Since insurance is an application of theorem of large number, the risk to be insured must be homogeneous, similar, fortuitous, and occurring by chance.

Name: Since insurance is an application of theorem of large number, the risk to be insured must be homogeneous, similar, fortuitous, and occurring by chance.
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Insurance relies on the law of large numbers, which requires that risks be homogeneous, similar, and random to predict outcomes accurately and set premiums.

Since Insurance Is an Application of Theorem of Large Number