Question

In the context of insurance, why is it important for insurers to have a large number of insured individuals?

a.

To charge higher premiums

b.

To minimize the risk of loss

c.

To ensure that actual losses match expected losses

d.

To exclude high-risk individuals from insurance

Answer: (c).To ensure that actual losses match expected losses Explanation:Having a large number of insured individuals in insurance helps ensure that actual losses match expected losses, as indicated by the "Law of large numbers."

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Q. In the context of insurance, why is it important for insurers to have a large number of insured individuals?

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