According to the law of large numbers,what should happen as an insurer increases the number of units insured?
A)The amount the insurer expects to pay in claims should decrease.
B)Underwriting expenses should decrease.
C)Actual results will more closely approach expected results.
D)The insurer's profitability should become more variable.

Question

Quizplus · Accepted Answer

The law of large numbers states that as the sample size increases, the actual results will more closely approach the expected results. Therefore, as an insurer increases the number of units insured, the actual results should become more predictable and closer to the expected results. This can help the insurer better manage their risk and make more accurate predictions about their claims and profitability.

According to the Law of Large Numbers,what Should Happen as an Insurer