What Does Dispersion Mean?

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What does Dispersion mean? Read on to discover the definition & meaning of the term Dispersion - to help you better understand the language used in insurance policies.

Dispersion

Dispersion

A statistical term denoting the variability of a distribution around the mean or other central tendencies. Actuaries and risk managers often develop and analyze this to determine the variability of risk. The less dispersion of the distribution, the greater the likelihood that actual results or losses will fall within a specified range of that central tendency and the result is a lower variability of risk. Wide dispersion of results means less certainty in predicting a particular outcome. Statistics that are measures of this variability include the range, variance, and standard deviation.

We hope the you have a better understanding of the meaning of Dispersion.

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