The At-Risk® methodology uses an all hazards approach to provide clients with a comprehensive and customized evaluation of what they really have at stake with respect to the hazards with which they must contend and the risks which they must manage.

Traditionally risk is calculated using this formula:
Risk = Probability x Consequence

This formula works well in an industrial setting where probability still depends mainly on historical frequency data that is widely available. From a public sector perspective, this formulation leads to difficulties both in estimating probability and in assessing consequences. Recent events that have impacted the public sector have shown that historical data or experience-based probability is neither sufficient nor reliable enough to assess risk adequately. Worse still, there is a strong tendency to underestimate consequences, particularly in low probability – high impact events. When assessing risks, the At-Risk® approach takes into account not only the severity of the threats, but also the “ease or difficulty” of delivery associated with each threat. This latter factor recognizes that it is risk in a specified area that is of interest, not risk more generally. Diminishing the reliance on probabilities based solely on historical frequency of occurrence and adding the site-specific “ease of delivery” factor gives risk assessments that are more realistic and meaningful in today’s world.

The purpose of risk assessment is to inform decision makers about what preventative or mitigative measures to take, and what preparations to make for particular contingencies.

However, even a properly-based risk assessment does not serve to inform decision makers of what they really have “at risk” if certain contingencies arise in their jurisdiction. In order to make the “business case” for expenditures on mitigation or better preparedness, what is “at risk” must be expressed in dollars, as the prospective investments are costed in dollars (as are competing investments).

An estimate of the amount which an organization has “at risk” in the event of various contingencies is the starting point for a rational decision as to how much “insurance” to buy, in the form of prevention, mitigation and preparedness.

Consequences are assessed from the point of view of the specific community or region, and take into account not only direct impacts but also indirect impacts, as these can often be the most important of the two for governments because they have a broader range of interests at stake.

The At-Risk® approach also makes allowance for considering derivative impacts, although these are less likely to be of significance to local and regional governments.

Direct impacts consist primarily of those costs which are currently taken into account under the “consequence” heading such as costs of response and recovery, temporary loss of taxes and other income, compensation to individuals, organizations and groups affected, etc. In general, these are the immediate results of the disaster, usually localized in scope, physical in nature and relatively easy to quantify.

Indirect impacts comprise outcomes attributable to the disaster but which come about through secondary means. Typically they are regional in scope, economic in nature and prolonged in duration.

For example, a disaster which results in significant environmental consequences can make a community much less attractive to potential residents looking for some place to raise a family. For a region popular with tourists it can mean reduced tourism income for many years after the disaster, notwithstanding higher promotional costs.

The At-Risk® methodology is much more inclusive and realistic than conventional risk assessment approaches, and takes into consideration the new nature and severity of threats which responsible governments must deal with today.

By bringing into the assessment the full range of potential consequences and their impact on the community or region and producing results which can be quantified in dollar terms, the At-Risk® approach provides outputs which are directly applicable to emergency management programs and meaningful and relevant to community decision makers.

Contact The Zeta Group for a comprehensive analysis of your situation.