Which risk assessment approach is focused on identifying and quantifying potential losses?

The focus of the quantitative risk assessment approach is on identifying and quantifying potential losses associated with risks. This method involves the use of numerical values and statistical data to evaluate risks, allowing organizations to measure potential financial impacts more precisely. By assigning monetary values to risks, organizations can prioritize their risk management efforts based on the potential severity of losses, making informed decisions about which risks to address and how to allocate resources effectively.

Quantitative methods often utilize mathematical models, historical data, and probability assessments to quantify the likelihood of different scenarios, which can lead to actionable insights regarding the financial ramifications of risks. This focus on numerical analysis and measurable outcomes distinguishes quantitative risk assessment from qualitative approaches, which may rely on subjective judgment and descriptive assessments of risk without as clear a financial impact evaluation.