There are three ways of answering this question.
This is describing an individual risk model - as there is a maximum of one event per risk. So you could just use the standard individual risk model formulae:
E(S) = sum (mq)
var(S) = sum (qs² + q(1-q)m²)
where q= probability of a claim (or in this case an event)
m = mean of each claim, s² = variance of each claim
Secondly, since each event for the risks is identical we could use the collective risk model formulae given on page 16 of the Tables with N~Bin(120,0.02).
Thirdly, we could torture ourselves with the horrendous conditional formulae.
It doesn't fit here it's simply used because it starts at 1.
Last edited: Sep 29, 2010