Which of the following is implied by the pooling of losses?
A)sharing of losses by an entire group
B)inability to predict losses with any degree of accuracy
C)substitution of actual loss for average loss
D)increase of objective risk

Question

Quizplus · Accepted Answer

Pooling of losses involves spreading the risk of losses across a larger group of individuals or entities, thereby sharing the losses among the group. This means that any individual member of the group is only responsible for a portion of the total losses incurred. This sharing of losses among the group is what is implied by the pooling of losses.

Which of the Following Is Implied by the Pooling of Losses