Quantitative Risk Analysis Matrix

February 18, 2017


The following post cover the basic units of quantitative risk analysis matrix.

Quantitative Risk Analysis Matrix

Basic Units:

No’ Factor Short Name Factor Full Name Calculation Value Range Common Gathering Technics
1. AV Asset Value 0$ or higher May include the values of: software, hardware, human resource, legal & regulations issues, organization downtime, reputation, customer confidence, post marketing & sales efforts, data value, service downtime, lost sales
2. EF Exposure Factor 0 – 1 (percent’s as decimals) Actuary, history incidents
3. SLE Single Loss Expectancy AV x EF n/a
4. ARO Annualized Rate of Occurrence 0 incident or higher in a year Actuary, history incidents
5. ALE Annualized Loss Expectancy SLE x ARO n/a

Sample calculation:

AV (Asset Value) = 10,000$

EF (Exposure Factor) = 0.1 (10% of the assets will be destroyed by Threat X, such as fire or theft)

SLE (Single Loss Expectancy) = 10,000$x0.1=1,000$

ARO (Annualized Rate of Occurrence) = 0.2 (I.e. – 1 incident in each 5 years)

ALE (Annualized Loss Expectancy) = 1,000$x0.2=200$

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