Theory of Probability
This theory is calculate chance that one event. They occur in a number of times that the total
Insurance company will use main of the Theory of Probability with static total losses in the past as to predict that the future how will be a loss to calculate insurance premium. Be charged from the assured for enough pay compensation when disasters occur in the future as for insurance
Law of Large Number or Law of Average
The fact Principles if observed event or experiments event have more. The probability have more accuracy as well, so the insurers to get as close to the number of events that will occur. Must rely on a number of risks increased. To reduce the size of the uncertainties that this rule can be considered as the heart of the insurance.
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