an infinite number of exposures. Thus, if a coin is flipped a sufficiently large number of times, the results of the trials will approach half heads and half tails – the theoretical probability if the coin is flipped an infinite number of times. Events that seem the result of chance occur with surprising regularity as the number of observations increase.
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MEDICAL,USA: Theory of probability that states the greater the number of observations of a certain event, the more likely the observed results will be the results anticipated by the mathematics of probability.