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Risk Matrix

A risk matrix is used in risk assessment to determine the severity of risks from potential events. It analyzes both the probability and consequences of hazards to calculate overall risk. Probability is ranked on a scale from certain to rare, while consequences range from negligible injuries to multiple deaths. The matrix crosses these factors to provide qualitative risk levels from low to extreme. However, risk matrices have limitations as they oversimplify risks and can misrank some hazards compared to quantitative analysis. They should be used carefully alongside explanations of subjective judgments.

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Sagar Kulkarni
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79 views

Risk Matrix

A risk matrix is used in risk assessment to determine the severity of risks from potential events. It analyzes both the probability and consequences of hazards to calculate overall risk. Probability is ranked on a scale from certain to rare, while consequences range from negligible injuries to multiple deaths. The matrix crosses these factors to provide qualitative risk levels from low to extreme. However, risk matrices have limitations as they oversimplify risks and can misrank some hazards compared to quantitative analysis. They should be used carefully alongside explanations of subjective judgments.

Uploaded by

Sagar Kulkarni
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Risk Matrix

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challenged and removed. (May 2009)

A Risk Matrix is used in the Risk Assessment process; it allows the severity of the risk of an
event occurring to be determined.

A risk is the total of each of the hazards that contribute to it. The risk of any particular hazard, H,
can be defined as its probability, p, multiplied by its consequence, c. In layman's terms: how
likely it is to happen and how bad it would be if it happened.

Hazard = PH * CH

Therefore the total risk, R, of an event, e, is the sum of the n potential hazards that would result
in that event:

The Consequences can be defined as:

 Catastrophic - Multiple Deaths


 Critical - One Death or Multiple Severe Injuries
 Marginal - One Severe Injury or Multiple Minor Injuries
 Negligible - One Minor Injury

The Probability is identified as 'Certain', 'Likely', 'Possible', 'Unlikely' and 'Rare'. However it
must be considered that very low probabilities may not be very reliable.

An example Risk Matrix would be as follows:

Negligible Marginal Critical Catastrophic


Certain High High Extreme Extreme
Likely Moderate High High Extreme
Possible Low Moderate High Extreme
Unlikely Low Low Moderate Extreme
Rare Low Low Moderate High
The company or organisation then would calculate what levels of Risk they can take with
different events. This would be done by weighing up the risk of an event occurring against the
cost to implement safety and the benefit gained from it.

[edit] An Example
The risk of being crushed may be made up of the hazard of being crushed by a car hitting you,
the hazard of having a piano dropped on you and the hazard of being in the path of a stampede.
Each hazard has probability and a consequence. In this example the probability of being hit by a
car is much greater than that of being hit by a piano or a stampede. However the consequence of
being hit by a car is less than that of finding yourself under a piano.

These are shown in the table below with a few others:

Negligible Marginal Critical Catastrophic


Certain Busy Street
Likely Car
Possible Piano
Unlikely Stampede
Rare Locust Swarm Burst Dam

[edit] Problems with Risk Matrix


In his article 'What's Wrong with Risk Matrices?' [1], Tony Cox argues that risk matrices
experience several problematic mathematical features making it harder to assess risks. These are:

 Poor Resolution. Typical risk matrices can correctly and unambiguously compare only a
small fraction (e.g., less than 10%) of randomly selected pairs of hazards. They can
assign identical ratings to quantitatively very different risks (“range compression”).

 Errors. Risk matrices can mistakenly assign higher qualitative ratings to quantitatively
smaller risks. For risks with negatively correlated frequencies and severities, they can be
“worse than useless,” leading to worse-than-random decisions.

 Suboptimal Resource Allocation. Effective allocation of resources to risk-reducing


countermeasures cannot be based on the categories provided by risk matrices.

 Ambiguous Inputs and Outputs. Categorizations of severity cannot be made


objectively for uncertain consequences. Inputs to risk matrices (e.g., frequency and
severity categorizations) and resulting outputs (i.e., risk ratings) require subjective
interpretation, and different users may obtain opposite ratings of the same quantitative
risks. These limitations suggest that risk matrices should be used with caution, and only
with careful explanations of embedded judgments.

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