According to the law of large numbers, how do events that happen by chance behave?

The law of large numbers states that as the number of trials or observations increases, the average of the results will tend to get closer to the expected value or mean. This principle suggests that while individual events may appear random and unpredictable when considered in isolation, over a large number of occurrences, they will exhibit a consistent and predictable pattern.

Therefore, when considering a large enough sample size, the outcomes will converge toward a statistical average. This convergence provides the foundation for many insurance calculations and risk assessments, allowing insurers to estimate losses and determine premiums based on predictive analytics.

The notion that random events ultimately reveal a predictable pattern emphasizes the importance of large datasets in insurance and statistical analysis, where understanding trends and probabilities is crucial for effective risk management.