The law of large numbers states that if a large number of people are exposed to the same risk, a predictable number of losses will occur during a given period of time.

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The law of large numbers is a theorem in probability theory that states that as the number of trials (or exposures to a risk) increases, the actual results will approach the expected results, or the probability of an event happening will approach the theoretical probability. This is why insurance companies use statistics and actuarial science to predict loss ratios and set premiums based on the law of large numbers.

The Law of Large Numbers States That If a Large