Final answer:
As the number of people in a risk pool increases, future losses become more predictable because the variability of losses averages out, making it easier for insurers to estimate losses and set premiums.
Step-by-step explanation:
When considering the predictability of future losses in a risk pool, the principle of large numbers applies. As the number of people in a risk pool increases, the future losses become more predictable. This is because the variability of losses tends to average out among a larger group of individuals, making it easier for insurers to estimate expected losses and set premiums accordingly. This applies to occurrence economic risks such as natural disasters, wars, or massive unemployment, over which individuals have little control. In these cases, people seek assurance that their needs will be met, and a larger risk pool helps to provide such security.
So, the correct answer to your question is: As the number of people in a risk pool increases, future losses become more A. Predictable.