5×5 Risk Matrix & Value at Risk
Plot your risks by likelihood and impact, price the aggregate exposure with a Monte-Carlo Value at Risk, and see how much loss you are retaining versus transferring to the insurance market.
Risk matrix
Score = Likelihood × Impact (1–25). Each risk plots in its cell; click a marker to highlight it.
Risk register
Add the risks or assets you want to track. Dollar impact is the financial loss if the event occurs.
| Risk | L | I | Score | Ann. prob. | $ impact | Treatment |
|---|
Portfolio exposure
Recomputed live from the register. VaR uses 10,000 Monte-Carlo trials.
Retain vs transfer
Expected loss split by treatment strategy. Accept & Mitigate are retained on the balance sheet; Transfer goes to the insurer/market; Avoid removes the exposure.
Methodology
- Score = Likelihood × Impact, on a 1–5 scale each, giving a 1–25 heat value banded Low / Medium / High / Extreme.
- Likelihood → annual probability (default mapping):
L1 = 5%,L2 = 20%,L3 = 50%,L4 = 80%,L5 = 95%. - Expected annual loss = Σ (probability × dollar impact) across all risks.
- Value at Risk is the 95th / 99th percentile of aggregate annual loss from a 10,000-trial Monte-Carlo simulation. Each trial draws a Bernoulli occurrence per risk and sums the dollar impacts that fire — so it captures the chance that several risks land in the same year.
For education and general reference only — not insurance, financial, or actuarial advice. Probabilities are illustrative defaults, not fitted loss curves.