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Proprietary 

Modelling

Within the confines of business interactions it is hard to think of a concept that is more ubiqutous than risk - after all, being in business is synonymous with a seemingly endless threats and uncertainties. Not surprisingly, the notion of risk in business is so broad and so amorphous that that it almost eludes meaningful conceptualization and operationalization. Almost, but not quite.

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We live in the age of data and rapidly expanding data utilization capabilities. And although not everything that is worth knowing is knowable, i.e., encoded as data, great many of the common and uncommon threats and uncertainties confronting business organizations can be empirically estimated, many using already-in-hand data. The mere availability of the requisite data, however, does not assure availability of accurate decision-aiding knowledge, as attested to by many organizations decrying being data-rich, but information-poor. With that in mind, we assist organizations in translating already-in-hand and otherwise available data into risk-reducing knowledge.

The task of transforming the informational potential of data into decision-guiding knowledge begins with the creation of a meaningful analytical framework, one which recognizes the inherent differences among the three key aspects of risk: type, probability and impact.

Type

At the most aggregate level, risk exposures can be grouped into upside and downside threats, where the former is a reflection of strategic uncertainties, while the latter encompasses a wide spectrum of adverse developments. Although the traditional conception of risk is focused primarily on downside risks, or avoidance of adverse developments, it is the upside, or strategic risk that poses the greatest threat to long-term viability of business organizations.

Probability

Potential threats faced by just about any business organization are effectively too numerous to be managed on ongoing basis - fortunately, only a fairly small subset of those risk exposures have the potential to materially impact the well-being, i.e., the asset base, of a business organization.

 

The likelihood of occurrence and the expected severity, or cost impact, are the two key evaluative dimensions that form the basis of risk exposure screening.

Impact

Of those risk types that indeed pose a noteworthy level of threat, some can be triggered by organization-specific developments, such as product recall or securities litigation, while others can be sparked by non-company-specific forces, such as regulatory sanctions or acts of terrorism.

 

From the standpoint of protecting the organization's asset base, the ultimate consequence of various organizational threats can be either a one-time charge, best exemplified by a fine or a claim settlement, or a prolonged loss of value, which is typically a product of ineffective strategic decision-making.

Estimating the Threat of Adverse Events

Exposure Specific Offerings

Explore our standardized, already-in-place solutions to common executive, cyber, and casualty risks by following links at the top of this page. In addition, you can also review examples of recent ad hoc analytic research initiatives by following the Custom Research link.