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Insurance Definition: LAW OF LARGE NUMBERS

By Compuquotes Team on March 27th, 2008

LAW OF LARGE NUMBERS:

Definition:

  • The theory of probability on which the business of insurance is based. Simply put, this mathematical premise says that the larger the group of units insured, such as sport-utility vehicles, the more accurate the predictions of loss will be.

Information provided by Insurance Information Institute

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