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Quantitative Risk

Risk analysis expressed in numbers, frequencies, probability distributions, and dollar amounts, that enables comparison, aggregation, and clear financial reasoning. FAIR is the leading quantitative approach in cybersecurity.

Quantitative risk analysis expresses risk numerically, often as a probable annual loss distribution combining loss event frequency and loss magnitude. It supports apples-to-apples comparison, aggregation across the portfolio, and decisions in financial terms leadership understands. In cybersecurity, FAIR is the leading quantitative method. Quantitative risk is more rigorous than qualitative but requires more effort, and works best when paired with calibrated estimation and acknowledgement of uncertainty.

Introduced in: GRC Analyst Fundamentals

Examples

  • Expressing a risk as a probable annual loss distribution.
  • Comparing risks across categories using common monetary terms.
  • Aggregating quantitative risks into a portfolio view.

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