What is the purpose of likelihood and impact estimates in the risk management process?

The purpose of likelihood and impact estimates in the risk management process is to assess the potential damage and frequency of threats. This assessment provides a framework for understanding how likely certain risks are to occur and the extent of their potential consequences if they do.

By estimating likelihood, organizations can gauge how probable it is for specific threats to materialize. This involves analyzing historical data, trends, and contextual factors that could influence future occurrences.

Impact estimates complement this by determining the severity of the potential consequences that could arise from these threats. This dual assessment allows organizations to prioritize their risks more effectively, focusing resources and mitigation strategies on the risks that are most likely to occur and that could cause the most significant damage.

This comprehensive understanding is crucial in ensuring that organizations allocate their risk management efforts efficiently, thereby enhancing their overall security posture and resilience against threats.