Risk Analysis

Risk analysis is a crisis management tool that improves understanding of potential ramifications of risks that can lead to crisis situations and decision making about successfully reducing these risks. Relevant data and information for a specified analysis objective and scope are identified and systematized through synchronic analysis of the combined potential dynamic effects of underlying hazards, exposure, and vulnerability. Issues for consideration include the appropriate level of quantitative and qualitative data, of participation and aggregation, and of realized and anticipated loss of data.

Though it is sometimes considered a subcomponent of risk assessment and sometimes a separate component in the risk management process, the resulting systematized outputs enable risk evaluation to determine which risks are to be minimized through treatment measures and which residual risks will remain for risk transfer or crisis preparedness and response.

Risk analysis can also be conducted in areas currently in a crisis situation to help determine how to address risks faced in the crisis and from actions taken to resolve it. Although such corrective risk analyses can be especially relevant in conditions of protracted crisis from extensive risks, the following introduction focuses on prospective risk analyses for proactively understanding realized and unrealized consequences of changing intensive and extensive risks. Although it is based on approaches for disaster risk reduction for a geographical entity, the approach is applicable to analyses related to crises arising from vulnerability to all types of hazards for any type of organization.